Continuation from the previous post, and from the definition of Income Tax, that states that money that received in Malaysia but came from outside Malaysia are subjected to tax. The outside Malaysia term will fit in 'Foreign Source Income'. With effect from year 2004, individuals (again resident or non-resident) are assessable only on income accrued in and derived from Malaysia. This was an amendment made that any income that is made outside Malaysia is tax-free. But wait a minute? Is that possible. From the definition, and from Paragrah 28,Schedule 6 of ITA 1967, foreign source income is exempted from income tax.
However, with the term clearly defined, it still remain ambiguous at some point. The reason why as I put a scenario for you guys to think.
Mr J is a businessman from Malaysia and have been a Far-East representative for a company in US namely H. As a Far-East representative, his responsibility to do inspection and make report to the company H, via his expertise and experience in the industry. He is the only one in Malaysia that is working for H, and it had been going on since 2001 until now. All his money are paid from US and sent to Malaysia. With 2004 amendments on Foreign Source Income and by definition, he should be waived off from the tax.
But this remain untrue, as based on the true story and advise from accountants that audit his Income Tax stuffs, he is still entitled for the tax. And this may be the UGLY TRUTH, but I'm going to state to you guys. The reason is that, although the source is from Foreign, and it is subjected Mr J had to stay in US, just like if you are a Malaysian, have to stay for a certain period of time, only the income are not subject to tax.
This may seem funny, but I truly hope it can be debatable, but most auditors for Mr J had told the same thing. And this is a true story! Bite it and go!
Sunday, April 25, 2010
Wednesday, April 21, 2010
Doctrine of Utmost Good Faith
With lots of doctrine that our fellow lawyers have to know, and remember, we as the Business Law student should know it as well. In fact, the whole nation should be aware of this as this Doctrines are the one that is guiding us and helping us especially for human rights.
In insurance law, from the previous post, Doctrine of Utmost Good Faith is one of the most important element, not in other contracts, but solely on Insurance Contract. With the definition that, each party to a proposed contract is under a duty to disclose to the other all information which would influence his decision to enter into the contract, whether such information is requested or not.
AS simple as it is defines, it means a lot to make sure each and every word counts. In fact, good faith can be termed as genuine faith, and things that is genuine that is informed is to ensure trust from both parties. This is very important as the failure to fulfil or giving material information, will subject the other party to avoid the contract. As insurance contract are based on mutual trust, and with information definitely more well understood by each party, it is their job and responsibility to enlighten each other regarding it. The mutual trust and confidence bonding between the insured and the insurer can be termed as uberrimae fidei, the same meaning as utmost good faith.
A very important case of this can be adapted from the example of someone who had heart and lungs problem. However, though not disclosed in his life insurance, nothing happened until SARS strike through one day. The impact was heavy (as it is an acute pneumonia) causes the guy passed away due to it. And from the thorough inspection from the doctor with the report being given to the company, the company chose not to pay or compensate to the family because it is stated that the deceased did not notify that.
Thus, in this Doctrine, telling the right and actual information is very important. It is not like life that sometimes we can make assumptions, no, not a chance. And with that, do beware and keep your insurance agent knows everything bout you well.
In insurance law, from the previous post, Doctrine of Utmost Good Faith is one of the most important element, not in other contracts, but solely on Insurance Contract. With the definition that, each party to a proposed contract is under a duty to disclose to the other all information which would influence his decision to enter into the contract, whether such information is requested or not.
AS simple as it is defines, it means a lot to make sure each and every word counts. In fact, good faith can be termed as genuine faith, and things that is genuine that is informed is to ensure trust from both parties. This is very important as the failure to fulfil or giving material information, will subject the other party to avoid the contract. As insurance contract are based on mutual trust, and with information definitely more well understood by each party, it is their job and responsibility to enlighten each other regarding it. The mutual trust and confidence bonding between the insured and the insurer can be termed as uberrimae fidei, the same meaning as utmost good faith.
A very important case of this can be adapted from the example of someone who had heart and lungs problem. However, though not disclosed in his life insurance, nothing happened until SARS strike through one day. The impact was heavy (as it is an acute pneumonia) causes the guy passed away due to it. And from the thorough inspection from the doctor with the report being given to the company, the company chose not to pay or compensate to the family because it is stated that the deceased did not notify that.
Thus, in this Doctrine, telling the right and actual information is very important. It is not like life that sometimes we can make assumptions, no, not a chance. And with that, do beware and keep your insurance agent knows everything bout you well.
Tuesday, April 20, 2010
Caveat Emptor: Sales of Goods Law
Before continuing on the long Insurance Act case, let's bring back to one of the most important element in the chapter of Sales of Goods. As we can realise that each and every lessons that is learnt throughout the course, have something to be remembered.
As thus far, from
Contract Law, we have Doctrine of Stare Decisis,
Company Law, we have Doctrine of Separate Legal Entitiy
Insurance Law, we have Doctrine of Utmost Good Faith, and
in this context we have Doctrine of Caveat Emptor.
Taken from the Latin language, Caveat Emptor simply means ' Let the buyer Beware '.
How cool was that? But sound rather vague..but let me clarify some stuffs regarding it.
