Commencement of amendments to the Income Tax Act 1967
(1) Except for sections 4, 5, 6, 7, 8, 10, 11, 12, 13, 15, 16, 18 and paragraph 19(h) the provisions of this Chapter shall have effect for the year of assessment 1987 and subsequent years of assessment:
Provided that paragraphs 9(c) and (e) shall cease to have effect from—
(i) year of assessment 1988 where the gross premiums receivable by the insurer during the basis period for year of assessment 1986 on account of all Malaysian life policies in force at the end of that period, amount to fifty million ringgit or more;
(ii) year of assessment 1990 where the gross premiums receivable by the insurer during the basis period for year of assessment 1986 on account of all Malaysian life policies in force at the end of that period, amount to ten million ringgit or more but less than fifty million ringgit; and
(iii) year of assessment 1992 where the gross premiums receivable by the insurer during the basis period for year of assessment 1986 on account of all Malaysian life policies in force at the end of that period, is less than ten million ringgit.
(2) Sections 5, 7 and 12 shall be deemed to have come into force on 21 October 1983.
(3) Sections 4, 6, 10, 11, 13, 15 and 18 shall be deemed to have come into force on 24 October 1986.
††NOTE—The Stamp Ordinance (Sabah) [Sabah Cap. 137] has since been wholly repealed except for section 83 by the Stamp (Amendment and Extension) Act 1989 [Act A723]–see the Schedule of Act A723.
(4) Section 8 shall be deemed to have come into force on 1 January 1986.
(5) Section 16 shall be deemed to have effect from the year of assessment 1984.
(6) Paragraph 19(h) shall have effect for the year of assessment 1988 and subsequent years of assessment.
Amendment of section 2
Section 2 of the Income Tax Act 1967, which in this Chapter is referred to as “the principal Act”, is amended by substituting for the interpretation of “approved loan” in subsection (1) the following:
‘ “approved loan” means—
(a) any loan or credit made to the Government, State Government (including any loan or credit made to a person other than the Government or State Government where the loan or credit is guaranteed by the Government or State Government), local authority or statutory body; or
(b) any loan or credit other than a loan or credit of the kind specified in paragraph (a), made to a person where the amount of such loan or credit exceeds two hundred and fifty million ringgit,
by a person not resident in Malaysia:
Provided that—
(i) the loan or credit has been approved by the Minister of Finance; and
(ii) the loan or credit agreement was executed in Malaysia or where the loan or credit agreement with the prior approval of the Minister was executed outside Malaysia;’.
Amendment of section 4A
Section 4 A of the principal Act is amended by inserting immediately after the words “film rentals” the words “where the
duty is leviable under the Cinematograph Film Hire Duty Act 1965” in paragraph (iii).
Amendment of section 15
Section 15 of the principal Act is amended by substituting for paragraph (c) the following: “(c) if the interest or royalty is charged as an out-going or expense against any income accruing in or derived from Malaysia.”.
Amendment of section 15A
Section 15A of the principal Act is amended by inserting immediately after the words “film rentals” the words “where the duty is leviable under the Cinematograph Film Hire Duty Act 1965” in paragraph (c).
Amendment of section 44
The interpretation of “institution” in subsection 44(7) of the principal Act is amended—
(a) by deleting the word “or” at the end of paragraph (c);
(b) by inserting the word “or” at the end of paragraph (d); and
(c) by inserting after paragraph (d) the following new paragraph (e):
“(e) a Government-assisted institution engaged in socio-economic research;”.
Amendment of section 60
Section 60 of the principal Act is amended—
(a) by deleting the word “and” at the end of subparagraph
(3)(b)(i);
(b) by substituting for subparagraph (3)(b)(ii) the following new subparagraph (ii):
“(ii) an amount bearing the same proportion to the management expenses incurred during that period in connection with his life business as the aggregate mentioned in paragraph (a) bears to the total of that aggregate and the amount of gross premiums received by him during that period on account of all life policies in force at the end of that period; and”;
(c) by inserting after subparagraph (3)(b)(ii) the following new subparagraph (iii): “(iii) commissions paid in that period in connection with that business.”;
(d) by substituting for subparagraphs (4)(b)(i) and (ii) the following new subparagraphs (i) and (ii): “(i) an amount bearing the same proportion to the management expenses incurred during that period in connection with the insurer’s Malaysian life fund or in connection with that part of his life business which is carried on in Malaysia as the aggregate mentioned in paragraph (a) bears to the total of that aggregate and the amount of gross premiums received by him during that period on account of Malaysian life policies in force at the end of that period;
(ii) an amount bearing the same proportion to the head office expenses of the insurer incurred during that period in connection with his life business as the aggregate mentioned in paragraph (a) bears to the aggregate of the amount of gross income for that period from the investments out of the insurer’s life fund, the amount of gross proceeds receivable in that period in connection with the realization of those investments or any rights arising from them and the amount of gross premiums received by him during that period on account of all life policies in force at the end of that period; and”; and
(e) by inserting after subparagraph (4)(b)(ii) the following new subparagraph (iii): “(iii) commissions paid in that period in connection with the insurer’s life business which is carried on in Malaysia.”.
Amendment of section 107A
Section 107A of the principal Act is amended by deleting the words “, not being a payment that is a royalty within the meaning of subsection 2(1)” in the interpretation of “contract payment” in subsection (5).
