Legal Updates

Legal Updates for Jul - 2019

Legal Certainty for VAT Treatment of Imported Goods used for Activities to Utilise Offshore Taxable Service

In 2017, the Minister of Finance issued Regulation No. 178/PMK.04/2017 on Temporary Import ("Temporary Import Regulation"), which stipulates two types of temporary imported goods:

  1. Temporary imported goods that are exempted from customs duty, where the customs authority would not collect value-added tax ("VAT") or value-added tax and luxury goods sales tax ("LST") and Article 22 Income Tax; and
    2. temporary imported goods that can receive customs duty relief, where the customs authority would only collect VAT or VAT and LST and no Article 22 Income Tax will be collected.
  2. In relation to item 2 above, if the temporary imported goods relate to the utilisation of taxable service from outside the Indonesian customs area within the Indonesian customs area, i.e. in the form of asset rental, then the importer may apply for a statement letter (Surat Keterangan Pemanfaatan JKP dari luar Daerah Pabean di dalam Daerah Pabean or "SKJLN") to the Directorate General of Tax ("DGT"), which can then be used by the importer to claim non-collection facility for VAT or VAT and LST from the Directorate General of Customs and Excise.

After more than a year since the Temporary Import Regulation becomes effective, the DGT has now issued Regulation No. PER-12/PJ/2019 on Procedure to Obtain SKJLN (“SKJLN Regulation”), which applies not only for rental with temporary import mechanism, but also for rental without temporary import mechanism.

15 Jul 2019 | Indonesia

Upcoming Changes to the Intellectual Property Dispute Resolution System in Singapore
The new Intellectual Property (Dispute Resolution) Bill (the "Bill") was read for the first time in Parliament on 8 July 2019. Progress of the Bill will be of keen interest to all Intellectual Property ("IP") right holders, as several enhancements to the IP dispute resolution system in Singapore have been put forward. This Update examines the key features of the Bill, as well as what IP right holders can expect from the new IP dispute resolution system.
15 Jul 2019 | Singapore

Recent Updates to Chinese Cybersecurity and Data Protection Measures

The Cyberspace Administration of China recently released a series of draft measures and regulations pertaining to cybersecurity and data protection in China for public comments in quick succession. The measures and regulations will impose higher standards and strengthen China’s cybersecurity and data protection regime across various sectors and fields of application. This update will examine the measures and regulations, as well as their potential implications.

11 Jul 2019 | China

Recent Updates to Chinese Cybersecurity and Data Protection Measures
The Cyberspace Administration of China recently released a series of draft measures and regulations pertaining to cybersecurity and data protection in China for public comments in quick succession. The measures and regulations will impose higher standards and strengthen China's cybersecurity and data protection regime across various sectors and fields of application. This update will examine the measures and regulations, as well as their potential implications.
11 Jul 2019 | Singapore

Shariah Advisory Council: Judicial Body or Statutory Expert?

The Federal Court judgment of JRI Resources Sdn. Bhd. v Kuwait Finance House (Malaysia) Bhd., issued on 10 April 2019, considered the constitutionality and the validity a ruling issued by the Shariah Advisory Council ("SAC") pursuant to a reference by the High Court. The question that arose was whether Sections 56 and 57 of the Central Bank of Malaysia Act 2009 ("CBMA"), which compelled the court or arbitrator to refer a dispute relating to Islamic finance to the SAC, whereupon any ruling of the SAC on the same, would be binding on that court or arbitrator, had the effect of usurping judicial power such that the judge was prevented from determining the issue and the parties' rights and liabilities at hand. In this article, we unravel the premise of the judgement, which sets the boundaries for judicial power and recognises whether the SAC emulated such power when it ascertains Islamic law in relation to Islamic finance and issues a ruling that is binding upon courts or arbitrators.

08 Jul 2019 | Malaysia

Race to the Finishing Line – An Adjudication Determination's 'Best Before' Date?
The Building and Construction Industry Security of Payment Act sets out a mechanism by which contractors can make progress payment claims. What a successful claimant holds in its hands at the end of the adjudication process is an adjudication determination. The question is: does the claimant have an option as to which determination to enforce, if a subsequent adjudication determination (taking into account the former) has been made? The recent Singapore High Court case of United Integrated Services Pte Ltd v Civil Tech Pte Ltd and another [2019] SGHC 32 had the opportunity to decide on such situation.
05 Jul 2019 | Singapore

Active Income Excluded from the Calculation of Deemed Dividends under the Controlled Foreign Company Rules

To encourage transparency, provide legal certainty and fairness in the imposition of tax to Indonesian resident taxpayers for their equity participation in a foreign business entity other than business entities listed on a foreign stock exchange, the Ministry of Finance recently amended Minister of Finance Regulation No. 107/PMK.03/2017 ("2017 CFC Rules") by issuing Minister of Finance Regulation No. 93/PMK.03/2019 on Controlled Foreign Company ("CFC") Rules ("New CFC Rules"). The New CFC Rules will apply for fiscal year 2019.

The New CFC Rules reflect the exclusion of active income and provide a definition for 'certain income' (penghasilan tertentu) from the calculation of deemed dividends for a directly- and indirectly-owned CFC.

04 Jul 2019 | Indonesia

Services Between Related Foreign Companies No Longer Require a Foreign Business License

A newly issued Ministerial Regulation, published in the Royal Gazette on 25 June 2019, has lifted the constraint on majority foreign-owned companies providing services to other members of their group without first obtaining a Foreign Business License. Until recently, this meant that a majority foreign-owned company could not lend funds domestically or sub-lease office space to a related company within its group – essentially it could not set up as a “back-office service provider” - without first obtaining a Foreign Business License. The newly issued Ministerial Regulation will allow majority-owned foreign companies to reconsider how services are provided amongst group members.

04 Jul 2019 | Thailand

MAS Consultation Paper on Payment Services Notices on AML/CFT
The Payment Services Act, passed in Parliament earlier this year, is set to impose major reform on the payment services regime, consolidating the regulation of payment services under a single legislation and expanding the scope of regulated services. On 6 June 2019, MAS issued a consultation paper on Proposed Payment Services Notices on Prevention of Money Laundering and Countering the Financing of Terrorism, providing further guidance on the requirements of licence holders relating to Anti-Money Laundering and Countering the Financing of Terrorism. This Update looks at the proposed notices and the new requirements which MAS seeks to introduce.
03 Jul 2019 | Singapore