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Major Revision to the Customs and Excise Laws Take Effect on 1 January 2020

2019 draws to an end with a number of amendments to the Customs and Excise laws published on 31 December 2019 that take effect on 1 January 2020 .

These amendments cover a range of matters, including the introduction of the new Customs Regulations 2019 to supplement the Customs (Amendment) Act 2019 (Act A1593).

Other amendments include:-

•   Revised Customs Ruling Application form;

•   The introduction of the valuation method for determination of value of excisable goods locally manufactured (rules in respect of imported goods remain unchanged); and

•   Amendments to the Orders and Regulations pertaining to intoxicating liquors and Pangkor Island.

Please click on the above header link for the complete list of amendments at the official portal of e-Federal Gazette.

Customs Regulations 2019

The Customs Regulations 2019 gazetted provides more clarity in respect of the Customs (Amendment) Act 2019 (Act A1593) published on 9 July 2019 that introduced a total of 125 amendments to the Customs Act 1967 (Act 235).

The key amendments brought by the Customs (Amendment) Act 2019 (Act A1593) includes:-

•   Increased penalties for non-compliance;

•   Accurate Country of Origin declaration;

•   Shortening of the re-export period to qualify for Duty Drawback; and

•   Provisions in relation to Pangkor Island.

Please click on the above header link for our Tax Whiz – Amendment Bills 2019 dated 11 April 2019 for the detailed insights.

Excise (Determination of Value of Locally Manufactured Goods for the Purpose of Levying Excise Duty) Regulations 2019

For all excisable goods manufacturers, the Computed Value Method (“CVM”) is now mandatory in determining the excisable value of goods locally manufactured.

Manufacturers of sugar sweetened beverages, alcoholic beverages, passenger cars and tobacco products must take immediate steps in order to demonstrate that the price of excisable goods sold, whether to a related company or not, meets the new valuation requirements.  For CVM, each Stock Keeping Unit (“SKU”) is required to have a computation.  The calculation not only includes direct cost, it also requires a prescribed list of costs such as selling cost, royalty / licensing fees, warranty, etc. to be included.  This is not a straightforward process that often requires an extensive analysis of past and present records and data.

It is worth noting that the Sales Tax (Determination of Sale Value of Taxable Goods) Regulations 2018 that took effect on 1 September 2018 has very similar requirements in respect of sale between related companies.  Manufacturers of goods that are subject to both Excise Duty and Sales Tax should take steps to review and ascertain whether invoice value meet the requirements of the CVM. 

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Contact KPMG

Should you have any questions or require further clarification, please do not hesitate to contact any of our Executive Directors, Directors, Associate Directors or Managers whom you are accustomed to dealing with or who are responsible for the tax affairs of your organisation at the following telephone numbers for respective offices:

Petaling Jaya Office

Tai Lai Kok 
Executive Director –
Head of Tax and Head of Corporate Tax
ltai1@kpmg.com.my
+ 603 7721 7020

Long Yen Ping 
Executive Director –
Head of Global Mobility Services yenpinglong@kpmg.com.my
+ 603 7721 7018

Bob Kee 
Executive Director –
Head of Transfer Pricing
bkee@kpmg.com.my
+ 603 7721 7029

Ng Sue Lynn 
Executive Director –
Head of Indirect Tax
suelynnng@kpmg.com.my
+ 603 7721 7271

Soh Lian Seng 
Executive Director –
Head of Tax Risk Management
lsoh@kpmg.com.my
+ 603 7721 7019

Nicholas Crist 
Executive Director –
Corporate Tax
nicholascrist@kpmg.com.my
+ 603 7721 7022

Dato’ Leanne Koh 
Executive Director – 
Corporate Tax
leannekoh@kpmg.com.my
+ 603 7721 7026

Neoh Beng Guan 
Executive Director – 
Corporate Tax
bneoh@kpmg.com.my
+ 603 7721 7025

Ong Guan Heng 
Executive Director – 
Corporate Tax
guanhengong@kpmg.com.my
+ 603 7721 7027

Chang Mei Seen 
Executive Director – 
Transfer Pricing
meiseenchang@kpmg.com.my
+ 603 7721 7028

Ivan Goh 
Executive Director – 
Transfer Pricing
ivangoh@kpmg.com.my
+ 603 7721 7012

 

 

 

Evelyn Lee 
Executive Director –
Penang Tax
evewflee@kpmg.com.my
+604 238 2288 (ext. 312)

Regina Lau
Executive Director –
Kuching & Miri Tax
reglau@kpmg.com.my
+6082 268 308 (ext. 2188)

Titus Tseu
Executive Director –
Kota Kinabalu Tax
titustseu@kpmg.com.my
+6088 363 020 (ext. 2822)

Ng Fie Lih
Executive Director –
Johor Bahru Tax
flng@kpmg.com.my
+607 266 2213 (ext. 2514)

Crystal Chuah Yoke Chin
Tax Manager –
Ipoh Tax
ycchuah@kpmg.com.my
+605 253 1188 (ext. 320)