From Wikipedia explanation it goes like this,
"Under the doctrine of caveat emptor, the buyer could not recover from the seller for defects on the property that rendered the property unfit for ordinary purposes. The only exception was if the seller actively concealed latent defects or otherwise made material misrepresentations amounting to fraud. Before statutory law, the buyer had no warranty of the quality of goods. In many jurisdictions now, the law requires that goods must be of "merchantable quality". However, this implied warranty can be difficult to enforce and may not apply to all products. Hence, buyers are still advised to be cautious"
What does it mean is simply that, sellers should bear in mind the important elements of telling the truth. Of course, you and I know that in the real world, people will say that you won't earn money if you are telling the truth. But what let the buyer beware tells is that, the buyer should know the products and at some point, it is the seller's responsibility to ensure that the product is merchantable, or sell-able. This is essentially important, as many of us, can fall into a trap that this cases is actually a fraud or misrepresentation case. And as so many bad cases around the world, the only best method to counter this, is that, the buyer although guarded by this doctrine, should be smart and wise to choose and pick the right things, and know the right stuff.
And speculating on a small issue, let's put my name in this scenario, fictional but can happen.
Eric is eating in a Mamak Stall, and is having his sumptuous Nasi Kandar (wuallaa!). Having to savor his meal halfway, the waiter who served him earlier, walked to his side and wrote on the bill and placed it below the cup of his drink. Enjoying his food to the optimum, Eric did not flip the paper or bothered on the price? He is just too into the food. Great!!! And later after maximizing his marginal utility, he went to the counter wanting to pay before realising that the bill noted RM 15 ++.
Oh he goes, 'WOW, watha" and recalled what he just ate.
A plate of rice, with muttons and carry on top. No vege, no papadum, nothing extra. Just rice and mutton and curies. And what did he drink: Ice Tea.
In this situation, some people will just go, "S**t,we got cheated and this is very expensive, but never bother asking". And this is why a lot of stalls are taking advantage. But having listen to a talk by Prof. Dr. Ishak, from Sime Darby Corporate Culture Team, he shared that, this is all within our will to, simply, ASK. He said, "I know you guys ate the food, and the guy might be complaining that you taken a lot of mutton (which apparently is always taken by them), and all sort of reason. But the courtesy is still to ASK, to KNOW and to caution our RIGHTS".
Thus, in this scenario, don't be afraid to stand up, we are not picking up a fight, but just to ask and know, and if they usually charges that way, simply don't go and eat there anymore. But if not, you may stand in the chance of not paying that much.
As thus far, from
Contract Law, we have Doctrine of Stare Decisis,
Company Law, we have Doctrine of Separate Legal Entitiy
Insurance Law, we have Doctrine of Utmost Good Faith, and
in this context we have Doctrine of Caveat Emptor.
Taken from the Latin language, Caveat Emptor simply means ' Let the buyer Beware '.
How cool was that? But sound rather vague..but let me clarify some stuffs regarding it.
From Wikipedia explanation it goes like this,
"Under the doctrine of caveat emptor, the buyer could not recover from the seller for defects on the property that rendered the property unfit for ordinary purposes. The only exception was if the seller actively concealed latent defects or otherwise made material misrepresentations amounting to fraud. Before statutory law, the buyer had no warranty of the quality of goods. In many jurisdictions now, the law requires that goods must be of "merchantable quality". However, this implied warranty can be difficult to enforce and may not apply to all products. Hence, buyers are still advised to be cautious"
What does it mean is simply that, sellers should bear in mind the important elements of telling the truth. Of course, you and I know that in the real world, people will say that you won't earn money if you are telling the truth. But what let the buyer beware tells is that, the buyer should know the products and at some point, it is the seller's responsibility to ensure that the product is merchantable, or sell-able. This is essentially important, as many of us, can fall into a trap that this cases is actually a fraud or misrepresentation case. And as so many bad cases around the world, the only best method to counter this, is that, the buyer although guarded by this doctrine, should be smart and wise to choose and pick the right things, and know the right stuff.
And speculating on a small issue, let's put my name in this scenario, fictional but can happen.
Eric is eating in a Mamak Stall, and is having his sumptuous Nasi Kandar (wuallaa!). Having to savor his meal halfway, the waiter who served him earlier, walked to his side and wrote on the bill and placed it below the cup of his drink. Enjoying his food to the optimum, Eric did not flip the paper or bothered on the price? He is just too into the food. Great!!! And later after maximizing his marginal utility, he went to the counter wanting to pay before realising that the bill noted RM 15 ++.
Oh he goes, 'WOW, watha" and recalled what he just ate.
A plate of rice, with muttons and carry on top. No vege, no papadum, nothing extra. Just rice and mutton and curies. And what did he drink: Ice Tea.
In this situation, some people will just go, "S**t,we got cheated and this is very expensive, but never bother asking". And this is why a lot of stalls are taking advantage. But having listen to a talk by Prof. Dr. Ishak, from Sime Darby Corporate Culture Team, he shared that, this is all within our will to, simply, ASK. He said, "I know you guys ate the food, and the guy might be complaining that you taken a lot of mutton (which apparently is always taken by them), and all sort of reason. But the courtesy is still to ASK, to KNOW and to caution our RIGHTS".
Thus, in this scenario, don't be afraid to stand up, we are not picking up a fight, but just to ask and know, and if they usually charges that way, simply don't go and eat there anymore. But if not, you may stand in the chance of not paying that much.
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