https://www.augustadvisory.com.my/

August Advisory Sdn. Bhd., No. 12-1, Jalan Astaka 1C/KU2, Bandar Bukit Raja, Klang (2026)

19/08/2026

A new exemption has been added to Malaysia's service tax rules for private healthcare services, and it directly affects how private hospitals and clinics handle billing for newborn patients. Under Service Tax Policy No. 5/2025 (Amendment No. 4), private healthcare facilities are no longer required to impose service tax on newborns who have not yet obtained citizenship status.

Before this exemption can be applied, two conditions must be met. One of the newborn's parents must be a Malaysian citizen, with valid identification documents issued by the National Registration Department. This documentation proof must then be submitted to the private healthcare facility during the newborn's registration process.

This places the responsibility on the facility's front desk and admin team to collect and verify this proof at the point of registration, before the exemption is applied to the bill. Without this documentation on file, there is no basis to leave out the service tax, and the facility would be expected to charge it as usual.

This addition was introduced as a new paragraph under the policy, with the change taking effect from 1 July 2025. It sits alongside other exemptions already in place for consultation fees, health screening for non-citizen workers, and foreign diplomats, all of which private healthcare facilities are expected to apply correctly and consistently.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning, e-stamping, corporate secretarial and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.

Follow our WhatsApp Channel for regular updates: https://august.short.gy/whatsapp-channel

18/08/2026

Employment services are a taxable service under Malaysian service tax law. A company that supplies workers to another business is generally required to charge service tax on that arrangement.

There is one common exception. When an employer temporarily places its own worker with another company, instead of supplying manpower as a business, this is called secondment and it is not taxed. The same applies when the employment service is for work done outside Malaysia.

The tricky part has always been telling a real secondment apart from what is actually outsourcing in disguise, which stays taxable. The Royal Malaysian Customs Department has now issued a new ruling, Ketetapan Umum Bil. 5/2026, to set out exactly what makes an arrangement a genuine secondment.

Under the ruling, all of the following must be true. There must be a loan of employee agreement between the original employer and the receiving company. The original employer must not be in the business of supplying workers, such as an employment agency. The worker is moved temporarily for a fixed period and returns to the same employer after. Employment with the original employer continues without any break. During the loan, the worker works only for the receiving company, which has full control over him. Salary and allowances are paid by the receiving company, with no extra charges added. The secondment must last less than six months in that year, and cannot spill over into the next year.

If even one condition is not met, the arrangement is treated as a taxable employment service.

Companies that lend staff to related companies or business partners should check their arrangements against these conditions, since missing even one can turn a tax free arrangement into a taxable one.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning, e-stamping, corporate secretarial and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.

Follow our WhatsApp Channel for regular updates: https://august.short.gy/whatsapp-channel

17/08/2026

When a customer pays before the job is done or the goods are delivered, many business owners are not sure what to do with the e-invoice. Does it go out immediately when the money comes in, or only when the full transaction is concluded?

The confusion is understandable. In practice, some suppliers issue a proforma invoice when collecting an advance, then follow up with the actual invoice later. Others treat all upfront payments the same way regardless of whether the amount can be refunded. Neither approach is necessarily wrong, but the e-invoice obligation depends on one specific question: is the deposit refundable or not?

Under LHDN's e-invoice framework, a refundable deposit does not require an e-invoice at the point of collection. Because the money may be returned to the buyer, there is no completed transaction to document and no e-invoice obligation arises at that stage. Equally, when a refundable deposit is eventually returned to the buyer, no refund note e-invoice is required either.

A non-refundable deposit is treated differently. Once a customer pays a booking fee or commitment deposit that they cannot get back, an e-invoice is required. That money is income from the moment it is received, and the e-invoice must reflect that.

The proforma invoice does not change this. A proforma is not a validated e-invoice and does not satisfy the requirement. If the deposit collected under a proforma arrangement is non-refundable, the obligation to issue and submit a validated e-invoice to MyInvois arises at the point the non-refundable payment is received, not at the point the final invoice is issued.

Getting this right matters because LHDN can compare your submitted e-invoices against your actual receipts. A consistent pattern of non-refundable deposits collected without a corresponding validated e-invoice is the kind of gap that surfaces during a tax audit.

If you are unsure how this applies to your business, feel free to reach out to us on WhatsApp at 010-246 2151.

