Return of income by a person other than a company, trust body or co-operative society
(1) Every person, other than a company, trust body or cooperative society to which section 77A applies, shall for each year of assessment furnish to the Director General a return in the prescribed form—
(a) in the case of that person who is carrying on a business, not later than 30 June in the year following that year of assessment; or
(b) in any other case than the case in paragraph (a), not later than 30 April in the year following the year of assessment:
Provided that that person has—
(a) chargeable income for that year of assessment; or
(b) no chargeable income for that year of assessment, but has chargeable income or has furnished a return or has been required under this Act to furnish a return, for the year of assessment immediately preceding that year of assessment.
(1 A ) Where subsection 45(2) applies, a reference to a person under paragraph 1(a) includes a reference to an individual where his wife or her husband who elects, as the case may be, is carrying on a business.
(2) Where a person is required to furnish a return under paragraph (b) of the proviso to subsection (1), the Director General may by way of notification waive that requirement for any year of assessment.
(3) An individual who arrives in Malaysia during a particular year of assessment and—
(a) is chargeable to tax for that particular year; or
(b) is not chargeable to tax for that particular year but is chargeable to tax for the year of assessment following that particular year, shall, within two months of his arrival give notice to the Director General that he will be so chargeable.
(4) For the purposes of this section, a return for a year of assessment shall—
(a) specify the chargeable income and the amount of tax payable (if any) on that chargeable income for that year; and
(b) contain such particulars as may be required by the Director General.
Return of income by every company, trust body or co- operative society
(1) Every company, trust body or co-operative society shall for each year of assessment furnish to the Director General a return in the prescribed form within seven months from the date following the close of the accounting period which constitutes the basis period for the year of assessment.
(2) Notwithstanding subsection (1), where there is a change in the accounting period of a company, trust body or co-operative society such that the accounts are not closed on any date in a year, that company, trust body or co-operative society shall furnish to the Director General a return in the prescribed form for that year
and the year of assessment in which the accounts are closed within seven months from the date following the close of the accounting period.
(3) For the purposes of this section, a return for a year of assessment shall—
(a) specify the chargeable income and the amount of tax payable (if any) on that chargeable income for that year; and
(b) contain such particulars as may be required by the Director General.
Power to call for specific returns and production of books
For the purpose of obtaining full information for ascertaining whether or not a person is chargeable to tax or for determining his liability the Director General may by notice under his hand require that or any other person—
(a) to complete and deliver to the Director General within a time specified in the notice (not being less than thirty days from the date of service of the notice) any return specified in the notice;
(b) to attend personally before the Director General and produce for examination all books, accounts, returns and other documents which the Director General deems necessary;
(c) to make a return in accordance with paragraph (a) and also to attend in accordance with paragraph (b); or
(d) to provide in writing such information or particulars which the Director General deems necessary.
Power to call for statement of bank accounts, etc.
The Director General may by notice under his hand require any person to furnish within a time specified in the notice (not being less than thirty days from the date of service of the notice) a statement containing particulars of—
(a) all banking accounts—
(i) in his own name or in the name of a wife or dependent child of his or jointly in any such names;
(ii) in which he is or has been interested jointly or solely; or
(iii) on which he has or has had power to operate jointly or solely, being accounts which are in existence or have been in existence at any time during a period to be specified in the notice;
(b) all savings and loan accounts, deposits, building society accounts and co-operative society accounts in regard to which he has or has had any interest or power to operate solely or jointly during that period;
(c) all assets which he and any wife or dependent child of his possess or have possessed during that period;
(d) all sources of his and the gross income from those sources; and
(e) all facts bearing upon his present or past chargeability to tax.
Power of access to buildings and documents, etc.
(1) For the purposes of this Act the Director General shall at all times have full and free access to all lands, buildings and places and to all books and other documents and may search such lands, buildings and places and may inspect, copy or make extracts from any such books or documents without making any payment by way of fee or reward.
(1 A ) Where the Director General exercises his powers under subsection (1), the occupiers of such lands, buildings and places shall provide the Director General or an authorized officer with all reasonable facilities and assistance for the exercise of his powers under this section.
(2) The Director General may take possession of any books or documents to which he has access under subsection (1) where in his opinion—
(a) the inspection of them, the copying of them or the making of extracts from them cannot reasonably be undertaken without taking possession of them;
(b) they may be interfered with or destroyed unless he takes possession of them; or
(c) they may be needed as evidence in any legal proceedings instituted under or in connection with this Act.
(3) Where in the opinion of the Director General it is necessary for the purpose of ascertaining income in respect of the gains or profits from a business for any period to examine any books, accounts or records kept otherwise than in the national language, he may by notice under his hand require any person carrying on the business during that period to furnish within a time specified in the notice (not being less than thirty days from the date of service of the notice) a translation in the national language of the books, accounts or records in question:
Provided that in East Malaysia this subsection shall have effect as if the words “or English” were inserted after the words “national language” wherever they occur.
Power to call for information
The Director General may require any person to give orally or may by notice under his hand require any person to give in writing within a time specified in the notice all such information or particulars as may be demanded of him by the Director General for the purposes of this Act and which may be in the possession of that person:
Provided that, where that person is a public officer or an officer in the employment of a local authority or statutory authority, he shall not by virtue of this section be obliged to disclose any particulars as to which he is under a statutory obligation to observe secrecy.
Duty to keep records and give receipts
(1) Notwithstanding section 82 A and subject to this section, every person carrying on a business—
(a) shall keep and retain in safe custody sufficient records for a period of seven years from the end of the year to which any income from that business relates to enable that income from that business for each year of assessment or the adjusted loss from that business for the basis period for any year of assessment to be readily ascertained by the Director General or an authorized officer; and
(b) if the gross takings from the business for the basis year for any year of assessment exceeded one hundred and fifty thousand ringgit from the sale of goods or one hundred thousand ringgit from the performance of services, shall issue a printed receipt serially numbered for every sum received in that year of assessment in respect of goods sold or services performed in the course of or in connection with the business and shall retain a duplicate of every receipt so issued.
(1 A ) Where a person carrying on a business has not furnished a return under subsection 77(1), 77 A (1) or (2) for a year of assessment, that person shall keep and retain the records referred to in subsection (1) that relate to that year of assessment for a period of seven years after the end of the year in which the return is furnished.
(2) Where in the carrying on of a business a machine is used for recording sales, the issue of receipts pursuant to paragraph
(1)(b) may be dispensed with except where the Director General is not satisfied—
(a) that the machine automatically records all sales made; or
(b) that the total of all sales made in a day is transferred at the end of the day to a record of sales.
(3) The Director General may specify by statutory order in respect of any class or description of business (or by notice under his hand in respect of the business of any particular person)—
(a) the form of records to be kept under paragraph (1)(a) and the manner in which they shall be kept and retained; and
(b) the form of receipts to be issued and duplicate receipts to be retained under paragraph (1)(b) and the manner in which they shall be issued or retained.
(4) The Director General may waive all or any of the provisions of subsection (1) in respect of any business or records or any class or description of business or records.
(5) The Director General, if he is of the opinion that any accounts or records produced by any person to the Director General for the purpose of ascertaining the income of a person are insufficient or inadequate for that purpose, may by notice under his hand require that person to produce, in respect of any period or periods specified in the notice and within a time so specified (that time not being less than thirty days from the service of the notice), accounts audited by a professional accountant, together with a report made by that accountant which shall contain, in so far as they are relevant, the matters set out in subsections 174(1) and (2) of the Companies Act 1965.
(6) Any person who under subsection (1) is required to keep records shall cause appropriate entries to be made in those records in respect of transactions within sixty days of each transaction.
(7) Any person who is required by this section to keep records and—
(a) does so electronically shall retain them in an electronically readable form and shall keep the records in such a manner as to enable the records to be readily accessible and convertible into writing; or
(b) has originally kept records in a manual form and subsequently converts those records into an electronic form shall retain those records prior to the conversion in their original form.
(8) All records that relate to any business in Malaysia shall be kept and retained in Malaysia.
(9) For the purposes of this section, “records” include—
(a) books of account recording receipts and payments or income and expenditure;
(b) invoices, vouchers, receipts and such other documents as in the opinion of the Director General are necessary to verify the entries in any books of account; and
(c) any other records as may be specified by the Director General under subsection (3).
Duty to keep documents for ascertaining chargeable income and tax payable
(1) Subject to this section, every person who is required to furnish a return of his income for a year of assessment under this Act shall keep and retain in safe custody sufficient documents for a period of seven years from the end of that year of assessment for the purposes of ascertaining his chargeable income and tax payable.
(2) Where a person referred to in subsection (1) has not furnished a return as required under this Act for a year of assessment, that person shall keep and retain the documents referred to in subsection (1) that relate to that year of assessment for a period of seven years after the end of the year in which the return is furnished.
(3) The Director General may waive all or any of the provisions of subsection (1) in respect of any income or deductions.
(4) Any person who is required by this section to keep documents and—
(a) does so electronically shall retain them in an electronically readable form and shall keep the documents in such a manner as to enable the documents to be readily accessible and convertible into writing; or
(b) has originally kept documents in a manual form and subsequently converts those documents into an electronic form shall retain those documents prior to the conversion in their original form.
(5) All documents that relate to any income in Malaysia shall be kept and retained in Malaysia.
(6) For the purposes of this section, “documents” means—
(a) statement of income and expenditure; and
(b) invoices, vouchers, receipts and such other documents as are necessary to verify the particulars in a return.
