09/06/2025

BIZ & FINANCE MONDAY | JUNE 9, 2025

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Independent director – employee or consultant? A RE independent directors’ employ ees of the company, or are they con sultants providing services to the company? The treatments for e-invoicing, service income tax, and in particular, the monthly deduction of tax (MTD), the independent director should not be subject to any MTD as he is not an employee of the company.

Muted demand on local rubber market forecast KUALA LUMPUR: The local rubber market is expected to experience muted demand this week due to global economic uncertainties following the “hanging” US tariffs, which are still on a 90-day pause. Industry expert Denis Low said the on and-off-again nature of US tariffs has upended global trade and roiled financial markets, leaving caution among traders. “The prevailing sentiment will affect the demand for most commodities, including rubber. Any transaction will mostly be based on a locked-in contract and as replenishment only,” he told Bernama. Therefore, Low expects the rubber market to remain relatively quiet, moving sideways with a bias towards lower prices. “Exchange rates are volatile, and with such huge swings on a daily basis, businesses are left in much limbo as to whether to hedge or to lose in a wild swing. Remember that there is also a cost when hedging,” he added. Meanwhile, the Malaysian Rubber Glove Manufacturers Association said the rubber market is expected to trade in a mixed trend this week as US-China trade talks and nego tiations are ongoing. “However, rubber prices will be influenced by the disrupted natural rubber (NR) supply in major producing countries due to the wet weather season, as well as the regional rubber futures markets,” the association said. For the week just ended, the Kuala Lumpur rubber market traded mixed. On a week-to-week basis, the Malaysian Rubber Board’s reference price for SMR 20 fell by 7.5 sen to 691.0 sen per kg, while latex in bulk decreased by 19 sen to 601.5 sen per kg. IP ServerOne’s NovaGPU enables SMEs to harness AI quickly, affordably PETALING JAYA IP ServerOne, a Malaysian cloud service provider, has launched NovaGPU, a GPU-as-a-Service (GPUaaS) platform designed to help SMEs embrace artificial intelligence (AI) – on their terms. Put simply, NovaGPU is like renting powerful computer brains from the internet whenever you need them. These “brains” are known as GPUs (graphics processing units) and they are the same kind of high-speed chips used in big AI projects, video rendering, and scientific research. Normally, buying these machines would cost businesses hundreds of thousands of ringgit. Whether you are developing a smart chatbot, analysing business data or testing new ideas, NovaGPU gives you the computing power to do it quickly and affordably. “Think of AI like hiring a new smart assistant,”says CL Lee, managing director of IP ServerOne. “The better your instructions and tools, the better your results. NovaGPU acts as a stepping stone for businesses to try AI – at a fraction of the traditional cost.” With NovaGPU, SMEs can access high performance GPUs – such as NVIDIA RTX 3090, RTX 4090 and H200 NVL – directly from the cloud, use them and pay by the hour, starting from as low as RM1.96 for 60 minutes. NovaGPU removes the most common barriers by giving SMEs the power to explore, test and deploy AI tools without the need to invest in expensive infrastructure and manage hardware, and with no long-term commitments.

invoices to the companies they serve for their director fees and allowances. They will also need to register for service tax and impose a service tax of 8% on their services provided. Deciding when the RM500,000 threshold is exceeded is based on reviewing your past 12 months and based on your forecast for the next 12 months. The time at which you register is not based on any tax year, but it is based on a 12-month “rolling basis”. For e-invoicing purposes, the threshold of exemption has recently increased to RM500,000. This threshold is calculated based on the calendar year. The 2022 revenues are used as a starting point to decide whether the independent director should issue e-invoices. However, if the independent director in the subsequent years exceeds the RM500,000 threshold, then, depending on the level of income, e-invoicing has to commence. If, for example, the income from director fees is more than RM500,000 but less than RM1 million in calendar year 2025, it appears that you need to start e-invoicing from July 1, 2026. If you are still in doubt, it is best to seek a written view or a confirmation from the IRB and the Royal Malaysian Customs Department to avoid any future disputes with both authorities. This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com).

