PR/PO Process Flow by Jace Cheah Revised on 23/1/15

PR/PO Procedures: Requestor to raise purchase requisition form (PR) to get approval before purchasing any items or services. Oversea vendor subjected to WHT: submit to finsr@jobstreet.com For purchases > RM 3k, requestor need to obtain at least 3 quotations for comparison prior to decide the final vendor. Relevant signatories(according to threshold) either approve or reject the purchase requisition. If approve, requestor to raise purchase order form (PO) to get approval for purchase items/services. Authorised PO signatories - either approve or reject the purchasing request. If approve, proceed to purchase items/services. Requestor must verify that the items purchased has been received / services has been completely rendered. Requestor must send the related documents such as PR, PO, invoice and delivery order to finance for further actions.

PR/PO Process Flow NO YES NO YES -Requestor raise purchase requisition form (PR) LOA Approvers Purchases > RM 3K, requestor need to obtain at least 3 quotations for comparison NO End YES Requestor raise purchase order form (PO) PO Authorised Approvers NO YES Requestor must send the original related documents such as PR, PO, invoice and delivery order to Finance PG for further action Requestor must verify on the invoice that items are received / services are completely rendered Proceed to purchase items/services

PR/PO (specimen):

VO (specimen):

Income Tax Act, 1967 (WHT): Payment Type Withholding Tax Rate Details Royalty 10% Section 109 (1) Where any person (in this section referred to as the payer) is liable to pay interest or royalty derived from Malaysia to any other person not known to him to be resident in Malaysia, other than interest or royalty attributable to a business carried on by such other person in Malaysia, he shall upon paying or crediting the interest (other than interest on an approved loan or long-term loan or interest of the kind referred to in paragraph 33, 33A, 33B, 35 or 35A of Part I, Schedule   6) or royalty deduct there from tax at the rate applicable to such interest or royalty, and (whether or not that tax is so deducted) shall within one month after paying or crediting the interest or royalty render an account and pay the amount of that tax to the Director General. The gross amount of royalty paid to a NR payee is subject to withholding tax at 10% (or any other rate as prescribed under the Double Taxation Agreement between Malaysia and the country where the NR payee is tax resident). This is a final tax Section 2 Royalty is defined as: (a) Any sums paid as consideration for the use of or the right to use: (i)Copyrights, artistic or scientific works, patents, designs or models, plans, secret processes or formulae, trademarks or tapes for radio or television broadcasting, motion picture films, films or video tapes or other means of reproduction where such films or tapes have been or are to be used or reproduced in Malaysia or other like property or rights. (ii)Know-how or information concerning technical, industrial, commercial or scientific knowledge, experience or skill. (b)Income derived from the alienation of any property, know-how or information mentioned in above paragraph of this definition. Royalty deemed derived from Malaysia if: -Responsibility for payment lies with the Government or a State Government; -Responsibility for payment lies with a resident of Malaysia; -The royalty is charged as an outgoing or expense against any income accruing in or derived from Malaysia. *Special classes of income: Technical fees, payment for services, rent/payment for use of moveable property Section 109B (1) Where any person (in this section referred to as "the payer") is liable to make payments to a non-resident- (a) for services rendered by the non-resident person or his employee in connection with the use of property or rights belonging to, or the installation or operation of any plant, machinery or other apparatus purchased from, such non-resident; (b) for technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme; or (c) for rent or other payments made under any agreement or arrangement for the use of any moveable property, *Refer below Public Ruling 4/2005 on Section 4A of ITA

* Note : Public Ruling 4/2005 on Section 4A of ITA Withholding Tax Rate Income Tax Act 1967 Public Ruling 4/2005 Section 4A(i) Services rendered in connection with the use or installation or operation of assets 10% Section 109B 6.1 Paragraph 4A(i) of the ITA consists of amounts paid in consideration of services which are performed in Malaysia, rendered by a non-resident person or his employee, in connection with: (a) the use of property or rights belonging to the non-resident person; or (b) the installation or operation of any plant, machinery or other apparatus purchased from him. Section 4A(ii) Technical advice, assistance or services rendered in connection with technical management or administration 7.3 Technical advice, assistance or services rendered in connection with technical management of any scientific, industrial or commercial undertaking, venture, project or scheme would include the passing over or utilisation of expert or specialised knowledge, skills or expertise. Examples of technical management would include the provision of marketing, consultancy and legal services, supply of technical and software personnel and inter-company technical services. 7.4 Administration would cover management or administrative services in connection with any scientific, industrial or commercial undertaking, venture, project or scheme. Examples of administration would include non-technical assistance, non-technical services, management and administrative functions such as planning, direction, control, co-ordination, accounting, financial management consultation and labour negotiations. Section 4A(iii) Rental or other payment for the use of movable property 8.1 Paragraph 4A(iii) of the ITA consists of rents or other payments made for the use of any moveable property belonging to the non-resident person which include rents or other payments made for the use of oil rigs, boats, ships, cars, aircraft or other equipment. Reimbursement & Disbursement (part of the contract value for services rendered or for rent or payments made for the use of moveable property. As such, it is income of the payee under section 4A of the ITA) 9.1 Reimbursements refer to disbursements or out-of-pocket expenses incurred by the payee - • in the course of rendering services to the payer; or • in respect of the use of any moveable property, and are subsequently reimbursed by the payer. Such expenses include the cost of airfare, travelling, telephone and photocopying charges. 10.1 Disbursements or out-of-pocket expenses are expenses incurred by the payer and paid to a third party on behalf of the payee - • in connection with services rendered by the payee; or • in respect of the use of any moveable property,