Return by employer
(1) The Director General may by statutory order require every employer to prepare and deliver for any year specified in the order and within a time so specified a return in the prescribed form containing—
(a) the names and places of residence of such classes of persons employed by the employer as may be indicated in the order; and
(b) the full amount of the gross income falling within section 13 paid, payable or provided by or on behalf of the employer to those persons in respect of their employment.
(2) Where an employer commences to employ an individual who is or is likely to be chargeable to tax in respect of income in respect of gains or profits from the employment, the employer shall not later than one month thereafter give written notice to the Director General stating the full name and address of the individual and the terms and date of commencement of the employment.
(3) Where an employer is about to cease to employ an individual who is or is likely to be chargeable to tax in respect of income in respect of gains or profits from the employment, the employer shall not less than one month before the cessation give written notice thereof to the Director General stating the full name and address of the individual and the expected date of cessation:
Provided that, where he is satisfied that it is reasonable to do so in the circumstances, the Director General may accept for the purposes of this subsection a notice given less than one month before the cessation or a notice given on or after the cessation:
Provided further that an employer shall not be required to give the written notice under this subsection in respect of an individual—
(a) where the income from the employment of that individual is subject to deduction under any rules made pursuant to paragraph 154(1)(a); or
(b) where the total monthly remuneration from the employment of that individual is below the minimum amount of income that is subject to deduction under any rules made pursuant to paragraph 154(1)(a), and where it is known to him that the individual is not retiring from any employment.
(4) Where an individual chargeable to tax in respect of income in respect of gains or profits from an employment is to the knowledge of his employer about to leave or intending to leave Malaysia for a period exceeding three months, the employer shall not less than one month before the expected date of departure give written notice of the individual’s departure to the Director General:
Provided that—
(a) where he is satisfied that it is reasonable to do so in the circumstances, the Director General may accept for the purposes of this subsection a notice given less than one month before the departure or a notice given on or after the departure; and
(b) where he is satisfied that an individual is required to leave Malaysia at frequent intervals in the course of his employment, the Director General may waive the application of this subsection as regards that individual.
(5) Notwithstanding the provisions of any written law to the contrary, where an employer has in his possession any moneys whatsoever which are or may be payable to or for the benefit of an employee who has ceased or is about to cease to be employed by him or who is about to leave Malaysia for a period of more than three months with no intention of returning, he shall not, without the permission of the Director General, pay any part of those moneys to or for the benefit of the employee until ninety days after the receipt by the Director General of the notice
required to be given under subsection (3) or (4), as the case may be, and if at any time the Director General directs him to pay the full amount or a portion of those moneys towards payment of the tax payable by the employee, he shall pay as directed.
(6) For the purposes of this section and subsection 107(4), any person to whom or for whose benefit a service is rendered or performed by another person shall be deemed to be an employer whether or not he employs that other person or is responsible for paying remuneration to that other person.
Return concerning persons other than the maker of the return
(1) Every person who in whatever capacity is in receipt or has control of any money or property (being income of the kind mentioned in section 4) of or belonging to any other person who is chargeable to tax in respect thereof shall, if required to do so by a notice under the hand of the Director General, deliver to the Director General within a period to be specified in the notice (not being less than thirty days from the date of service of the notice) a return in the prescribed form containing particulars of the income and a statement of the name and address of the person to whom it belongs.
(2) Every person who sells any goods in Malaysia on behalf of a person who is not resident for the basis year for a year of assessment shall, if those goods are sold in the course of carrying on a business of that second mentioned person, deliver to the Director General within thirty days after the end of each quarter of that year of assessment a return showing the gross proceeds from any such sales made during that quarter.
(3) In subsection (2) “quarter”, in relation to a year of assessment, means any period of three months ending on the last day of March, June, September or December.
Return by occupiers
The Director General may by notice under his hand require the occupier of any land or premises situated in Malaysia to furnish within a time to be specified in the notice (not being less than thirty days from the date of service of the notice) a return containing—
(a) the name and address of the person registered (under any law relating to the registration of title to land) as the proprietor of the land or premises, or the name and address of the person to whom he pays rent therefor; and
(b) a statement of any rent or other consideration payable in respect of the occupation or in respect of furniture enjoyed in connection with the occupation.
Return by partnership
(1) Where a business is carried on by a partnership—
(a) the precedent partner, that is to say, the partner who, being an acting partner present in Malaysia—
(i) is first named in the partnership agreement; or
(ii) if there is no partnership agreement, is specified by name or initial singly or with precedence to the other partners in the usual name of the firm; or
(b) if no acting partner is present in Malaysia, any attorney, agent, manager or factor of the partnership in Malaysia,
shall for each year of assessment furnish to the Director General a return in the prescribed form not later than 30 June in the year following that year of assessment.
(2) For the purposes of subsection (1), a return for a year of assessment shall—
(a) specify the divisible income or the divisible loss as ascertained under the appropriate provisions of sections 55, 56, 57, 58 and 59 in relation to the partnership for that year;
(b) contain such information as is necessary to determine the statutory income from all sources of the partners of the partnership; and
(c) contain such other information as may be required by the Director General.
(3) If a partnership has been dissolved as to all its partners, this section shall continue to apply in relation to the dissolved partnership, and those persons who were partners of the partnership immediately before the dissolution shall be deemed to continue to be partners for the purposes of this section.
Power to call for further return
The Director General may give notice in writing to any person whenever he thinks fit requiring that person to furnish within a reasonable time (to be specified in the notice) fuller or further returns respecting any matter as to which a return is required by or under this Act.
Returns deemed to be made with due authority
A return purporting to be made pursuant to this Act by or on behalf of any person shall be presumed to have been made by that person or on his authority, as the case may be, until contrary is proved; and any person signing such a return shall be deemed to be cognisant of its contents.
Change of address
Every person chargeable to tax who changes his address in Malaysia (being an address furnished by him to the Director General) for another address in Malaysia shall within three months inform the Director General of the change by notice in writing.
P ART VI
ASSESSMENTS AND APPEALS
Chapter 1—Assessments
Assessments generally
(1) Where a person has furnished a return in accordance with section 77 or 77A to the Director General for a year of assessment, the Director General shall be deemed to have made, on the day on which the return is furnished, an assessment in respect of that person in the amount of tax on the chargeable
income, the tax and the chargeable income being the respective amounts as specified in the return.
(2) For the purposes of this Act, where the Director General is deemed to have made an assessment under subsection (1)—
(a) the return referred to in that subsection shall be deemed to be a notice of assessment; and
(b) the deemed notice of assessment shall be deemed to have been served on the person on the day on which the Director General is deemed to have made the assessment.
(3) Where a person for a year of assessment has not furnished a return in accordance with section 77 or 77 A , the Director General may according to the best of his judgment determine the amount of the chargeable income of that person for that year and make an assessment accordingly:
Provided that the making of an assessment in respect of a person under this subsection shall not affect any liability otherwise incurred by that person by reason of his failure to deliver the return.
Assessments and additional assessments in certain cases
(1) The Director General, where for any year of assessment it appears to him that no or no sufficient assessment has been made on a person chargeable to tax, may in that year or within six years after its expiration make an assessment or additional assessment, as the case may be, in respect of that person in the amount or additional amount of chargeable income and tax or in the additional amount of tax in which, according to the best of the Director General’s judgment, the assessment with respect to that person ought to have been made for that year.
(2) Where the Director General discovers that the whole or part of any tax repaid to a person (otherwise than in consequence of an agreement come to with respect to an assessment pursuant to subsection 101(2) or in consequence of an assessment having been determined on appeal) has been repaid by mistake whether of fact or law, the Director General may make an assessment in respect of that person in the amount of that tax or that part of that tax, as the case may be:
Provided that no such assessment shall be made—
(a) if the repayment was in fact made on the basis of, or in accordance with, the practice of the Director General generally prevailing at the time when the repayment was made; or
(b) in respect of any tax, more than six years after the tax has been repaid.
(3) The Director General where it appears to him that—
(a) any form of fraud or wilful default has been committed by or on behalf of any person; or
(b) any person has been negligent, in connection with or in relation to tax, may at any time make an assessment in respect of that person for any year of assessment for the purpose of making good any loss of tax attributable to the fraud, wilful default or negligence in question.
(4) Where in a year of assessment—
(a) any assessment made in respect of a person for any year of assesssment has been determined by the court on appeal or review; or
(b) any exemption, relief, remission or allowance granted to a person for any year of assessment pursuant to any provision of this Act or any other written law in respect of income of that person which is subject to tax under this Act has been withdrawn, revoked or cancelled for failing to comply with any condition imposed in granting such exemption, relief, remission or allowance, the Director General may in the first mentioned year of assessment or within six years after its expiration make an assessment in respect of that person for any year of assessment for the purpose of giving effect to the determination, revocation, withdrawal or cancellation, as the case may be.
Advance assessments
(1) Subject to this section—
(a) where in a year of assessment a person ceases to possess a source consisting of a business the Director
General may in that year make an assessment in respect of that person and income from that source for that year of assessment and the following year of assessment;
(b) where in a year of assessment a person commences to receive income in respect of income from an employment or in respect of any pension, annuity, or other periodical payments falling under paragraph 4(e), the Director General may in that year make an assessment in respect of that person and income from that source for that year of assessment and each of the subsequent years of assessment;
(c) where in a year of assessment the Director General is satisfied that a person who possesses a source is about to leave Malaysia and—
(i) that person is likely to cease to possess that source in that year of assessment or the following year of assessment; or
(ii) it is desirable for other reasons that an assessment be made in respect of that person, he may in that year make an assessment in respect of that person and income from that source or from any source for that year of assessment and the following year of assessment;
(d) where a person who has ceased to possess a source in a year of assessment receives income from that source after the end of that year (being income which has not been or does not fall to be included in the gross income of that person from that source for any preceding basis period) the Director General may in the year of assessment in which that income is received make an assessment in respect of that person and that income for that year of assessment;
(e) where in a year of assessment a person is chargeable to tax in consequence of the application of subsection 54(2) to a business, the Director General may at any time in that year make an assessment in respect of that person and any income from that business for that year of assessment; and
(f) where the basis period for a year of assessment in respect of a source or sources of a person is a period
of twelve months ending on a day other than 31 December in a basis year the Director General, if he thinks fit, may in that year make an assessment in respect of that person and income from that source or those sources, as case may be, for that year of assessment.
