Insights / Updates

Stay up to date with legal developments in Malaysia.

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Shariah Advisory Council: Judicial Body or Statutory Expert?

The Federal Court judgment of JRI Resources Sdn. Bhd. v Kuwait Finance House (Malaysia) Bhd., issued on 10 April 2019, considered the constitutionality and the validity a ruling issued by the Shariah Advisory Council ("SAC") pursuant to a reference by the High Court. The question that arose was whether Sections 56 and 57 of the Central Bank of Malaysia Act 2009 ("CBMA"), which compelled the court or arbitrator to refer a dispute relating to Islamic finance to the SAC, whereupon any ruling of the SAC on the same, would be binding on that court or arbitrator, had the effect of usurping judicial power such that the judge was prevented from determining the issue and the parties' rights and liabilities at hand. In this article, we unravel the premise of the judgement, which sets the boundaries for judicial power and recognises whether the SAC emulated such power when it ascertains Islamic law in relation to Islamic finance and issues a ruling that is binding upon courts or arbitrators.

High Court Decision in Dr Fong's Case: Registrations under Section 6 and Section 54 of the Franchise Act 1998

The recent High Court decision in Dr HK Fong BrainBuilder Pte Ltd v SG-Maths Sdn Bhd & Ors has brought about important changes to the franchise industry under the Franchise Act 1998, in particular on foreign franchisors. This client update considers the impact and significance of the case.

Digital Tax on Foreign Digital Service Providers to be Enforced from 1 January 2020

The Government of Malaysia will impose a digital service tax of 6% on foreign digital service providers with effect from 1 January 2020, with the annual threshold being set at RM500,000, according to the Malaysian Deputy Finance Minister after the tabling of the Service Tax (Amendment) Bill 2019 (the "Amendment Bill") on 8 April 2019. The Amendment Bill was subsequently amended and passed by the lower house of the Malaysian Parliament. Upon the Amendment Bill being passed by the upper house of Parliament and receiving the royal assent, foreign digital service providers such as Spotify and Netflix will be taxed commencing 1 January 2020.