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Lecture 2 (Residence status of Co (Permanent establish (PE) (Income…

- - - - s.8(1)(b) Management and Control of its business
        
        exercised in M'sia
        
        Place of business
      - s.8(1)(c) Mgt and control of its affairs
        
        exercised in M'sia
        
        Place where the BOD meet
        
        Alert: Not place of operations or place company was incorporated
      - Case: Malayan Shipping Co Ltd v FCT
        
        Incorporated in SG and registered in SG
        
        However, the managing director and major shareholder in Australia
        
        The director made decision in Australia
    - - Company incorporated in M'sia but NOT TAX RESIDENT
        
        Foreign owned with proxy shareholders, nominee director
        
        no decision made in M'sia
        
        eg. Fulfillment centre of B2C businesses (TAOBAO or Amazon)
        
        Sales branch setup by Foreign company
        
        Income derived from M'sia will be tax
  - - - income taxability
    - - No obligation to withholding tax
      - Entitlement tax incentive ( Promotion of Investment Act 1986)
      - lower tax rate (depend on Paid up capital)
      - Entitlement double tax relief (If suffered foreign tax) Sch 7, para 1
  - - - If less than 6 month
        
        will be taxed as special classical of income s.4(A)
    - - will be taxed as s.4(a) at non resident tax rate
      - Withholding tax applies (s.107A)
- - - - Tax resident
  - - - Not tax resident
    - - Not related to trade
        
        NOT Permanent Establish
  - - - Taxed at non-resident tax rate, operation in M'sia s.12(1)(a)