(2) Where an assessment is made under subsection (1) in respect of a person, it shall be made on the assumption that—
(a) all the provisions of this Act in force for the year of assessment in which the assessment is made will continue in force for the year of assessment for which the assessment is made; and
(b) if that person is an individual, the personal circumstances of that person will be the same in the basis year for the year of assessment for which the assessment is made as they were in the basis year for the year of assessment in which the assessment is made, and, if in the year of assessment for which the assessment is made it appears to the Director General that by reason of that assumption the assessment is more favourable or less favourable to that person than it would have been if it had been made under section 90, he may take such action under section 91 or make such repayments of tax as the justice of the case appears to him to require.
(3) Where—
(a) this section confers power to make an assessment in respect of a person;
(b) an assessment has been made in respect of that person in a particular year of assessment; and
(c) the Director General is of the opinion that an additional assessment ought to be made under subsection 91(1) in respect of that person in that particular year, subsection 91(1) shall apply as if the year of assessment referred to therein were that particular year.
(4) For the avoidance of doubt it is hereby declared that—
(a) the fact that an assessment has been made by virtue of subsection (1) in respect of a person and a source of his shall not prevent the Director General from making an assessment under this Act in respect of that person and any other source of his; and
(b) the fact that an assessment which would otherwise have been made by virtue of subsection (1) in respect of a person for a year of assessment has not been made because of an insufficiency of total income to produce chargeable income for that year shall not prevent the Director General from making an assessment under any other provision of this Act in respect of that person for that year of assessment or from taking an amount equal to that total income into account when doing so.
Form and making of assessments
An assessment, other than an assessment under subsection 90(1), in respect of a person shall—
(a) be made in the appropriate prescribed form;
(b) indicate, in addition to any other material included therein, the appropriate year of assessment and the amount or additional amount of chargeable income and the tax charged thereon or the amount of tax or additional tax, as the case may be; and
(c) specify in the appropriate space in that form the date on which that form was duly completed,
and, where that form appears to have been duly completed the assessment shall, until the contrary is proved, be presumed to have been made on the date so specified.
Record of assessments
The Director General shall cause to be maintained in such manner as he thinks fit a record of all assessments made for each year of assessment.
Discharge of double assessments
Where two or more assessments have been made with respect to a person on the same income for the same year of assessment, the Director General may discharge such of those assessments as need to be discharged in order to ensure that the income is charged to tax only once for that year.
Notice of assessment
(1) As soon as may be after an assessment, other than an assessment under subsection 90(1), has been made, the Director General shall cause a notice of assessment to be served on the person in respect of whom the assessment was made.
(2) Where the tax charged under an assessment is increased on appeal to the Special Commissioners or a court, then, so soon as may be after the appeal has been decided there shall be served on the person in respect of whom the assessment was made a notice of increased assessment.
(3) Where subsection 99(2) applies as regards an agent and another person, any notice to be served under subsection (1) or
(2) shall be served both on the agent and on the other person.
(4) A notice served under subsection (1) or (2) shall be in the prescribed form and shall indicate, in addition to any other material included therein—
(a) in the case of a notice served under subsection (1), the year of assessment, the amount or additional amount of chargeable income and the tax charged thereon or the amount of the tax or additional tax, as the case may be;
(b) in the case of a notice served under subsection (2), the year of assessment and the amount of the increase in the tax charged; and
(c) in either case—
(i) the place at which payment is to be made;
(ii) the increase for late payment imposed by subsection 103(5), (6), (7) or (8); and
(iii) any right of appeal which may exist under this Act.
Composite assessment
(1) Without prejudice to section 91, where a person—
(a) makes default in furnishing a return in accordance with subsection 77(1) or 77A (1);
(b) fails to give notice of chargeability in accordance with subsection 77(3);
(c) makes an incorrect return by omitting or understating any income of which he is required by this Act to make a return on behalf of himself or another person; or
(d) gives any incorrect information in relation to any matter affecting his own chargeability to tax or the chargeability to tax of any other person,
for any year or years of assessment (that year or those years being referred to in this section as the relevant year or relevant years), the Director General and that person may come to an agreement in writing as to the payment by that person of a sum of money (in this section referred to as the total amount) being—
(i) the amount of tax which has been undercharged or not charged for that relevant year or those relevant years in consequence of such default in furnishing a return or failure to give notice of chargeability or making an incorrect return or giving any incorrect information; and
(ii) the amount of any penalty or penalties which that person may be required to pay for that relevant year or those relevant years pursuant to subsection 112(3) or 113(2) or both (or where such penalty is abated or remitted under subsection 124(3) so much, if any, of the penalty which has not been abated or remitted).
(2) Where the Director General and a person have come to an agreement pursuant to subsection (1), the Director General may make a composite assessment in respect of that person in the total amount.
(3) As soon as may be after a composite assessment has been made, the Director General shall cause a notice of composite assessment to be served on the person in respect of whom the composite assessment was made.
(4) A notice served under subsection (3) shall be in the prescribed form and shall indicate in addition to any other material included therein—
(a) the relevant year or relevant years;
(b) the amount or aggregate amount of tax undercharged or not charged in the relevant year or relevant years;
(c) the amount or aggregate amount of any penalty imposed by virtue of subsection 112(3) or 113(2) or both (or where such penalty is abated or remitted under subsection 124(3) so much, if any, of the penalty which has not been abated or remitted); and
(d) the place at which payment of the total amount is to be made.
(5) The total amount shall be collected as if it were part of the tax payable by the person in respect of whom the composite assessment has been made but shall not be treated as tax so payable for the purposes of the provisions of this Act other than sections 103 to 106.
(6) Notwithstanding any other provision of this Act—
(a) a composite assessment made under this section shall be final and conclusive for the purposes of this Act; and
(b) no appeal shall lie against a composite assessment.
(7) For the purposes of this section, references to sections of this Act in subsections (1), (4) and (5) shall be deemed to include references to the corresponding sections of the repealed laws, and references to year of assessment in subsection (1) shall be deemed to include a reference to pre-year of assessment; the repealed laws and pre-year of assessment having the same meaning as in subparagraph 1(1) of Part I of Schedule 9.
Finality of assessment
(1) Where—
(a) no valid notice of appeal against an assessment has been given under section 99 within the time specified by that section (or any extension thereof);
(b) an agreement has been come to with respect to an assessment pursuant to subsection 101(2);
(c) an assessment has been determined on appeal and there is no right of further appeal; or
(d) a valid notice of appeal against an assessment has been given but the appellant dies before the hearing of the appeal by the Special Commissioners is commenced or completed and no personal representatives of the estate of the deceased appellant applies to the Special Commissioners within two years after his death to proceed with or complete the hearing, the assessment as made, agreed to or determined shall be final and conclusive for the purposes of this Act.
(2) Nothing in subsection (1) shall prejudice the exercise of any power conferred on the Director General by section 91, 95 or subsection 143(3).
Chapter 2—Appeals
The Special Commissioners and the Clerk
(1) For the purposes of this Act there shall be three or more Special Commissioners of Income Tax and a Clerk to the Special Commissioners.
(2) The Special Commissioners shall be appointed by the Yang di-Pertuan Agong.
(3) The Special Commissioners shall include such number of persons with judicial or other legal experience (that is to say, experience as an advocate, as a member of the judicial and legal service or as the holder of an office to which the Judges Remuneration Act 1971 [Act 45], applies) as may be necessary
for the purposes of paragraph 1 of Schedule 5; and, if the Yang di-Pertuan Agong considers it expedient to do so, he may appoint one of those persons to be the Chairman of the Special Commissioners.
(4) Each Special Commissioner—
(a) shall hold office for such period and on such terms (including terms as to remuneration and allowances) as may be specified by the Minister; and
(b) shall be deemed to be a public servant within the meaning of section 21 of the Penal Code [Act 574].
(5) The office of the Clerk shall be a federal public office.
Right of appeal
(1) A person aggrieved by an assessment made in respect of him may appeal to the Special Commissioners against the assessment by giving to the Director General within thirty days after the service of the notice of assessment or, in the case of an appeal against an assessment made under section 92, within the first three months of the year of assessment following the year of assessment for which the assessment was made (or within such extended period as regards those days or months as may be allowed under section 100) a written notice of appeal in the prescribed form stating the grounds of appeal and containing such other particulars as may be required by that form.
(2) Where an assessment has been made in respect of a person appointed under section 68 to be the agent of another person, the agent and that other person shall for the purposes of this section and the other provisions of this Act relating to appeals each be treated as the person in respect of whom the assessment was made and, if they both appeal against the assessment, their appeals shall if possible be dealt with together:
Provided that, in the case of a receiver deemed by subsection 68(4) to have been appointed under subsection 68(1) to be the agent of a court, this subsection shall not apply.
(3) Where in a case to which section 67 applies the principal has appealed against an assessment, the representative, whether or not he himself has appealed or is entitled to appeal against the assessment and without prejudice to any power conferred on him
by subparagraph 14(c) of Schedule 5, may represent and act generally on behalf of the principal for the purposes of the provisions of this Act relating to appeals (“the principal” and “the representative” here having the same meaning as in section 67).
