Service Tax - Filing of Return

Service tax is due and payable within 28 days after the taxable period of 2-month-cycle after the invoice has been paid off by client. For example, January to February's service tax is due and payable by 28th of March, March to April's service tax is due and payable by 28th of May.

Firstly, all invoices within the taxable period and with service tax payable are gathered and reconciled to the accounting records to ensure completeness. This step is to report to Customs Authority the total of invoice amount billed WITH service tax. I would recommend entering the invoice details such as issue date, invoice number, client name, amount of service subject to service tax, and service tax amount into a spreadsheet for easy referencing.


Then, check each transaction to find out its paid off date. For invoices issued in taxable period of January - February and invoice paid during February, mark down the paid off date (for instance, 20th Feb) at the last column of the specific transaction in the spreadsheet. This will allow you to identify which invoice's service tax is payable.

Thirdly, total up the amounts and reconcile against your accounting records. You should get a total amount of service tax for invoices issued during the taxable period agee to your service tax payable ledger, and the total service tax payable for all the invoices paid off during the taxable period agree to your debtors ledger.

Finally, fill up the return form obtained from Customs Authority and get Director's signature to approve the return. Cheque is then issued to Customs Authority for the amount payable.

One more additional step will required if the return is not furnished by 28th days after the taxable period, a 10% penalty will be charged to the total amount of service tax payable for every thirty days intervals, up to the maximum of 50%. For instance, if return is submitted after 28th March for Jan-Feb return, you will need to include a 10% penalty charge of the total amount payable. If the return submitted on 1st May (which is more than 30 days after 28th March), the penalty charge increased to 20% of the amount payable. This penalty can be increased up to a maximum of 50%.

Increase of Share Capital

There are several reasons that a company will need to increase in their share capital. These reasons may include injecting new working capital, selling of shares to investors, and so on. It is a rather simple practice in normal course of business.

The company secretary is the major party that involved in this practice. The steps of the whole practice is stated as following:

1. The management instruct the company secretary to increase the share capital.
2. Company secretary will need to acquire proof of injection either by cash injection (Bank in Slip) or by others (amount due to director or creditor account).
3. Company secretary will then prepare the documentation and resolutions for the Board of Directors to sign and return.
4. Upon receipt of documentation, company secretary will file in to SSM for the increase of share application.

Thus, the whole process is completed.

Company Matters - Change of Company's name

In normal course of business, there will be some time that we need to change the company's name to suit the nature of business or for some other reasons. The change of name basically involved in 3 parties: the company (represented by Account Department), Company Secretary, and Suruhanjaya Syarikat Malaysia (SSM). It may involved other authorities, such as Bank Negara Malaysia, if you are licensed under certain Company Acts.

Steps included the following in sequence:-

1. The company's representative contacted Company Secretary firm to do name search with SSM. This step is to ensure that the preferred company's name is available for reservation. If the preferred name is somewhat similar to an existing company's name, SSM will require a Letter of Consent from the existing company to allow the usage of similar name. Otherwise the reservation will not be succeeded.
2. Once the Company Secretary reserved the preferred name from SSM, the reservation will be valid for 3 months. Documents such as Board of Directors Resolution and so on will be prepared for the signature of Directors by the Company Secretary; and this is the stage where planning for such change shall be finalized, i.e. design of logo with new company name such as "XYZ Sdn Bhd (formerly known as ABC Sdn Bhd)". The Italic phrase is required to be included for 1 year w.e.f. the change. Stationery such as letterhead, name cards and envelopes with new logo (with the Italic phrase as well) to be printed for 1 year usage; notification lists for client, suppliers and bankers to be prepared beforehand; and etc.
3. After the documentation and planning in place (it can be planned before the reservation of name), the Company Secretary can then file in the change of company name application with SSM. Once the application is approved, SSM will provide the company a Form 13 to effect the change. Thus, all planned actions shall be acted in order to notify the stakeholders for such changes.

Although the above steps are quite simple, the planning stage is inevitable so that to ensure the smooth transition of such change. You may need to think about the website content to be modified, URL to be changed (or maybe reserve the old one as a secondary page or re-direct page), newspaper advertisement to be posted (when and where), and so on. It is a rather long process so do plan it earlier and expect the whole process to drain your resources for 3-6 months.

Most importantly, consider the cost-benefit-analysis whether the value of such change can cover the cost of the change: all printed materials with the phrase "formerly known as ABC Sdn Bhd" are required to be replaced by ONLY the new company name without the Italic phrase after 1 year. This means that the printer plates for all letterhead, name cards, and envelopes will need to be disposed off (unless you are using a digital printer). These costs maybe big enough to bog down the cashflow twice for the whole name change process.