On 1 April this year, Malaysia will replace the existing Sales and Services Tax with a new 6% GST, which will have a narrower and more specific list of exemptions for financial services than its nearby neighbour Singapore, according to a review by KPMG.
“In Singapore, financial services may be treated as zero-rated supplies if they are supplied to non-residents,” KPMG said. However, it said the transfer of securities or units in unit trusts traded in Malaysia, or insurance contracts relating to risks in Malaysia, may not escape the tax, even if supplied to an offshore person.
“We have had numerous meetings and seminars with regards to GST and thankfully it seems that the life brokers are zero rated; however I am uncertain what this means for life companies who are currently regulated under the LFSA (Labuan Financial Services Authority),” said Stuart Yeomans, chief executive of Farringdon Group, a Kuala Lumpur-based financial advisory firm. Zero-Rated Supply means goods and services sold by a company are free from GST.
Meanwhile Malaysian regulators are steadily stepping up their controls over financial advisers in a bid to raise standards and improve the quality of the market, and these are beginning to make life harder for small brokers, though they have yet to go as far as Singapore.
“Regulation is slowly stepping up. The barriers to entry are getting a lot higher,” Yeomans said.
Just in time for these important tax and regulatory discussions, International Adviser is delighted to announce its inaugural Expert Investor Forum in Kuala Lumpur.
IA’s Expert Investor Forum series has been running in Hong Kong, Singapore, Johannesburg, Cape Town and Dubai for many years and at last arrives in one of South East Asia’s most and dynamic countries on 8 April at the JW Marriott Hotel.
The Forum will feature a series of highly educational presentations on diverse investment topics, helping locally based advisers to understand a wider range of asset classes for their clients. In addition, a special panel CEO roundtable, entitled, “The Future of the Advisory Industry in Malaysia” will provide a chance for debate on vital future changes to the way advisers practise in Malaysia.
Investment themes on the day will include:
- Macro view of the world economy by Canaccord Genuity
- Australian economic outlook and residential mortgage-backed securities by FirstMac
- Lamborghinis and retirement – the post 2014 pensions world by Hansard
- Introduction to next generation structured products by Leonteq Securities
- Opportunities and pitfalls in the UK value and smaller companies sector by MitonOptimal.