Latest news with #CertificateofPracticalCompletion
New Straits Times
3 days ago
- Business
- New Straits Times
Efficient tax rules for contractors bring relief
KUALA LUMPUR: THE government has moved to streamline tax treatment on construction projects, offering a more practical and industry-aligned approach to profit recognition, in a breakthrough welcomed by the construction sector. The Master Builders Association Malaysia (MBAM) on Dec 6, 2021, formally appealed to the Finance Ministry to review the Inland Revenue Board's (IRB) longstanding practice of using the Certificate of Practical Completion (CPC) as the reference point for recognising profits or losses under the Income Tax (Construction Contracts) Regulations 2007 and Public Ruling No. 2/2009. MBAM argued that this approach did not reflect real-world business processes, as the CPC only certifies physical completion, while key financial elements such as variation orders, final costs and contractual claims often remain unresolved post-CPC. Requiring contractors to determine profit or loss at that stage could result in inaccurate tax filings and retrospective adjustments that risk penalties. To address the issue, MBAM proposed recognising project completion based on finalised accounts — either when no further costs are incurred and all payments are made, or within 18 to 24 months after CPC issuance. Through the Technical Working Group on Taxation (TWGT) under the Pemudah Special Taskforce to Facilitate Business, multiple engagements between the ministry, IRBM, MBAM and the Chartered Tax Institute of Malaysia (CTIM) were held between December 2021 and September 2023. This public-private collaboration yielded a practical resolution, where profit or loss recognition could now be deferred to the date final accounts are agreed between contractor and client, or 12 months after project completion — whichever is earlier. Penalties for revised tax returns arising from retrospective profit/loss adjustments will not be imposed, as confirmed through updated guidelines and future enhancements to IRB's public rulings. Following this, a Practice Note was issued on IRB's portal on March 29 last year and a comprehensive amendment to Public Ruling No. 2/2009 is underway, expected to be completed this year. This harmonised tax treatment aligns regulatory requirements with industry operations, supporting the government's Ekonomi Madani agenda to deliver more efficient, affordable housing and infrastructure. POSITIVE IMPACT The move has brought tangible benefits for contractors and construction firms, including improved cash flow management due to accurate tax assessments and reduced reliance on external borrowings, thus lowering business costs. The move also helps to free up financial resources for productivity-enhancing investments and allows greater certainty in tax reporting, reducing administrative and financial risks. MODEL FOR PUBLIC-PRIVATE PARTNERSHIP This success underscores the strength of public-private collaboration under Pemudah's framework, which is co-chaired by the economy minister, chief secretary to the government and a private sector industry leader. The Economy Ministry and the Malaysia Productivity Corporation serve as joint secretariats, while direction is provided by the National Economic Action Council, which is chaired by Prime Minister Datuk Seri Anwar Ibrahim. The initiative is also seen as a benchmark for effective policy reform that balances regulatory compliance with industry practicality, fostering long-term economic sustainability and competitiveness.
Daily Express
02-05-2025
- Business
- Daily Express
Pacific Heights buyers to know on May 2
Published on: Thursday, May 01, 2025 Published on: Thu, May 01, 2025 By: David Thien Text Size: According to William Chu some of the purchasers had passed away as some had waited for as long as two decades for their investments to be completed. Chu, a unit purchaser of the condominium project, has been waiting for a decade. Kota Kinabalu: Kota Kinabalu High Court Judge Alexander Siew will rule on the case filed by Pacific Heights condominium project buyers on May 2. In the proceedings on April 4, it was revealed by landowner Majlis Kebajikan dan Sukan Anggota Kerajaan Malaysia (Maksak), represented by its secretary Benedict Bin Anduaus, that PacifiCity land and were assets charged to Sabah Development Bank (SDB) for RM96 million as security, then for another RM40 million for additional security, and a further RM25 million. Alice Lim of Messrs. F. T. Ahmad & Co. acted for Maksak. SDB was represented by Arthur Borine. Senior Sabah lawyer Ronny Chiam assisted by Caroline Lee acted for the plaintiffs/buyers. They were seeking a court judgment to restore their property worth value to the Certificate of Completion stage in a condition to qualify to obtain the Occupancy Certificate from City Hall. Chiam said once he has obtained the court judgment, the liquidators for Apex Juta Sdn Bhd, the development company of the Pacific Heights Condominium, would have to comply and the same goes for the liquidator of PacifiCity developer firm - Pacific Sanctuary Holdings Sdn Bhd. By a Court Order on Oct 17, 2024, Dato' Raveendra Kumar a/l Nathan of RKN & Co. was appointed as Liquidator of Pacific Sanctuary Holdings Sdn Bhd. Ar. Lam Choi Sing @ Ling Choi Sing of Akitek Billings Leong & Tan Sdn Bhd was a witness brought to the stand by Chiam as the professional who signed the Certificate of Practical Completion (CPC) on Nov 27, 2020 for the project. Lam explained that Akitek Billings Leong & Tan Sdn Bhd took over the role in 2012. Lim: 'Can you describe how the site is delivered back to the developer/owner?' Ar. Lam: 'Usually before the Certificate of Practical Completion (CPC) is issued, there will be a joint site inspection whereby the consultants and the developer as well as the contractor are present. It is the main event that precedes the issuance of the CPC. The issuance of the CPC implies that the contractor no longer has possession of the site.' Lim: 'Are there any documents to be prepared for delivering the site back to the developer/owner after the issuance of the CPC?' Ar. Lam: 'I don't believe there was a document for this purpose.' Lim: 'In your professional opinion, is it a norm to have documents prepared for the purpose of delivering the site back to the developer/owner after the issuance of the CPC?' Ar. Lam: 'Usually we write to the client/developer informing them that the CPC has been issued and therefore they would be taking over the responsibilities of the insurance coverage and the security of the site.' Lim: 'Who are the consultants that you were referring to in your answer - 'That would be Apex Juta because they were the party that the consultants were dealing with directly'?' Ar. Lam: 'That would be the project consultant team that includes us, the architect, the civil and structural engineer, the mechanical and electrical engineer and the quantity surveyor.' SDB's counsel lawyer Arthur Borine cross-examined Ar. Lam: 'Do you agree with me that it is the developer's duty to ensure the compliance and to carry out any remedial work necessary for the issuance of the OC after the CPC has been issued?' Ar. Lam: 'Yes'. The limbo vandalised project sited on land title Town Lease (TL) 017546431 at Jalan Istiadat, Likas, Kota Kinabalu with Subsidiary/Strata Titles to be applied for) – Apartment A, was subjected to a spate of pilfering vandalism that had stripped it of its fixtures and fittings. According to William Chu some of the purchasers had passed away as some had waited for as long as two decades for their investments to be completed. Chu, a unit purchaser of the condominium project, has been waiting for a decade. He was present in court on with plaintiff Dr Constance Liew.