What is happening in practice? In majority of the cases, companies are applying MTD to director fees and allowances received by independent directors. This is incorrect because indepen dent directors are not employees receiving remuneration from companies for exercising employ ment. The correct approach should be for the Inland Revenue Board (IRB) to collect advance taxes through the bimonthly deduction mechanism using the CP500 approach instead of deduction through MTD. Independent directors who have a contract for services with companies should file their tax returns using Form B which is meant for individuals carrying on a business, and the filing deadline for such forms is June 30 every year, but the IRB normally grants a grace period up to July 15 to submit Form B. Directors who have a contract of service are treated as employees, and their income will be subject to MTD, and they need to file a Form BE by April 30 every year, but there is a grace period of up to May 15. Independent directors whose income exceeds RM500,000 annually need to issue e

tax and income tax will be dependent on the answer to this question. At the moment, the treatments adopted e invoicing, service tax and income tax do not seem to be aligned. The common thread running across the treatments of e invoicing, service tax and income tax is whether the independent director is an employee or a consultant. This will be based on whether the director has entered into a contract of service or a contract for service with the company. There is no definition of either of the terms in the literature surrounding the above matter. The general understanding from case laws is that contract of service denotes that there is an employee-employer relationship, while a contract for service is for a consultant carrying on his profession or business. For e-invoicing purposes and service tax purposes, an independent director will be engaged under a contract for service since he will be providing independent views and expert opinion to the board of directors. Effectively, he is earning income as a consultant – therefore it is treated as business income. If this line of thinking is adopted for

The contracts from TMG Mart set an important precedent for Meta Bright’s future growth in the energy efficiency space. – META BRIGHT PIC

Meta Bright clinches TMG Mart energy efficiency deals PETALING JAYA: Main Market-listed diversified conglomerate Meta Bright Group Bhd’s wholly owned subsidiary FBO Land (Serendah) Sdn Bhd (FLSSB) has secured energy efficiency zero capex contracts from TMG Mart Sdn Bhd, a grocery and supermarket operator under the Tunas Manja Group. sumption in heating, ventilation and air conditioning systems, pumps and compressors. The energy efficiency zero capex initiative is structured under an energy performance contract (EPC) model, offering TMG Mart significant energy cost savings without upfront capital investment. Savings generated from the system will be shared with 80% accruing to FLSSB and 20% to TMG Mart over a 12-year period. retailer in Malaysia, operates over 100 outlets nationwide. “With this initial success, we are confident in replicating our EE solutions across TMG Mart’s broader network and other supermarket chains, positioning Meta Bright as a competitive provider of innovative, cost-effective energy efficiency solutions,” Phang said .

The contracts involve implementing an energy efficiency system – Demand Control Drive (DCD) – at two TMG Mart locations TMG Mall Bandar Indera Mahkota and TMG Mall Tanjung Lumpur in Kuantan, Pahang. This marks a significant milestone for Meta Bright, representing its inaugural self developed energy efficiency contracts following its memorandum of understanding with Tunas Manja Sdn Bhd signed in November 2024. Under the terms of the agreements, FLSSB will develop, design, finance, install, com mission, operate and maintain the DCD systems, which optimise electrical con

The energy eficiency zero capex projects are anticipated to positively contribute to Meta Bright’s earnings over the 12-year tenure, strengthening its recurring revenue base. The group remains strategically positioned to capitalise on Malaysia’s growing demand for sustainable energy solutions. “We view these contracts as stepping stones that solidify our capabilities and reputation in the energy efficiency sector. Our performance and track record from these initial projects will serve as strong references to secure larger opportunities in the future,” Phang concluded.

Meta Bright corporate and strategic planning executive director Derek Phang Kiew Lim said, “Winning these contracts marks a meaningful achievement for Meta Bright, as they represent our very first self-secured EE projects following the strategic partnership we established with Tunas Manja Group last year. These small but significant contracts set an important precedent for our future growth in the energy efficiency space, particularly among supermarket chains and retail businesses.” TMG Mart, established in 1986, is a grocery