Extension of time for appeal
(1) A person seeking to appeal against an assessment may at any time make to the Director General a written application in the prescribed form for an extension of the period within which notice of appeal against the assessment may be given under subsection 99(1).
(2) On receipt of an application under subsection (1), the Director General—
(a) if he is satisfied that for any reasonable cause the applicant was prevented from giving notice of appeal within the appropriate period provided by subsection 99(1), shall extend that period as he thinks proper in the circumstances and give written notice of the extension to the applicant; and
(b) if he is not so satisfied, shall forward the application to the Clerk, together with a statement of the reasons for his dissatisfaction and his address for the purposes of the application.
(3) Where the Director General forwards an application and statement pursuant to paragraph (2)(b), he shall inform the applicant in writing that he has done so and shall furnish the applicant with a copy of the statement; and the applicant may, within twenty-one days of receiving the information and the copy, forward to the Clerk written representations as to the application and the statement.
(4) Any application and statement forwarded pursuant to paragraph (2)(b) and any representations forwarded pursuant to subsection (3) shall be brought by the clerk to the attention of one of the Special Commissioners, who shall decide whether or not to extend as he thinks proper in the circumstances the period within which the notice of appeal may be given.
(5) The decision of one of the Special Commissioners refusing an application or granting an extension under subsection (4) shall
be notified in writing by the Clerk to the applicant and the Director General and shall be final.
Review by Director General
(1) On receipt of a notice of appeal under subsection 99(1), the Director General shall, within twelve months from the date of receipt of the notice of appeal, review the assessment against which the appeal is made and for that purpose may—
(a) require the appellant to furnish such particulars as the Director General may think necessary with respect to the income to which the assessment relates and any other matter relevant to the assessment in the Director General’s opinion;
(b) require the appellant to produce all books or other documents in the appellant’s custody or under the appellant’s control relating to any source to which the assessment relates or any other matter relevant to the assessment in the Director General’s opinion;
(c) summon any person who in the Director General’s opinion is able to give evidence respecting the assessment to attend before the Director General; and
(d) examine any person so attending on oath or otherwise.
(1A ) Where the Director General requires a period longer than twelve months to carry out the review under subsection (1), the Director General may apply to the Minister for an extension of that period not later than thirty days before the expiry of the twelve-month period.
(1B ) On receipt of an application under subsection (1A), the Minister may grant such extension as he thinks proper and reasonable in the circumstances provided that such extension shall not exceed a period of six months from the date of expiry of the twelve-month period.
(1C ) The decision of the Minister under subsection (1B ) shall be notified in writing to the Director General and shall be final.
(2) Where as the result of a review under subsection (1) the Director General and the appellant come to an agreement in writing either—
(a) as to the amount of the chargeable income and the tax chargeable thereon or the amount of tax or additional tax; or
(b) that there is no chargeable income or tax,
the assessment against which the appeal is made shall be treated as having been confirmed, reduced, increased or discharged in accordance with the agreement.
(3) Subject to subsection (5), where as the result of a review under subsection (1) the Director General and the appellant come to an oral agreement as to the matters mentioned in paragraph
(2)(a) or (b) and the Director General serves a written confirmation of the agreement on the appellant, then, unless the appellant within a period of twenty-one days of being so served gives notice in writing to the Director General repudiating the agreement, the oral agreement as confirmed by the Director General shall be deemed to be an agreement in writing within the meaning of subsection (2) come to upon the expiration of that period between the Director General and the appellant.
(4) Subject to subsection (5), where as the result of a review under subsection (1) the Director General makes to the appellant proposals in writing that the assessment should be confirmed, reduced, increased or discharged and the appellant neither accepts nor rejects the proposals, unless the appellant within a period of thirty days of being served with such proposals (or within such further period as the Director General on the appellant’s application may allow) gives notice in writing to the Director General rejecting the proposals, the proposals shall be deemed to have been accepted and to be an agreement in writing within the meaning of subsection (2) come to upon the expiration of that period or further period, as the case may be, between the Director General and the appellant.
(5) Where by the operation of subsection (3) or (4) there is deemed to be an agreement within the meaning of subsection (2) between the Director General and the appellant, one of the Special Commissioners on the application of the appellant made to the Special Commissioners within a period of thirty days after the agreement is deemed to be come to may, after giving the Director General an opportunity to make oral or written representations, set the agreement aside if he thinks it just and equitable to do so in the circumstances.
(6) The decision of one of the Special Commissioners on an application under subsection (5) shall be notified by the Clerk in writing to the applicant and the Director General and shall be final.
(7) References in this section to agreements come to between the Director General and the appellant and to confirmations and requests being served on the appellant include references to agreements come to between the Director General and a duly authorized person conducting correspondence or otherwise acting on behalf of the appellant in relation to the appeal and to confirmations and requests served on such a person.
(8) Where on an appeal against an assessment the tax chargeable under the assessment is increased by an agreement come to under subsection (2) or by an agreement deemed to be come to under subsection (3) or (4) and not set aside under subsection (5), the Director General shall serve on the appellant a notice in the prescribed form which shall—
(a) indicate, in addition to any other material included therein, the amount of the increase in the tax charged and the place of payment; and
(b) have the same effect for the purposes of Part VII as a notice of increased assessment.
(9) The notice mentioned in subsection (8) shall be served—
(a) where an agreement is come to under subsection (2), as soon as may be; and
(b) where an agreement is come to under subsection (3) or
(4) and is not set aside under subsection (5), as soon as may be after the expiry of the period mentioned in subsection (5) or, if there is an unsuccessful application to the Special Commissioners under subsection (5), as soon as may be after the application has been refused.
Disposal of appeals
(1) Subject to subsection (3), the Director General may send an appeal forward to the Special Commissioners at any time within the twelve-month period from the date of receipt of the notice of appeal or, if an extension under subsection 101(1B) has been granted, within the extended period if he is of the opinion
that there is no reasonable prospect of coming to an agreement with the appellant in accordance with subsection 101(2) in respect of the appeal and if subsections 101(3) and (4) are not applicable; and, where he sends an appeal forward under this subsection, he shall give the appellant written notice that he has done so.
(2) (Deleted by Act 600).
(3) No appeal shall be sent forward to the Special Commissioners if the Director General and the appellant have or are deemed to have come to an agreement in respect of it in accordance with subsection 101(2), (3) or (4).
(4) Where an appeal is sent forward to the Special Commissioners pursuant to this section, the appeal shall be sent forward in the manner provided by Schedule 5 and that Schedule shall have effect for regulating the hearing and determination of the appeal and otherwise as provided therein.
(5) Where an appeal has been sent forward to the Special Commissioners pursuant to this section—
(a) the Director General and the appellant at any time before the hearing of the appeal by the Special Commissioners is completed may come to an agreement of the kind mentioned in subsection 101(2) with regard to the assessment to which the appeal relates; or
(b) the appellant may at any time withdraw the appeal.
(6) Where the Director General and the appellant come to an agreement under paragraph (5)(a), the Director General shall and the appellant may, send a true copy of the agreement to the Special Commissioners.
(7) Where the Special Commissioners are satisfied that the Director General and the appellant have come to an agreement under paragraph (5)(a) with regard to the assessment to which an appeal relates—
(a) the proceedings before the Special Commissioners relating to the appeal shall abate;
(b) the agreement shall have effect as if it had been come to under subsection 101(2); and
(c) subsections 101(8) and (9) shall apply accordingly.
(8) Where the Special Commissioners are satisfied that the appellant has withdrawn his appeal under paragraph (5)(b)—
(a) the proceedings before the Special Commissioners relating to the appeal shall abate; and
(b) the assessment to which the appeal relates shall be final and conclusive for the purposes of this Act, the Income Tax Ordinance 1956 of Sabah [Sabah Ord. 29 of 1956], the Inland Revenue Ordinance 1960 of Sarawak [Sawarak Ord. 13 of 1960] or the Income Tax Ordinance 1947 of West Malaysia [Ord. 48 of 1947], as the case may be.
(9) In this section “appeal” means an appeal against an assessment.
P ART VII COLLECTION AND RECOVERY OF TAX
Payment of tax
(1) Except as provided in subsection (2), tax payable under an assessment for a year of assessment shall be due and payable on the due date whether or not that person appeals against the assessment.
(2) Where an assessment is made under section 90(3), 91, 92 or 96A , or where an assessment is increased under section 101(2), the tax payable under the assessment or increased assessment shall, on the service of the notice of assessment or composite assessment or increased assessment, as the case may be, be due and payable on the person assessed at the place specified in that notice whether or not that person appeals against the assessment or increased assessment.
(3) Where any tax due and payable under subsection (1) has not been paid by the due date, so much of the tax as is unpaid upon the expiration of that date shall without any further notice being served be increased by a sum equal to ten per cent of the tax so unpaid, and that sum shall be recoverable as if it were tax due and payable under this Act.
(4) Where the tax due and payable has been increased under subsection (3), any balance remaining unpaid upon the expiration of sixty days from the due date shall without any further notice being served be further increased by a sum equal to five per cent of the balance unpaid, and that sum shall be recoverable as if it were tax due and payable under this Act.
(5) Subject to subsection (7), where any tax due and payable under subsection (2) has not been paid within thirty days after the service of the notice, so much of the tax as is unpaid upon the expiration of that period shall without any further notice being served be increased by a sum equal to ten per cent of the tax so unpaid, and that sum shall be recoverable as if it were tax due and payable under this Act.