Interest (except exempt interest) paid by approved financial institutions 5% Section 109C (1) Where any person (in this section referred to as "the payer") is, liable to pay interest (other than interest exempt from tax under this Act or any order made thereto) accruing in or derived from Malaysia to an individual resident in Malaysia, he shall upon paying or crediting such interest deduct there from tax at the rate applicable to such interest, and (whether or not that tax is so deducted) shall within one month after paying or crediting the interest render an account and pay the amount of that tax to the Director General (4) In this section "person" refers to a bank or finance company licensed under the Banking and Finance Institutions Act 1989 or the Islamic Banking Act 1983, a registered co-operative society, Bank Simpanan Nasional, Bank Pertanian Malaysia, Lembaga Urusan dan Tabung Haji, Malaysia Building Society Berhad, or any other institution that may be approved by the Minister - Real Estate Investment Trust (REIT) (i) Other than a resident company (ii) Non Resident company. (iii) Foreign investment institution effective from 01/01/2007 10% 25% 10% Section 109D (1) This section shall only apply to income of a unit trust which is exempt under section 61A. (2) Where a unit trust (in this section referred to as the payer) distributes income to a non-resident unit holder which is deemed to be derived from Malaysia, the payer shall upon distributing the income, deduct there from tax at the rate applicable to such income and shall within one month after distributing such income, render an account and pay the amount of that tax to the Director General Section 61A. (1) Where in the basis period for a year of assessment 90% or more of the total income of the unit trust is distributed to the unit holder, the total income of the unit trust for that year of assessment shall be exempt from tax.

Income under Section 4(f) ITA 1967 Family Fund/Takaful Family Fund/Dana Am (i) Individual and other (ii) Non Resident Company 8% 25% Section 109E (1) This section shall only apply to profits distributed or credited out of family fund, family re-takaful fund or general fund under section 60AA. (2) Where a takaful operator (in this section referred to as "the payer") distributes or credits any amount of income to a participant other than participant which is a resident company which is deemed to be derived from Malaysia, the payer shall upon distributing or crediting the amount- (a) deduct from the proportion of that amount, tax at the rate applicable to that proportion; and (b) whether or not that tax is so deducted, within one month after distributing or crediting such amount, render an account and pay the amount of tax to the Director General.   Income under Section 4(f) ITA 1967 10% Section 109F (1) Where any person (in this section referred to as “the payer”) is liable to make payments to a non-resident in relation to any gains or profits falling under paragraph 4(f) which is derived from Malaysia, he shall upon paying or crediting such payments deduct there from tax at the rate applicable to such payments, and (whether or not that tax is so deducted) shall within one month after paying or crediting such payments render an account and pay the amount of that tax to the Director General Example: commission, guarantee fee, agency commission Public Ruling 1/2010 4.4 Profits that arise to a non-resident person from an activity which is outside the ordinary trade or vocation but which is nevertheless a profit or income item accruing would be included as income falling under paragraph 4(f) of the ITA if it does not fall under paragraphs 4(a) to 4(e) and section 4A of the ITA. Section 4 (a) to 4 (e) 4.Subject to this Act, the income upon which tax is chargeable under this Act is income in respect of- (a) gains or profits from a business, for whatever period of time carried on; (b) gains or profits from an employment; (c) dividends, interest or discounts; (d) rents, royalties or premiums; (e) pensions, annuities or other periodical payments not falling under any of the foregoing paragraphs;

Q&A 1. Q: During the PO review; if there is any changes required to the PO due to any reasons, is the requestor allowed to make changes ? or has to re-submit a new one? A: No changes allowed after PO has been approved. 2. Q: Is there any documentation required for the requestor to submit to finance to prove that s/he has verified the items received/services already rendered? A: Yes. To get finance to stamp the company chop and receiver to endorse completion of items receive/services rendered. 3. Q: Can requestor get the PR approval via email? A: Yes. Kindly attach the approval email together with the original PR. 4. Q: Can the PR & PO approver be the same person? A: No. Need to get other PO signatories to approve. 5. Q: What are the types of items or services that need PR? A: All services/items except those with signed/approved agreements, utilities (electricity, water, telephone, internet), business license, quit rent & assessment ,office cleaning, courier charges, casual wages, Indah Water and newspaper.

Q&A 6. Q: What should requestor do if there is an addition or deletion of items/services in PR? A: Requestor need to raise variation order (VO) for the addition or deletion of items/services. 7. Q: Where can I obtain the forms? A: Forms can be extracted from URL: http://int.jobstreet.com/static/office_doc/default.htm 8. Q: Can I proceed to purchase prior approve PR & PO?      A: You may run the risk of no payment. 9.Q: Do I need to raise PR & PO for online purchase?       A: Yes, PR & PO is needed. PR/PO are approvals, whilst online purchase is a payment mode. 10.Q: Can I purchase and claim via petty cash?     A: No. If any exceptions eg. For inevitable urgency, etc (and subject to Petty Cash policy) is required, please seek prior approval from FM/assigned person together with justified reason.   11.Q: What is company credit term?        A: 30 days credit term upon completion of job or upon receipt of complete documents by finance whichever is later.

Q&A 12. Q: Can requestor collect cheque on behalf of vendor? A: No. Cheque will be posted directly to vendor.

Thank you