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During the recent period, there are many inquires on the definition of Small Medium Enterprises "SME" due to the applications of many subsidies programs. Hence, here is a quick recap on the definition of SME.  Two qualifying criteria to define SME: a. Annual sales or b. Number of full time employees whichever is lower. Example: a. Manufacturing sector, qualifying criteria to be categorized under SME are either sales turnover not exceeding RM50 million OR number of full time employees not exceeding 200. b. Services and other sectors, qualifying criteria to be categorized under SME are either sales turnover not exceeding RM20 million OR number of full time employees not exceeding 75. *All entities must registered with SSM or other qualifying bodies. Who are not qualify?
Source: https://www.smecorp.gov.my/images/pdf/Guideline_New_SME_Definition_updated.pdf Source: https://www.smecorp.gov.my/index.php/en/policies/2020-02-11-08-01-24/sme-definition Photo credit: https://www.smecorp.gov.my/index.php/en/policies/2020-02-11-08-01-24/sme-definition If you need further clarification, please do not hesitate to contact our tax team.
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 The Employee’s Provident Fund (EPF) launched its Employer COVID-19 Assistance Programme (e-CAP) to assist Small and Medium Enterprises (SMEs) to manage their monthly cash flow and sustain business operations. How it works? E-CAP programme allows eligible employers to apply for decrement and restructuring of employer contributions for the months of April to June 2020 (i.e. March to May 2020 wages). The deferred contribution will need to be settled over a maximum period of 3 month. This is specifically for contributions months of April, May and June 2020. The settlement of restructured payments must be made by 30 December 2020. Would the contributions for other months not covered under e-CAP programme still need to be made?
Who is eligible? To be eligible to apply for the e-CAP programme, the employer must:
Would the contributions for other months not covered under e-CAP programme still need to be made?
Late Payment Penalty and Dividend
Payment method The instalment payments(s) can be made via:
How to apply? Eligible employers can apply for this programme online via the employer i-Akaun (Majikan) under the e-CAP function on a monthly basis when needed. If you need further clarification, please do not hesitate to contact our tax team.
Note: This is continuation from Part 2.  Dear fellow clients, Greetings. Hope you are doing well. In response to the previous Economic Stimulus Package (please refer to our previous email on Economic Stimulus Package 2020 (Prihatin Rakyat)), the Government has announced Additional PRIHATIN on 6 April 2020, which allocate RM 10 billion to reduce the burden of Small and Medium Enterprises (SMEs) during the pandemic. The additional PRIHATIN comprises of the following: (1) Employer Related Measures (2) Financial Assistance (3) Waiver or Discount on Rent (4) Companies Commission of Malaysia (3) Waiver or Discount on Rent Government-linked Corporations (GLCs) owned premises rented to retail SMEs Waiver of rent or discounted rent will be given to retail SMEs for premises owned by GLCs such as MARA, PETRONAS, PNB, PLUS and UDA. Private sector owned buildings and business premises rented to SMEs – Additional tax deduction Owners of buildings or business premises will be given an additional tax deduction equivalent to the amount of reduction in rent that is given to tenants which are SMEs for the months of April 2020 to June 2020. To qualify for this deduction, there must be a minimum 30% reduction in rent during this period. The mechanism for claim of this “additional” deduction is not known at this point in time. In general, double or further deductions are granted on an expense that is incurred. In this case, the discount or waiver represents a reduction of income rather than an incurred expense. It is also unknown if this incentive is applicable to both rental that is assessed as business income and passive income. (4) Companies Commission of Malaysia Automatic moratorium for submission of statutory documents An automatic moratorium of 30 days from the end of the Movement Control Order period is given to companies to submit statutory documents to CCM. Extension of time (EOT) for submission of financial statements Companies are given an EOT of 3 months from the end of the MCO period to submit their financial statements to CCM. This EOT is given to companies with financial years ending 30 September 2019 to 31 December 2019. An application has to be made to CCM for this EOT. No late submission fee will be imposed. Let us know if you need any support as we will try our best to provide assistance. Please stay healthy and stay vigilant. Together we will emerge stronger! If you need