Follow our WhatsApp Channel for regular updates: https://august.short.gy/whatsapp-channel

17/08/2026

A short video guide has been created to walk through how to use the free Google Sheets invoice extractor template shared earlier. The template was built to help business owners and accounting teams automatically pull vendor name, invoice number, date, subtotal, tax, and total from invoice PDFs or photos, without manual data entry.

The video covers how to make a copy of the template, how to upload an invoice, and where the extracted data appears once processed. It is intended for anyone who wanted to try the template but was unsure how to get started.

The template itself remains free to use and runs on Google's free AI tier, with all processing taking place within the user's own Google account.

A copy of the template can be made directly from this link:
https://docs.google.com/spreadsheets/d/1mAw2zHltmgYypBJAP3Hzol_96Mb5OwnI-4PrIkxZj8k/copy

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning, e-stamping, corporate secretarial and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.

Follow our WhatsApp Channel for regular updates: https://august.short.gy/whatsapp-channel

13/08/2026

We used to process invoices manually, opening each PDF, reading the figures, and typing them into a spreadsheet or accounting system one line at a time. For a business receiving forty invoices a month, this can take more than three hours purely on data entry, every single month.

The template we actually use in-house today is a lot more tailored and a lot more complicated than what we're sharing here, built specifically around how our own team works. But we thought it would be more useful to share a simpler version instead, something anyone can pick up and try, just to help people get started with a bit of AI knowledge.

It's a Google Sheets template that reads invoices for you. Upload a PDF or a photo of the invoice, and it pulls out the vendor name, invoice number, date, subtotal, tax, and total into a table. No manual typing.

It runs on Google's free AI tier, so there's no cost to try it. Everything stays inside your own Google account.

Feel free to make a copy and use it:
https://docs.google.com/spreadsheets/d/1mAw2zHltmgYypBJAP3Hzol_96Mb5OwnI-4PrIkxZj8k/copy

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning, e-stamping, corporate secretarial and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.

Follow our WhatsApp Channel for regular updates: https://august.short.gy/whatsapp-channel

13/08/2026

Most directors in Malaysia assume that once a company winds down or they resign, the company's tax problems belong to the company. Section 75A of the Income Tax Act 1967 says otherwise, and many directors find this out only when LHDN issues a demand notice in their personal name.

Under Section 75A(1), any person who is a director of a company during the period in which tax is due and unpaid is jointly and severally liable for that tax. This applies to corporate income tax and to unpaid PCB, which is the monthly tax deduction the company is required to withhold from employee salaries and remit to LHDN. If the company fails to remit PCB, every qualifying director is personally on the hook.

The definition of director under Section 75A(2) is deliberately broad. It covers not only persons formally appointed as directors but also anyone involved in managing the company's business who owns or controls, directly or indirectly, at least 20 percent of the ordinary share capital. This means a working shareholder who has never held a formal director title can still be personally liable if their ownership meets the threshold.

There is no protection in resignation. If the tax liability arose during your tenure, LHDN can pursue you personally even after you have left the company. The liability does not expire with your directorship.

From a Companies Act perspective, Section 213 already requires every director to act with reasonable care and diligence. Allowing tax arrears to accumulate without remedial action is itself a breach of director duties, compounding the exposure further.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.

Follow our WhatsApp Channel for regular updates: https://august.short.gy/whatsapp-channel

11/08/2026

A set of rules gazetted on 11 August 2026 allows employers to claim a tax deduction for giving employees additional paid leave to care for a young child, a sick family member, or a disabled family member. The rules apply retrospectively, with effect from year of assessment 2025 to year of assessment 2027.

Under the rules, a qualifying employer can deduct an amount equal to fifty percent of the remuneration paid to an employee during this additional paid leave. This deduction is on top of the normal deduction already allowed under section 33 of the Income Tax Act 1967. The leave must cover care for a child under two years old, an immediate family member who is sick, or an immediate family member who is disabled.

The deduction period cannot exceed twelve consecutive months in a year of assessment. The employee must be employed on a full-time basis. Care of a sick family member must be certified by a medical practitioner registered with the Malaysian Medical Council. Care of a disabled family member must be certified by the Department of Social Welfare.

Compliance with these conditions is verified by Talent Corporation Malaysia Berhad, from 1 January 2025 to 31 December 2027.

A qualifying employer does not include a company controlled by the employee, a sole proprietorship, or certain relatives of the employee.

Immediate family member is defined broadly to include a spouse, parents including parents-in-law and adoptive or step-parents, children including stepchildren and adopted children, siblings, and grandparents.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning, e-stamping, corporate secretarial and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.

