28/07/2025

BIZ & FINANCE MONDAY | JULY 28, 2025

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How are clubs, associations and trade bodies taxed?

Bursa recognised as one of top 50 PLCs in Asean, among top 5 in Malaysia PETALING JAYA: Bursa Malaysia Bhd was recognised as one of the Top 50 Asean Public Listed Companies and among the Top 5 PLCs in Malaysia at the recent Asean Corporate Governance Awards hosted by the Minority Shareholders Watch Group, the domestic ranking body for Malaysia, and officiated by Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz. The Asean Corporate Governance Awards recognises Asean PLCs that demonstrate excellence in governance, based on the rigorous 2024 Asean Corporate Governance Scorecard (ACGS) Regional Assessment. The ACGS is a regional initiative under the Asean Capital Markets Forum, developed in colla boration with the Asian Development Bank, to assess, enhance, and promote corporate governance among PLCs across six participating Asean countries. The ACGS is conducted biennially, recog nising top-performing PLCs that demonstrate strong governance frameworks and practices in line with international standards, with a focus on transparency, accountability and board effectiveness. Bursa Malaysia CEO Datuk Fad’l Mohamed said: “We are honoured to be recognised once again at the Asean Corporate Governance Awards, which reflects our enduring leader ship and commitment in upholding the highest standards of governance, trans parency, and accountability. Strong corporate governance is the bedrock of a resilient and trusted capital market. Hence, Bursa Malaysia invariably actively champions governance excellence – both within the exchange, and across our ecosystem – as a key foundation for investor confidence and sustainable economic growth.”

C LUBS, associations and trade bod ies/associations are distinguished from business enterprises, and the prime differentiator is that making profit is not the main objec tive of clubs, associations and trade groups. These bodies of people enjoy beneficial treat ment in the taxation of their income. Clubs and similar asso ciations are formed by a group of people who come together with a shared interest, activity or goal, and they are typically for social or recreational purposes. They are not formed for commercial purposes. They can also be formed for pursuing science, literature or other leisure pursuits for the interests and benefits of their members. The fine distinguishing factor that separates a trade association from a club is that a trade association is formed by members who carry on business, and their main objective is to safeguard and promote the business of its members. How are clubs and associations taxed? Examples of a club or a similar association will include recreational clubs, academic clubs, literature clubs, management corporations in an apartment block, etc. The club or association is established and owned by its members for the benefit of its members. All assets belong to the members of the club who will also control all the dealings of the club. Any surplus of receipts CIM said in a statement that the new plant exemplifies its commitment to quality, sustain ability and the advancement of its operations through modern, circular production methods. In a strategic shift from molasses to corn as its primary feedstock, CIM now produces ethanol through natural fermentation and distillation using high-quality corn. A key byproduct of this process – distiller’s dried grains with solubles (DDGS) – is repur-posed into high-value livestock feed, reinforcing CIM’s adoption of circular economy principles. This makes CIM the first manufacturer and supplier of locally produced DDGS in Malaysia, supporting food security and sustainable agriculture. Malaysia Investment Development Authority (Mida) CEO Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid said, “The launch of Chemical Industries (Malaya)’s corn-based ethanol facility, exemplifies how circular economy principles can be turned into real economic value, optimising agricultural resources while creating new, high impact downstream industries such as DDGS for livestock feed. It strengthens Malaysia’s bio based value chain, reduces import depen dencies, and opens new frontiers for sustainable industrial growth. “At Mida, we welcome such practical investments that support our vision of building a more sustainable manufacturing sector while creating valuable opportunities for our agri cultural communities.” InvestPerak CEO Mohamad Hashim said, “Chemical Industries (Malaya) has had a long

members can be carried forward.

over the expenditure in respect of the income from the transactions with the members must be used for the benefit of the members. However, when a club or asso ciation earns income from its facilities or services provided to non-members on a commercial basis, such income will be taxable from trading with non-members. Apportionment of expenses and claims for tax depreciation or allowances must be segregated between the income from transactions with members and non-members. Wherever the expenses can be specifically allocated, there is no need for apportionment. Income from investments and external sources such as interest and rent will be taxable. Other income from external parties operating restaurants or gymnasiums within the club’s premises will also be taxable. Voluntary gifts from the public will also be taxable. However, gifts from the members which are intended to be used for the benefit of the members should not be taxable. The taxable income of clubs, associations and trade associations are taxed at the same rates which are applicable to individuals. However, they are not entitled to any personal reliefs which are applicable to individuals. The losses generated from transactions with members cannot be offset against income from transactions with non members and cannot be carried forward. The unused losses and capital allowances generated from transactions with non

How are trade associations taxed? All income received by trade associations, except for subscription fees from members, are subject to tax regardless of whether the income is received from members or non members. Similar to clubs and associations, there will be an apportionment of expenses and capital allowances between the taxable income and non-taxable income. The tax rates applicable to trade asso ciations are also similar to taxation of individuals following the scaled rates without any tax reliefs. Where is the dividing line? Associations formed by trade enterprises can also qualify as a club or association provided such associations organise themselves with the prime objective of working for the benefit of its members, and the association is established and owned by its members for the benefit of its members without a commercial objective of achieving profits. In order to fall within this category, the association should not safeguard or promote the business of its members. The issue of whether an association is a trade association or otherwise is not dependent on its name, but rather on the conduct of the association. This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com).

Hexza subsidiary launches corn-based ethanol plant in Ipoh PETALING JAYA: Chemical Industries (Malaya) Sdn Bhd (CIM), a subsidiary of listed Hexza Corporation Bhd, on Friday inaugurated a state of-the-art corn-based ethanol production facility in Persiaran Tasek, Ipoh, marking a significant milestone in the company’s growth and inno vation journey.

The inauguration of Chemical Industries (Malaya)’s corn-based ethanol production facility marks a significant milestone in the company’s growth and innovation journey.

governance standards in mind, focusing on minimal waste, responsible sourcing and reinvestment into the local community to ensure long-term sustainable development. CIM has a rich legacy as Malaysia’s first ethanol producer, having started operations in 1962. It offers a wide range of ethanol products, from 96% to absolute ethanol, meeting the needs of diverse ethanol end-users. Its product portfolio also includes natural vinegar.

the state’s industrial growth, job creation and advancement of a circular economy.” Hexza Corporation executive director Foong Leon Chiew said the corn-based ethanol plant is an important milestone and strategic invest ment for CIM as it reinforces their position as the leading producer and supplier of ethanol and DDGS in Malaysia, and their strong commitment to sustainable production. CIM’s new facility is designed with high environmental, social and

standing presence in Perak and we are pleased to witness their continued confidence in the state through this latest expansion into corn based ethanol production. This new facility not only reflects CIM’s commitment to innovation and sustainability but also reinforces Perak’s position as a preferred destination for high-value and future-ready investments. The launch of this plant signifies how strategic investments in bio based industries can contribute meaningfully to