further clarification, please do not hesitate to contact our tax team. Note: This is continuation from Part 1. Dear fellow clients, Greetings. Hope you are doing well. In response to the previous Economic Stimulus Package (please refer to our previous email on Economic Stimulus Package 2020 (Prihatin Rakyat)), the Government has announced Additional PRIHATIN on 6 April 2020, which allocate RM 10 billion to reduce the burden of Small and Medium Enterprises (SMEs) during the pandemic. The additional PRIHATIN comprises of the following: (1) Employer Related Measures (2) Financial Assistance (3) Waiver or Discount on Rent (4) Companies Commission of Malaysia (2) Financial Assistance Special PRIHATIN Grant for Micro SMEs A special PRIHATIN grant of RM 3,000 will be made available to each eligible Micro SME. The SME must register with the Inland Revenue Board to enjoy this assistance. The definition of Micro SMEs is not mentioned in the announcement. SME Corporation Malaysia defines a Micro Enterprise as a company engaged in manufacturing, services and other sectors, with annual sales turnover not exceeding RM 300,000 or with full time employees not exceeding 5 workers. Moratorium on Instalment Payment Government has also called on ending organisations listed below Money Lender Act 1951, who provide credit facilities to impose a moratorium on SME instalment payment for 6 months beginning April 2020, as provided by bank. Abolishment of Interest rate under Micro Credit Scheme The Government will abolish the 2% interest rate to 0% for loans given under Bank Simpanan Nasional’s Micro Credit Scheme amounting to RM 500 million. TEKUN Nasional will also be extending interest free loans to Micro SMEs with a maximum loan of RM 10,000 per borrower. Note: Applicants can only choose either one of the above schemes to enable more businesses to enjoy this assistance. To ensure that all PRIHATIN initiatives (including the additional ones) can be implemented quickly and smoothly, an inter-agency economic stimulus implementation and coordinating unit (LAKSANA) was set up by the Ministry of Finance (MoF). This unit will constantly monitor and report the progress of the implementation of all initiatives to the MoF and the prime minister himself. To support the delivery of PRIHATIN initiative, the https://imsme.com.my/portal/en/ portal operated by Credit Guarantee Corporation (CGC) with the support of Bank Negara Malaysia (BNM) is ready to accept SME loan applications. The portal also provides myKNP which is an advisory service about financing for SMEs. If you need further clarification, please do not hesitate to contact our tax team. Dear fellow clients, Greetings. Hope you are doing well. In response to the previous Economic Stimulus Package (please refer to our previous email on Economic Stimulus Package 2020 (Prihatin Rakyat)), the Government has announced Additional PRIHATIN on 6 April 2020, which allocate RM 10 billion to reduce the burden of Small and Medium Enterprises (SMEs) during the pandemic. The additional PRIHATIN comprises of the following: (1) Employer Related Measures (2) Financial Assistance (3) Waiver or Discount on Rent (4) Companies Commission of Malaysia (1) Employer Related Measures Enhancement of Wage Subsidy Programme (WSP) The Government has increased the allocation for the WSP that was revealed in the first Prihatin Economic Stimulus Package. Under the additional measures, the allocation for this programme will be expanded from RM 5.9 billion to RM 13.8 billion. Please refer table below for further information:  Note: The loss of revenue should be calculated by comparing the revenue or sales in January 2020 compared to the subsequent months. Employer must produce the declaration form in PSU50 which declares that the employer has suffered that loss of revenue, together with the supporting documents such as financial statements or sales report that been certified by management. There is no requirement for the financial statements or sales report to be audited. However, employers who make a false declaration may be subject to legal action.
Source: mpma.org.my/v4/wp-content/uploads/2020/04/200406_Soalan-Lazim-Program-Subsidi-Upah-Wage-Subsidy-PERKESO-latest-edited.pdf.pdf-1.pdf Reduction of Foreign Levy Foreign workers levy (excluding domestic maids) is reduced by 25% in respect of foreign workers with work permit expiring during the period of 1 April 2020 to 31 December 2020. Government encourages employers to actively engage with their employees on employment terms including the options of pay cuts and unpaid leave during the Movement Control Order period. Employers and employees may refer to the Department of Labour to seek advice on solutions for issues raised. Any negotiations should be subjected to employment laws currently being enforced. If you need further clarification, please do not hesitate to contact our tax team. |