Follow our WhatsApp Channel for regular updates: https://august.short.gy/whatsapp-channel

11/08/2026

A loan between two related companies is often seen as a simple contractual arrangement, no different from any other loan on paper. However, the name given to a transaction does not decide how it is treated for tax purposes. What matters is whether the arrangement truly works like a loan or whether it is, in substance, an equity contribution presented as a loan.

This distinction is at the heart of Malaysia's transfer pricing rules for intra-group loans. Several features help distinguish a genuine loan from disguised equity. A genuine loan has a clear obligation to repay, a fixed repayment date, an interest rate that does not depend on the borrower's business performance, and a lender who has priority over shareholders if the company is wound up. Equity, on the other hand, has no fixed return, no repayment date, and is only repaid after all creditors have been paid. No single feature decides the outcome. Instead, the tax authorities look at the overall arrangement, including whether the written agreement matches how the parties actually behave.

Where a loan does not have these features, especially where there are no fixed repayment terms, no arm's length interest rate, and no security or conditions that an independent lender would normally require, the transaction may be treated as equity instead of a loan. If this happens, any interest claimed as a tax deduction may be disallowed in full. This can result in additional tax, together with surcharges on the transfer pricing adjustment.

For businesses with related companies lending to one another, the safest approach is to make sure the loan not only looks like a genuine loan on paper, but also continues to operate like one throughout its life.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning, e-stamping, corporate secretarial and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.

Follow our WhatsApp Channel for regular updates: https://august.short.gy/whatsapp-channel

10/08/2026

If you own properties and rent them out in Malaysia, how your rental income is classified can significantly affect your tax position. The difference is not just about labels. It influences the expenses you can deduct and whether capital allowances may be available.

Rental income generally falls under either Paragraph 4(a) or Paragraph 4(d) of the Income Tax Act 1967, depending on the nature of the activity. The distinction is based on facts and circumstances, particularly the level of services provided and the degree of active management involved.

Where the letting activity amounts to a business under Paragraph 4(a), deduction rules are generally broader. Revenue expenses incurred wholly and exclusively in producing the income may be deductible, subject to the provisions and restrictions of the Income Tax Act 1967. In appropriate cases, capital allowances may also be available on qualifying plant and machinery used for the business, such as certain furnishings, equipment and mechanical systems.

By contrast, passive rental income generally falls under Paragraph 4(d). In these cases, deductible expenses are typically limited to direct expenses incurred in producing the rental income. Common examples include assessment and quit rent, interest on financing, insurance, rent collection expenses, rent renewal expenses and ordinary repairs to maintain the property.

The practical difference can be substantial. A property rental activity treated as a business under Paragraph 4(a) may allow broader deductions and access to capital allowances. Passive rental income under Paragraph 4(d) is generally more restrictive.

Whether your rental income qualifies for Paragraph 4(a) treatment depends on whether you are comprehensively and actively providing maintenance or support services on your properties. That determination is set out clearly in Public Ruling No. 12/2018 issued by LHDN.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, and tax planning matters for you. Feel free to WhatsApp us at 010-246 2151.

Follow our WhatsApp Channel for regular updates: https://august.short.gy/whatsapp-channel

07/08/2026

The Inland Revenue Board of Malaysia (LHDN) issued a media statement dated 7 August 2026 clarifying how stamp duty applies to employment contracts. The clarification sets out three types of treatment.

The first type covers instruments listed under the Exemption category in the First Schedule of the Stamp Act 1949. This includes employment contracts where the monthly salary does not exceed RM3,000. These contracts do not need to be stamped or endorsed at all. In simple terms, if an employee earns RM3,000 or less a month, the employer does not need to do anything with the contract for stamp duty purposes.

The second type covers instruments under the General Exemption category, referring to those exempted under section 35 of the Stamp Act 1949. These instruments are still exempted from stamp duty, but they must be endorsed. Endorsement means the document is submitted to LHDN for confirmation that it qualifies for the exemption. This step exists so that only the correct parties and the correct type of document can benefit from the exemption.

The third type applies to employment contracts where the monthly salary exceeds RM3,000. Here, only the main contract, the one setting out the actual terms and conditions of employment between employer and employee, needs to be stamped and endorsed. Any supporting documents linked to the same employment do not need separate stamping or endorsement.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning, e-stamping, corporate secretarial and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.

Follow our WhatsApp Channel for regular updates: https://august.short.gy/whatsapp-channel

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