(6) Where the tax due and payable has been increased under subsection (5), any balance remaining unpaid upon the expiration of sixty days from the date of such increase shall without any further notice being served be further increased by a sum equal to five per cent of the balance unpaid, and that sum shall be recoverable as if it were tax due and payable under this Act.
(7) Where any tax is payable in accordance with subsection
(2), the Director General may allow the tax to be paid by instalments in such amounts and on such dates as he may determine and in the event of default in payment of any one instalment on the date specified for payment the balance of the tax then outstanding shall be due and payable on that date and shall without any further notice being served be increased by a sum equal to ten per cent of that balance, and that sum shall be recoverable as if it were tax due and payable under this Act.
(8) Where the tax due and payable has been increased under subsection (7), any balance remaining unpaid upon the expiration of sixty days from the date of such increase shall without any further notice being served be further increased by a sum equal to five per cent of the balance unpaid, and that sum shall be recoverable as if it were tax due and payable under this Act.
(9) Notwithstanding the foregoing subsections, where tax due and payable is increased by a sum under subsection (3), (4), (5),
(6), (7) or (8), the Director General may in his discretion for any good cause shown remit the whole or any part of that sum and, where the amount remitted has been paid, the Director General shall repay that amount.
(10) Where section 45(2) applies for a year of assessment, the portion of the tax charged for that year upon the husband or the wife in whose name the assessment was made which is attributable to the total income for that year of the wife who elects or the husband who elects, as the case may be, may, if necessary, be collected from the wife who elects or the husband who elects; and this Part shall apply (with any necessary modifications) as if, on the day on which a notice of assessment or a notice of increased assessment for that year is served on the husband or the wife that notice of assessment or notice of increased assessment had been served on the wife who elects or the husband who elects, as the case may be:
Provided that nothing in this subsection shall be construed as conferring on the wife who elects or the husband who elects, as the case may be, any right of appeal under section 99.
(11) For the purposes of subsection (10), the part of the tax charged for a year of assessment upon the husband or the wife which is attributable to the total income for that year of the wife who elects or the husband who elects, as the case may be, shall be determined in accordance with the formula—
A × C ___ B
where—
(a) in the case of the wife who elects— A is that wife’s total income for a year of assessment; B is the aggregate of the husband’s and that wife’s or wives’ total income; and C is the tax charged for the year of assessment where paragraph 45(2)(a) applies; or
(b) in the case of the husband who elects— A is that husband’s total income for a year of assessment; B is the aggregate of the wife’s and that husband’s total income; and
C is the tax charged for the year of assessment where paragraph 45(2)(b) applies.
(12) For the purposes of this section, “due date” means—
(a) in the case of a company, trust body or co-operative society the last day of the seventh month from the date following the close of the accounting period;
(b) in the case of a person referred to under paragraph 77(1)(a), 30 June in the year following the year of assessment; and
(c) in any other case other than the cases referred to in paragraphs (a) and (b), 30 April in the year following the year of assessment.
(Deleted by Act A1151).
Recovery from persons leaving Malaysia
(1) The Director General, where he is of the opinion that any person is about or likely to leave Malaysia without paying—
(a) all tax payable by him (whether or not due or due and payable);
(b) all sums payable by him under subsection 103(3), (4),
(5), (6), (7) or (8); and
(c) all debts payable by him under subsection 107A(2) or 109(2) or 109B(2),
may issue to any Commissioner of Police or Director of Immigration a certificate containing particulars of the tax, sums and debts so payable with a request for that person to be prevented from leaving Malaysia unless and until he pays all the tax, sums and debts so payable or furnishes security to the satisfaction of the Director General for their payment.
(2) Subject to any order issued or made under any written law relating to banishment or immigration, any Commissioner of Police or Director of Immigration who receives a request under subsection (1) in respect of any person shall take or cause to be taken all such measures (including the use of reasonable force and the seizure, removal or retention of any certificate of identity
and any passport, exit permit or other travel document relating to that person) as may be necessary to give effect to it.
(3) The Director General shall cause notice of the issue of a certificate under subsection (1) to be served personally or by registered post on the person to whom the certificate relates:
Provided that the non-receipt of the notice by that person shall not invalidate anything done under this section.
(4) Where a person in respect of whom a certificate has been issued under subsection (1)—
(a) produces a written statement signed on or after the date of the certificate by the Director General or an authorized officer to the effect that all the tax, sums and debts specified in the certificate have been paid or that security has been furnished for their payment; or
(b) pays all the tax, sums and debts specified in the certificate to the officer in charge of a police station or to an immigration officer,
the statement or the payment, as the case may be, shall be sufficient authority for allowing that person to leave Malaysia.
(5) No legal proceedings shall be instituted or maintained against the Government, a State Government, a police officer or any other public officer in respect of anything lawfully done under this section or subsection 115(2).
(6) In this section— “Commissioner of Police” includes a Chief Police Officer; “Director of Immigration” means the Director of Immigration in Sabah, Sarawak or West Malaysia; “immigration officer” means a public officer having official duties in connection with the control of immigration into Malaysia or any part of Malaysia.
Refusal of customs clearance in certain cases
(1) Where tax payable by a person who carries on the business of transporting passengers or cargo by air or sea (or tax
payable by an agent of that person) has remained unpaid for more than three months (whether that person has been assessed directly or the agent has been assessed on his behalf) the Director General may with the approval of the Minister issue to the customs authority a certificate containing the name of that person or the agent, as the case may be, and particulars of the tax in default; and the customs authority shall thereupon refuse clearance from any port, aerodrome or airport in Malaysia to any ship or aircraft wholly or partly owned or chartered by that person until the tax is paid.
(2) No legal proceedings shall be instituted or maintained against the Government, the customs authority or any public officer in respect of a refusal of clearance under this section, nor shall the fact that a ship or aircraft is detained under this section affect the liability of the owner, charterer or agent to pay harbour or other dues and charges for the period of detention.
(3) In this section “customs authority” means the Director General of Customs and Excise, and includes the Regional Directors of Customs in Sabah, Sarawak and West Malaysia and any other authority by whom customs clearance may be granted.
Recovery by suit
(1) Tax due and payable may be recovered by the Government by civil proceedings as a debt due to the Government.
(2) The Director General and all authorized officers shall be deemed to be public officers authorized by the Minister under subsection 25(1) of the Government Proceedings Act 1956 [Act 359], in respect of all proceedings under this section.
(3) In any proceedings under this section the court shall not entertain any plea that the amount of tax sought to be recovered is excessive, incorrectly assessed, under appeal or incorrectly increased under subsection 103(3), (4), (5), (6), (7) or (8).
Deduction of tax from emoluments and pensions
(1) Where any income in respect of gains or profits from an employment or in respect of any pension, annuity or periodical
payment falling under paragraph 4(e) is payable to an individual, then, if the Director General so directs, the person by whom the income is payable shall make deductions out of the income on account of tax which is or may be payable by that individual for any year of assessment.
(2) Subject to any rules made under section 154, deductions under this section on account of tax shall be made at such times and in such amounts as the Director General may direct, whether or not the tax has been assessed.
(3) In relation to any case, nothing in this section shall prevent the collection of any tax (not being tax deducted in accordance with this section) in accordance with section 103 or the payment of that tax being enforced in accordance with section 106:
Provided that in any such case for the purposes of section 103 the Director General shall determine the period within which that tax shall be payable.
(4) An employer who fails to comply with subsection 83(2),
(3), (4) or (5) or this section with respect to an employee of his shall be liable, in the case of a failure to comply with subsection 83(2), (3), (4) or (5), to pay the full amount of tax due from the employee and, in the case of a failure to comply with this section, to pay the amount of tax which he has failed to deduct:
Provided that—
(a) the Director General shall apply any amount paid to or recovered by him in pursuance of this subsection towards payment of the tax payable by the employee; and
(b) the employer may recover from the employee as a debt due to the employer any amount which has been paid to the Director General by the employer or recovered by the Director General from the employer in pursuance of this subsection.
(5) Where a person by whom any income of the kind mentioned in paragraph 4(e) is payable fails to comply with this section with respect to a recipient of that income, that person shall be liable to pay the amount of tax which he has failed to deduct:
Provided that—
(a) the Director General shall apply any amount paid to or recovered by him in pursuance of this subsection towards payment of the tax payable by the recipient; and
(b) the person may recover from the recipient as a debt due to that person any amount which has been paid to the Director General by that person or recovered by the Director General from that person in pursuance of this subsection.
Deduction of tax from contract payment
(1) Where any person (in this section referred to as “the payer”) is liable to make contract payment to a non-resident contractor in respect of services under a contract, he shall upon paying or crediting such contract payment deduct therefrom tax at the rate of—
(a) ten per cent of the contract payment on account of tax which is or may be payable by that non-resident contractor for any year of assessment; and
(b) three per cent of the contract payment on account of tax which is or may be payable by employees of that non-resident contractor for any year of assessment,
and (whether or not that tax is so deducted) shall within one month after paying or crediting such contract payment render an account and pay the amount of that tax to the Director General:
Provided that the Director General may—
(i) give notice in writing to the payer requiring him to deduct and pay tax at some other rates or to pay or credit the contract payment without deduction of tax; or
(ii) under special circumstances, allow extension of time for tax deducted to be paid over.
(2) Where the payer fails to pay any amount due from him under subsection (1), that amount which he fails to pay shall be increased by an amount equal to ten per cent of the contract payment liable to deduction of tax under subsection (1) and the
total sum shall be a debt due from him to the Government and shall be payable forthwith to the Director General.
