Country Specific Functionality (CSF) Malaysia

Overview

As your business grows and expands into Malaysia, the Malaysia CSF helps to keep your Epicor Financials system compliant from day one to save time and expense. The CSF package contains the most used financial and operational functionalities in the country including:

• Sales Tax Exemption (CJ5) Report
• Licensed Manufacturing Warehouses (LMW) Reports
• Sales Service Tax (SST) Report
• Other Documents in Local Format
• Periodic Average Costing
• Actual Cost Allocation
• E-invoicing and live reporting

Sales Tax Exemption (CJ5) Report

The purpose of CJ5 report is to declare goods being manufactured that are eligible for sales tax exemption. This is a quarterly report.

• Raw materials and finished goods must be lot-tracked for the CJ5 (Sales Tax Exemption) report.
• Exemption is covered by the Sales Tax Order (Exemption) 1980, clause 99, Table B. It enables Sales Tax exemption to those local factory operators who manufacture goods for export.
• The exemption is also controlled by the Ration Control Act 1961, which secures a price control allowing raw materials (including packaging material) to exempt from sales tax.
• In order to qualify for sales tax exemption, businesses in Malaysia need to submit their application early to local authorities, as it takes approximately three to six months for processing. Companies normally plan their purchase operations in advance and send in the CJ5 application for approval. Once approved, purchases of parts are exempted from tax. If purchase of parts exceeds the quantities approved, the remaining parts are subject to taxes.

Sales Service Tax (SST) Report

Malaysia transitions from Goods and Service Tax (GST) to Sales and Service tax (SST) from 2018. The sales tax will be only imposed at the manufacturer or the consumer level. Service tax is imposed to consumers who are using taxable services.

The Epicor Financials Malaysia CSF package enables detailed SST reporting to help with filing tax returns.

A special tool allows to configure the SST report, contributing to the report generation with minimal manual efforts.

Licensed Manufacturing Warehouses (LMW) Reports

The purpose of the LMW reports is to track the movements of all finished goods in Licensed Manufacturing Warehouses (LMWs). These warehouses are authorized to use Customs Duty and Sales Tax exemptions in the export-oriented manufacturing industries.

• Raw materials and finished goods must be marked for LMW processing in the Epicor ERP application.
• The Malaysian Director General of Customs introduced Section 65 and 65A in the Customs Act in 1967 which aim to incent and help export-oriented manufacturing industries. Local and foreign manufacturers granted with the Licensed Manufacturing Warehouse (LMW) status are entitled to use Customs Duty and Sales Tax exemptions.
• International Procurement Center (IPCs) are companies established in the country (owned by locals or foreigners) who run businesses in Malaysia, with the main activity of purchasing and selling raw materials, components and finished goods in Malaysia and in other countries.

IPC companies can manage their Licensed Manufacturing Warehouses (LMW) in Free Industrial Zones (FIZ). Goods not used for manufacturing can be transported to an LMW in a FIZ for repackaging and distribution to end consumers. IPC companies need to obtain approval from the Ministry of International Trade and Industry (MITI) under the IPC Incentive Scheme.

LMW Raw Material Movement Report (M1)

This report lists inventory transactions in an LMW that imported raw materials and used these for manufacturing.

LMW Finished Goods Report (M2)

This report lists inventory transactions in an LMW that shipped finished goods.

Annual LMW Report (M4)

This report shows a monthly summary of all inventory transactions in an LMW.

Documents in Local Format

The Epicor Financials Malaysia CSF package offers locally used formats for several financial accounting and operational documents.

The package comes with specific layouts for:

• Customer Statement
• Accounts Receivable (AR) Tax Invoice
• AR Credit Note

Deemed Supply Report

The Deemed Supply MY program helps with generating reports for the taxable sales with the DS (Deemed Supply) tax code or tax rate code applied.

Periodic Average Costing

This inventory costing type is based on the cost of the inventory in the beginning of the period, and all the purchases in the specific period are included in the calculation. The functionality includes the Periodic Average Costing Workbench and a Periodic Average Costing report.

Actual Cost Allocation

Manufacturers can collect the actual manufacturing costs at the end of each fiscal period. The collected costs are allocated to the manufactured products. A pre-defined allocation base is installed with the CSF package, defining the cost re-calculation process. The functionality includes the Actual Cost Allocation Workbench and these reports: Summary, Details, GL transactions.

E-Invoicing and Live Reporting with Storecove

Epicor partnered with Storecove, to provide a reliable, powerful service to customers to manage e- invoices and live reporting in Malaysia. Thanks to the integration with Epicor Financials, customers do not need costly development or integration with third- party systems. The integration with the Storecove service helps customers remain compliant with the Malaysia e-invoicing requirements easily.