Amendment of section 109
Section 109 of the principal Act is amended by substituting for the words “or to have a place of business in Malaysia” the words “in Malaysia, other than interest or royalty attributable to a business carried on by such other person in Malaysia” in subsection
(1).
Amendment of section 109B
Section 109B of the principal Act is amended by inserting immediately after the words “film rentals” the words “where the duty is leviable under the Cinematograph Film Hire Duty Act 1965” in paragraph (1)(c).
Amendment of section 120
Section 120 of the principal Act is amended—
(a) by deleting the word “or” at the end of paragraph (c);
(b) by substituting for the comma the sign and word “; or” at the end of paragraph (d); and
(c) by inserting after paragraph (d) the following new paragraph
(e): “(e) fails to comply with a direction given under section 107,”.
Amendment of section 128
Section 128 of the principal Act is amended by substituting for subsection (1) the following new subsection (1): “(1) Subject to this section, where an individual who is the owner of a residence occupies the residence as owner throughout the basis period for a year of assessment (that period and that year being referred to in this section as the relevant period and
the relevant year respectively) or during any part of the relevant period, his gross income from the occupation for the relevant period or for that part of the relevant period, as the case may be, shall be disregarded for the purposes of this Act.”.
Amendment of section 153
Section 153 of the principal Act is amended—
(a) by substituting for the words “in paragraph 15 of Schedule 5” the words “in this section” in subsection (1);
(b) by inserting after subsection (2) the following new subsections (3), (4), (5), (6) and (7): “(3) For the purposes of this Act— “accountant” means—
(a) a professional accountant authorized by or under any written law to be an auditor of companies;
(b) any other professional accountant approved by the Minister; or
(c) any other person approved by the Minister on the recommendation of the Director General.
(4) An application for an approval under paragraph (3)(b) or
(c) or for a renewal of such approval shall be made to the Minister.
(5) A fee as may be prescribed by the Minister by an order published in the Gazette shall be paid on the application for an approval or renewal of an approval under subsection (4).
(6) An approval or renewal of an approval under this section shall be valid for a period of twenty-four months beginning from the date of such approval or renewal.
(7) An approval granted by the Minister before 24 October 1986 shall lapse on 31 December 1987 unless a renewal of such approval is obtained under this section by that date.”.
Amendment of Schedule 1
Part V of Schedule 1 to the principal Act is amended by inserting immediately after the words “film rentals” the words “where the duty is leviable under the Cinematograph Film Hire Duty Act 1965” in paragraph (iii).
Amendment of Schedule 3
Schedule 3 to the principal Act is amended by substituting for the words “qualifying plantation expenditure” the words “qualifying agriculture expenditure” in paragraph 6(b).
Amendment of Schedule 5
Schedule 5 to the principal Act is amended by deleting the interpretation of “accountant” in paragraph 15.
Amendment of Schedule 6
Schedule 6 to the principal Act is amended—
(a) by deleting paragraph 11;
(b) by substituting for the proviso to paragraph 13 the following new proviso: “Provided that—
(a) where a business is carried on by any such institution, trust body or body of persons, the income from the business shall be exempt from tax only if it is applied solely for charitable purposes and either—
(i) the business is carried on in the course of the actual carrying out of a primary purpose of the institution, trust or body of persons; or
(ii) the work in connection with the business is mainly carried on by persons for whose benefit the institution, trust or body of persons was established;
(b) the exemption under this paragraph shall not apply to income consisting of a dividend.”;
(c) by substituting for the word “two” the word “four” in paragraph 15(1)(b);
(d) by substituting for the full stop a colon at the end of paragraph 17;
(e) by inserting after paragraph 17 the following new proviso: “Provided that the exemption under this paragraph shall not apply to income consisting of a dividend.”;
(f) by substituting for the full stop a colon at the end of paragraph 26;
(g) by inserting after paragraph 26 the following new proviso: “Provided that the exemption under this paragraph shall not apply to income consisting of a dividend.”; and
(h) by deleting Part II.
Amendment of Schedule 7 A
Schedule 7A to the principal Act is amended by substituting for paragraph 7 the following new paragraph 7: “7. This Schedule shall not apply to a company—
(a) for the period during which the company—
(i) has been granted pioneer status under the Promotion of Investments Act 1986 [Act 327] in respect of a promoted activity or promoted product and which is applying or intends to apply for the grant of a pioneer certificate; or
(ii) has been granted pioneer certificate under the Promotion of Investments Act 1986 in respect of a promoted activity or promoted product and whose tax relief period has not ended or ceased;
(b) for the period prescribed under paragraph 29(2)(b), (c) or (d) of the Promotion of Investments Act 1986 in respect of a promoted activity or promoted product for which the company has been granted approval under section 27 of that Act;
(c) for the year of assessment for which the company is given abatement of adjusted income under section 32, 33, 34 or 36 of the Promotion of Investments Act 1986; or
(d) for the period during which that company, notwithstanding the repeal of the Investment Incentives Act 1968—
(i) has been given approval under section 5, 12A or 12B of that Act and whose tax relief period has not ended; or
(ii) has been given approval under section 26 of that Act and incurs capital expenditure which qualifies for investment tax credit.”.
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