(3) Where in pursuance of this section any amount is paid to the Director General by the payer or recovered by the Director General from the payer—
(a) the Director General shall apply the amount paid or recovered under paragraph (1)(a) towards payment of the tax payable for any year of assessment by the nonresident contractor to whom the payer was liable to pay the contract payment to which that amount relates;
(b) the Director General shall refund the amount paid or recovered under paragraph (1)(b) to the non-resident contractor to whom the payer was liable to pay the contract payment to which that amount relates as and when the Director General deems appropriate; and
(c) if the payer has not deducted any amount in paying the contract payment with respect to which the amount relates, he may recover the amount from the nonresident contractor as a debt due to the payer.
(4) In relation to any case, nothing in paragraph (1)(b) shall prevent the deduction of any tax (not being tax deducted in accordance with this subsection) in accordance with section 107.
(5) In this section— “contract payment” means any payment made for services under a contract to the non-resident contractor or his agent or any other person acting on his behalf; “contract project”, in relation to any non-resident contractor, includes any undertaking, project or scheme, being an undertaking, project or scheme carried on, carried out or performed in Malaysia; “non-resident contractor” means any person who is not resident in Malaysia within the meaning of section 7 or 8 and who, under a contract or a subsidiary contract (not being a contract of service or apprenticeship) or an agreement or arrangement undertakes (otherwise than as an employee) any services under a contract; “person” includes a partnership;
“professional service”, in relation to any non-resident contractor, includes any advisory, consultancy, technical, industrial, commercial or scientific service; “services under a contract”, in relation to any non-resident contractor, means the performing or rendering of any work or professional service in Malaysia, being work or professional service in connection with, or in relation to, any contract project.
Payment by instalments
(1) Subject to this section, every person chargeable to tax for a year of assessment, other than a company, trust body or cooperative society to which section 107C applies shall make payment by instalments on account of tax, excluding tax in respect of gains or profits from an employment, which is or may be payable by that person for that year of assessment, at such times and in such amounts as the Director General may direct, whether or not the tax has been assessed.
(2) In determining the amount to be paid under subsection (1), the Director General may take into consideration the tax assessed, if any, in respect of the person for the year of assessment preceding that year of assessment:
Provided that the Director General may, upon an application made by the person not later than the thirtieth day of June in that year of assessment, vary the amount to be paid by instalments on account of tax and the number of instalments.
(3) Where any instalment amount due and payable on the date specified by the Director General pursuant to subsection (1) or (2) has not been paid within thirty days of the due date, the amount unpaid shall, without any further notice being served, be increased by a sum equal to ten per cent of the amount unpaid, and that sum shall be recoverable as if it were tax due and payable under this Act:
Provided that, where the amount unpaid is subsequently paid, the Director General may treat it as having been paid on its due date.
(4) In any case to which the proviso to subsection (2) applies, where the tax payable under an assessment for that year of assessment exceeds the total of the instalments payable and the
difference is more than thirty per cent of the tax payable under the assessment, then, without any further notice being served, the amount of the difference which exceeds thirty per cent of the tax payable under the assessment shall be increased by a sum equal to ten per cent of that amount of the difference, and that sum shall be recoverable as if it were tax due and payable under this Act:
Provided that in the case of an individual whose income includes gains or profits from an employment, the tax payable under an assessment for that year of assessment shall be reduced by the amount of tax which is attributable to those gains or profits.
(4A ) For the purposes of subsection (4), the amount of tax which is attributable to the income in respect of gains or profits from an employment of an individual shall be determined in accordance with the formula—
A × C ___ B where A is his statutory income in respect of gains or profits from employment for a year of assessment; B is his total income for that year of assessment; and C is his tax payable for that year of assessment.
(5) Nothing in this section shall prevent the collection of any tax from a person to whom this section applies in accordance with section 103 or the payment of that tax being enforced in accordance with section 106: Provided that in any such case for the purposes of section 103 the Director General shall determine the period within which that tax shall be payable.
Estimate of tax payable and payment by instalments for companies
(1) Every company, trust body or co-operative society shall for each year of assessment furnish to the Director General an estimate of its tax payable.
(2) Except as provided in paragraph (4)(a), the estimate of tax payable for a year of assessment shall be made in the prescribed
form and furnished to the Director General not later than thirty days before the beginning of the basis period for that year of assessment.
(3) The estimate of tax payable for a year of assessment shall not be less than eighty-five per cent of the revised estimate of tax payable for the immediately preceding year of assessment or if no revised estimate is furnished, shall not be less than eighty-five per cent of the estimate of tax payable for the immediately preceding year of assessment.
(4) Where a company, trust body or co-operative society first commences operation in a year of assessment—
(a) the estimate of its tax payable for that year of assessment shall be made in the prescribed form and furnished to the Director General within three months from the date of commencement of operations; and
(b) subsections (2) and (3) shall apply to the company, trust body or co-operative society beginning from the second year of assessment.
(5) Where an estimate of tax payable for a year of assessment has been furnished in accordance with subsection (2), that amount shall be paid to the Director General in equal monthly instalments determined according to the number of months in the basis period and each instalment shall be paid by the due date beginning from the second month of the basis period for the year of assessment in respect of which that estimate has been furnished.
(6) Where an estimate of tax payable for a year of assessment has been furnished in accordance with paragraph (4)(a), that amount shall be paid to the Director General in equal monthly instalments determined according to the number of months in the basis period and each instalment shall be paid by the due date beginning from the sixth month of the basis period for the year of assessment in respect of which that estimate has been furnished.
(7) A company, trust body or co-operative society may in the sixth month or the ninth month, or in both months of the basis period for a year of assessment furnish to the Director General a revised estimate of its tax payable for that year in the prescribed form and—
(a) where the revised estimate exceeds the amount of instalments which is payable in that year prior to that
revised estimate, the difference shall be payable in the remaining instalments in equal proportion; or
(b) where the amount of instalments which is payable in that year prior to that revised estimate exceeds the revised estimate, the remaining instalments shall cease immediately.
(8) Notwithstanding subsections (1), (3), (5), (6) and (7), the Director General may direct any company, trust body or cooperative society to make payment by instalments on account of tax which is or may be payable by that company, trust body or cooperative society for a year of assessment at such times and in such amounts as the Director General may direct.
(9) Where any instalment amount due and payable has not been paid by the due date or on the date specified by the Director General, the amount unpaid shall, without any further notice being served, be increased by a sum equal to ten per cent of the amount unpaid, and the amount unpaid and the increase on the amount unpaid shall be recoverable as if it were tax due and payable under this Act.
(10) Where the tax payable under an assessment for a year of assessment exceeds the revised estimate of tax payable for that year of assessment or if no revised estimate is furnished, the estimate of tax payable for that year of assessment, by an amount of more than thirty per cent of the tax payable under the assessment, then, without any further notice being served, the difference between that amount and thirty per cent of the tax payable under the assessment shall be increased by a sum equal to ten per cent of the amount of that difference, and that sum shall be recoverable as if it were tax due and payable under this Act.
(11) Notwithstanding the foregoing subsections, where the estimate of tax payable for a year of assessment is increased by a sum under subsection (9) or (10), the Director General may in his discretion for any good cause shown remit the whole or any part of that sum and, where the amount remitted has been paid, the Director General shall repay the same.
(11A) Nothing in this section shall prevent the collection of any tax from a person to whom this section applies in accordance with section 103 or the payment of that tax being enforced in accordance with section 106.
(12) For the purposes of this section— “due date” means the tenth day of a calendar month; “revised estimate” means a revised estimate made in the ninth month of the basis period or if there is no revised estimate made in the ninth month of the basis period, the revised estimate made in the sixth month of the basis period.
Deduction of tax from dividends
(1) Where a dividend is paid or credited by a company to any of its shareholders in the basis period for a year of assessment, then, if the dividend is deemed by virtue of section 14 to be derived from Malaysia, the company shall be entitled to deduct tax therefrom at the rate applicable to the company on the chargeable income for that year of assessment or, where there is no chargeable income of the company for that year at the rate which would be so applicable if there were such chargeable income.
(1A ) For the purposes of subsection (1), where a company to which paragraph 2A of Schedule 1 applies, the rate applicable to that company shall be the higher of the two rates specified in that paragraph.
(2) Where a company pays, credits or distributes without deduction of tax a dividend from which it is entitled to deduct tax (or a dividend from which it would have been entitled to deduct tax if the dividend had been wholly paid in cash), the dividend shall be deemed to be a dividend of such a gross amount as determined in accordance with the formula—
× Β _____ (1–A)
where A is the rate of tax applicable to the company for a year of assessment at the time of the payment, crediting or distribution of the dividend; and B is the amount in fact paid or credited or where the dividend consists or property other than money, the amount of the market value of that property at the time of the distribution of the dividend,
and a sum equal to the difference between that gross amount and the amount in B in the above formula shall be deemed to have been deducted from the dividend as tax.
(3) Notwithstanding any other provision of this Act, where a dividend is paid, credited or distributed with or without deduction of tax in the basis period for a year of assessment, and there is a revision in the rate of tax for companies for that year of assessment (in this subsection referred to as the revised rate), the amount of the dividend received by the shareholder shall be deemed to be a dividend of such a gross amount as determined in accordance with the formula—
1 × Β _____ (1–A)
where A is the revised rate of tax applicable to the company for that year of assessment at the time of the payment, crediting or distribution of the dividend; and B is the amount in fact paid or credited or where the dividend consists or property other than money, the amount of the market value of that property at the time of the distribution of the dividend,
and a sum equal to the difference between that gross amount and the amount in B in the above formula shall be deemed to have been deducted from the dividend as tax.
(4) Every company shall upon paying, crediting or distributing to a shareholder a dividend of the kind to which subsection (1) or (2) applies (whether tax is deducted therefrom or not) furnish the shareholder with a certificate setting forth in respect of the dividend—
(a) the gross amount;
(b) the amount of tax—
(i) which the company is entitled to deduct under subsection (1); or
(ii) which is deemed to have been deducted under subsection (2); and
(c) the amount in fact paid or credited or where the dividend consists of property other than money, the amount of the market value of that property at the time of the distribution of the dividend.
(5) Within seven months following the close of the accounting period, every resident company shall render to the Director General a statement in the prescribed form showing for a year of assessment—
(a) the total amount of tax—
(i) which the company is entitled to deduct under subsection (1); and
(ii) which is deemed to have been deducted under subsection (2) or (3), from that dividend paid, credited or distributed to its shareholders in the basis period for that year of assessment (that total amount being in this section referred to as the compared total); and
(b) the aggregate of the amount—
(i) of the tax paid (if any) and an amount of the tax set off under section 110 (if any) (restricted to the amount of the tax on the chargeable income of the company less any rebate under section 6 B or any relief given for a year of assessment under section 132 or 133) less any tax refunded to the company, in the basis period for that year of assessment; and
(ii) the balance (if any) carried forward for the credit of the company in accordance with subsection (8), (that aggregate amount being in this section referred to as the compared aggregate).
(6) Where, in relation to a year of assessment and a company, the compared total exceeds the compared aggregate at the end of the basis period for a year of assessment, a sum equal to the amount of the excess shall be a debt due from the company to the Government and that debt shall be due and payable on the due date.
(7) Where any excess due and payable by a company under subsection (6) has not been paid by the due date, so much of the excess as is unpaid upon the expiration of that day shall, without any further notice being served, be increased by an amount equal to ten per cent of the excess so unpaid, and the amount unpaid and the increase on the amount unpaid shall be a debt due from the company to the Government and that debt shall be payable forthwith to the Director General.
(8) Where in relation to a company, the compared aggregate exceeds the compared total at the end of the basis period for a year of assessment, a sum equal to the amount of the excess shall be carried forward as a balance for the credit of the company to the following year of assessment.
(9) Where in relation to a year of assessment, a company fails—
(a) to render the statement referred to in subsection (5); or
(b) to provide the information required in the statement referred to in subsection (5),
and the Director General is of the opinion that the company has paid, credited or distributed dividends to its shareholders in the basis period for that year of assessment, he may compute the amount of the excess referred to in subsection (6), if any, and shall serve on the company a written requisition in the prescribed form calling upon the company to pay an amount equal to that excess and an amount of an increase not exceeding the amount equal to that excess, and the amount equal to that excess and the increase on that amount shall be a debt due from the company to the Government and that debt shall be payable forthwith to the Director General upon the service of the requisition.
(10) Where a company—
(a) is not entitled to deduct tax under this section from a dividend paid or credited in a basis period for a year of assessment to any of its shareholders; and
(b) issues to any one of its shareholders a certificate which purports to show that an amount of tax has been deducted or is deemed to have been deducted under this section from a dividend paid, credited or distributed to that shareholder,
an amount equal to what would have been the total amount of tax deducted or deemed to have been deducted, if subsection (1) or
(2) has been applicable, from the gross amount of the dividend (ascertained in accordance with subsection (2)) paid, credited or distributed to all its shareholders at the time that the dividend was paid, credited or distributed to those shareholders shall be an amount due from the company to the Government and that amount shall be increased by an amount not exceeding the amount due; and the Director General shall serve on the Company a written requisition in the prescribed form calling upon the company to pay the amount due and the increase on the amount due, and that amount shall be a debt due from the company to the Government and shall be payable forthwith to the Director General upon the service of the requisition:
Provided that, where the company satisfies the Director General that such certificates have been issued only to particular shareholders specified by the company, that debt shall be reduced to an amount ascertained by reference to the certificates issued to those particular shareholders.
(11) Where in relation to a year of assessment there has been a payment of tax under section 103 or an instalment payment under section 107C or a refund of tax, the Director General may make—
(a) all such revisions of the compared total, the compared aggregate or the balance mentioned in subsection (8) (if any);
(b) all such repayments of the whole or any part of a debt paid in pursuant to subsection (6), (9) or (10); and
(c) all such requisitions under subsection (9) or (10), as appear to him to be appropriate in the circumstances.
(12) Paragraph 23(b) as to the day on which a dividend is to be treated as paid or distributed shall apply for the interpretation of this section and where this section has applied to a dividend which has been credited it shall not apply to that dividend when paid.
(13) Any debt due under this section shall be recoverable as if it were tax due and payable under this Act.
(14) In this section— “due date” has the same meaning as in subsection 103(12)(a);
“tax paid” means any payment of tax made by the company in the basis period for a year of assessment, whether or not paid through instalments under section 107C , less payments (if any) in respect of—
(a) the tax payable for the year of assessment 2000 on current year basis and prior years of assessment;
(b) any penalties imposed under subsection 112(3) or 113(2);
(c) any increase in tax under section 103, 107 B or 107C ; or
(d) any excess or any increase on the excess under section 108.
(14A) In this section, a reference to “tax refunded” or “a refund of tax” is a reference to—
(a) the amount of instalments that has been paid under section 107C for a year of assessment less the amount of tax payable (excluding any penalty imposed under section 112 or 113) for that year of assessment;
(b) the amount of tax payable (excluding any penalty imposed under section 112 or 113) discharged by virtue of the assessment that has been reduced or discharged: Provided that the amount of tax payable (excluding any penalty imposed under section 112 or 113) under that assessment has been paid; or
(c) the amount of tax paid under subsection 129(2).
(15) This section shall not apply to—
(a) a co-operative society;
(b) an offshore company in respect of a dividend paid, credited or distributed out of—
(i) income derived from an offshore business activity; or
(ii) income exempt from tax;
(c) a life insurer in respect his chargeable income which is subject to tax under Part VIII of Schedule 1; or
(d) a company limited by guarantee.
(16) Notwithstanding the foregoing subsections, where—
(a) the excess is increased by an amount under subsection
(7) or (9); or
(b) the amount due is increased by an amount under subsection (10),
the Director General may in his discretion, for any good cause shown, remit the whole or any part of that amount and, where the amount remitted has been paid, the Director General shall repay the same.
Deduction of tax from interest or royalty in certain cases
(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 interest of the kind referred to in paragraph 33 or 35 of Part I, Schedule 6) or royalty deduct therefrom 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:
Provided that the Director General may—
(a) give notice in writing to the payer requiring him to deduct and pay tax at some other rates or to pay or credit the interest or royalty without deduction of tax; or
(b) under special circumstances allow extension of time for tax deducted to be paid over.
(2) Where the payer fails to pay any amount due from him under subsection (1), that amount which he fails to pay shall be increased by an amount equal to ten per cent of the interest or royalty liable to deduction of tax under subsection (1) and the total sum shall be a debt due from him to the Government and shall be payable forthwith to the Director General.
(3) Where in pursuance of this section any amount is paid to the Director General by the payer or recovered by the Director General from the payer—
(a) the Director General shall, in the manner provided by section 110, apply that amount towards payment of the tax charged on the person to whom the payer was liable to pay the interest or royalty to which that amount relates; and
(b) if the payer has not deducted that amount in paying the interest or royalty with respect to which that amount relates, he may recover that amount from that person as a debt due to the payer.
(4) In this section “person” includes a partnership.
Application of sections 109 and 110 to income derived by a public entertainer
The provisions of sections 109 and 110 shall apply mutatis mutandis to remuneration or other income in respect of services performed or rendered in Malaysia by a public entertainer.
Deduction of tax from special classes of income in certain cases derived from Malaysia
(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, which is deemed to be derived from Malaysia, he shall, upon paying or crediting the payments, deduct therefrom 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 payment, render an account and pay the amount of that tax to the Director General:
Provided that the Director General may—
(i) give notice in writing to the payer requiring him to deduct and pay tax at some other rates or to pay or credit the payments without deduction of tax; or
(ii) under special circumstances, allow extension of time for tax deducted to be paid over.
(2) Where the payer fails to pay any amount due from him under subsection (1), that amount which he fails to pay shall be increased by an amount equal to ten per cent of the payments liable to deduction of tax under paragraph (1)(a), (b) or (c) and the total sum shall be a debt due from him to the Government and shall be payable forthwith to the Director General.
(3) Where in pursuance of this section any amount is paid to the Director General by the payer or recovered by the Director General from the payer—
(a) the Director General shall, in the manner provided by section 110, apply that amount towards payment of the tax charged on the person to whom the payer was liable to pay the payments to which the amount relates; and
(b) if the payer has not deducted that amount in paying the payment under subsection (1) with respect to which the amount relates, he may recover that amount from that person as a debt due to the payer.
(4) In this section “person” includes a partnership.
Deduction of tax from interest paid to a resident
(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 therefrom 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:
Provided that the Director General may under special circumstances, allow extension of time for tax deducted to be paid over.
(2) Where the payer fails to pay any amount due from him under subsection (1), the amount which he fails to pay shall be a debt due from him to the Government and shall be payable forthwith to the Director General.
(3) Where in pursuance of this section any amount is paid to the Director General by the payer and if the payer has not deducted that amount in paying the payment under subsection (1) with respect to which the amount relates, he may recover that amount from that individual as a debt due to the payer.
(4) In this section “person” refers to a bank or finance company licensed under the Banking and Financial Institutions Act 1989 [Act 372] or the Islamic Banking Act 1983 [Act 276], 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.
Deduction of tax on the distribution of income of a unit trust
(1) This section shall only apply to income of a unit trust which is exempt under section 61 A .
(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 therefrom 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:
Provided that the Director General may—
(a) give notice in writing to the payer requiring him to deduct and pay tax at any other rates or to distribute the income without deduction of tax; or
(b) under special circumstances, allow extension of time for the amount of tax deducted to be paid over.
(3) Where the payer fails to pay any amount due from him under subsection (2), that amount which he fails to pay shall be increased by an amount equal to ten per cent of the income liable to deduction of tax under that subsection and the total sum shall be a debt due from him to the Government and shall be payable forthwith to the Director General.
(4) Where in pursuance of this section any amount is paid to the Director General by the payer or recovered by the Director General from the payer—
(a) the Director General shall, in the manner provided by section 110, apply that amount towards payment of the tax charged on the unit holder to whom the pay distributes income to which that amount relates; and
(b) if the payer has not deducted that amount in distributing the income under subsection (2) with respect to which that amount relates, he may recover that amount from that unit holder as a debt due to the payer.
(5) Section 110 shall apply mutatis mutandis to tax deducted under this section.
Set-off for tax deducted
(1) Any tax which is deducted from any dividend under section 108 or from any interest or royalty under section 109 or from any payment for services, technical advice, assistance, or rental or other income under section 109B (including any amount recovered by the Director General pursuant to subsection 109(2) or 109B (2) but excluding any increase thereof) shall, when the dividend, interest, royalty, or payment for services, technical advice, assistance, or rental or other income is gross income of a person from a source of his for the basis period for a year of assessment, be set off against the tax charged on his chargeable income, if any, for that year.
(1 A ) Notwithstanding subsection (1), where tax on any dividend paid, credited or distributed in the basis period for a year of assessment has been deducted at a rate applicable for that year
of assessment and there is a revision in the rate of tax for companies for that year of assessment, the tax to be set off under subsection (1) shall be sum deemed to be the tax deducted from such dividend under subsection 108(3).
(1B )–(1 E) (Deleted by Act A1093).
(2) Subject to this section, where in relation to a year of assessment Chapter 3 or Part III has by virtue of section 41 applied to an accounting period as if it were the basis period for that year of assessment and any dividend, interest, royalty, services, technical advice, assistance, rental or other income has been included in the gross income of a person from a business of his for that accounting period, then—
(a) if that accounting period falls wholly within the basis period for that year of assessment, for the purposes of subsection (1), the dividend, interest, royalty, services, technical advice, assistance, rental or other income shall be treated as having been included in that person’s gross income from that business for that basis period for that year and regard shall be had to the tax deducted from that dividend, interest,royalty, services, technical advice, assistance, rental or other income;
(b) if that accounting period overlaps the basis period for that year of assessment—
(i) the dividend, interest, royalty, services, technical advice, assistance, rental or other income and the tax deducted therefrom shall be apportioned in the manner provided by subsection 41(2);
(ii) the part of the dividend, interest, royalty, services, technical advice, assistance, rental or other income so apportioned to the overlapping part of that accounting period shall be treated for the purposes of subsection
(1) as a dividend, interest, royalty, services, technical advice, assistance, rental or other income included in that person’s gross income from that business for the basis period for that year; and
(iii) in relation to that part of the dividend, interest, royalty, services, technical advice, assistance,
rental or other income so included regard shall be had for the purposes of subsection (1) to the part of that tax so apportioned to the overlapping part of that accounting period.
(3) Notwithstanding subsections (1) and (2), where any interest, royalty, services, technical advice, assistance, rental or other income is included in the gross income of a person from a business for the basis period for a year of assessment or, by virtue of section 41, for an accounting period as if it were the basis period for that year, then, if that interest, royalty, services, technical advice, assistance, rental or other income or a portion thereof is paid to that person after the end of that basis period or accounting period, as the case may be, that tax deducted therefrom shall be set off against any tax charged on his chargeable income for the year of assessment following that in which the interest, royalty, services, technical advice, assistance, rental or other income or the portion thereof was paid or, where there is no tax so payable, the tax so deducted shall be repaid to him.
(4) For the purposes of subsection (1), where by reason of any provisions of sections 55 to 59 any dividend, interest, royalty, services, technical advice, assistance, rental or other income is gross income of a person from a proprietorship or continuing proprietorship business of his for the basis period for a year of assessment, there shall be set off under subsection (1) only so much of the tax so deducted from that dividend, interest, royalty, services, technical advice, assistance, rental or other income as bears the same proportion to the amount of that tax as his share of the divisible income from that business for that period bears to the divisible income from that business for that period.
(5) For the purposes of subsections (1) and (2), where by reason of any provisions of sections 55 to 59 any dividend, interest, royalty, services, technical advice, assistance, rental or other income in gross income of a person from a proprietorship or continuing proprietorship business of his for an accounting period, then, with respect to the amount of the tax to which regard would be had under those subsections in relation to that person but for this subsection, regard shall be had only to the same proportion of that amount as his share of the divisible income from that business for that period bears to the divisible income from that business for that period.
(6) In any case to which subsection (4) or (5) applies, subsection (3) if applicable shall be modified accordingly.
(7) For the purposes of the foregoing subsections, where only a portion of any dividend, interest royalty, services, technical advice, assistance, rental or other income is gross income of a person from a source of his for the basis period for a year of assessment or for an accounting period treated as if it were the basis period for that year, regard shall be had to that portion and to so much of any tax deducted from that dividend, interest, royalty, services, technical advice, assistance, rental or other income as bears the same proportion to that tax as the amount of that portion of the dividend, interest, royalty, services, technical advice, assistance, rental or other income bears to the whole of the dividend, interest, royalty, services, technical advice, assistance, rental or other income, as the case may be; and accordingly, where this subsection applies—
(a) the reference in subparagraph (2)(b)(i) to the dividend, interest, royalty, services, technical advice, assistance, rental or other income shall be taken to be a reference to that portion thereof;
(b) the reference in subparagraph (2)(b)(i) to the tax shall be taken to be a reference to so much thereof as aforesaid; and
(c) the reference in subparagraph (2)(b)(ii) to the part of the dividend, interest, royalty, services, technical advice, assistance, rental or other income shall be taken to be to the part of that portion of the dividend, interest, royalty, services, technical advice, assistance, rental or other income.
(8) Any tax which is applicable to the statutory income of a person from his ordinary source in relation to a trust for a year of assessment (not being a share of the total income of the trust body for that year which has been deducted from that total income in ascertaining the chargeable income of the trust body for that year) shall, where the statutory income is included in the aggregate income of a person for a year of assessment, be set off against the tax charged on the chargeable income, if any, of that person for that year of assessment.
(9) For the purposes of subsection (8), the tax applicable to the statutory income for a year of assessment of a person from his
ordinary source in relation to a trust shall be taken for that year to be a sum which bears the same proportion to the amount of tax chargeable on the chargeable income of the trust body of the trust for that year (or, where the trust body is entitled to any relief under section 132 or 133 for that year, to that amount less the amount of that relief) as that person’s statutory income from his ordinary source for that year bears to the total income of the trust body for that year.
(9 A ) Notwithstanding subsections (8) and (9), where income distributed by a unit trust is included in the aggregate income of a person for a year of assessment, the tax chargeable on the unit trust and attributable to the income included in the aggregate income of that person (or, where the trust is entitled to any relief under section 132 or 133, that tax less the amount of that relief) shall be set off against the tax charged on the chargeable income, if any, of that person for that year of assessment.
(10) Where in any case to which subsection 68(4) applies any income received by a receiver is distributed to any person entitled thereto, and that income is gross income of that person from a source of his for the basis period for a year of assessment, any tax paid by the receiver and attributable to that gross income shall be set off against the tax charged on that person’s chargeable income for that year (the amount of any such tax which is so attributable being determined by the Director General).
(11) Where tax is set off under this section against the tax charged for any year of assessment or would have been so set off if there had been tax so charged, the tax so set off or which would have been so set off shall not be set off against the tax charged for any other year of assessment.
(12) Where paragraph 45(2)(a) applies to an individual and to a wife of his for a year of assessment, any reference in the foregoing subsections to a person shall, in the application of those subsections for that year to that individual and that wife, be taken to be a reference to that individual including that wife as if she were that individual and where paragraph 45(2)(b) applies, this subsection shall be applied accordingly.
(13) Where tax had been set off or is due to be set off under subsection (1) in relation to a dividend and the Director General discovers that the company which had paid, credited or distributed that dividend in respect of which tax has been deducted under subsection 108(1) or deemed to have been
deducted under subsection 108(2) had made no payment or had made insufficient payment of tax under section 103, or instalment payments under section 107 C or of the excess referred to in subsection 108(6) or (9), the Director General having regard to all the circumstances may if it appears to him to be necessary—
(a) assess that dividend on the basis of the net amount and no tax shall be set off under subsection (1) upon making an assessment on the shareholder; or
(b) make such assessment in accordance with section 91 on the shareholder where tax had been set off under subsection (1) in order to counteract any benefit obtained from the tax that had been set off and where such assessment is made, the shareholder shall be chargeable to tax on that dividend on the basis of the net amount and no tax shall be set off under subsection
(1).
Non-entitlement of an offshore company for set-off
Notwithstanding subsection 110(1), where an offshore company receives any dividend from which tax has been deducted under section 108, the tax so deducted shall not be set off against the tax charged on the chargeable income of the offshore company.
Refund of over-payments
(1) Subject to this section, where it is proved to the satisfaction of the Director General that any person has paid tax for any year of assessment (by deduction or otherwise) in excess of the amount payable under this Act, that person shall be entitled to have the excess refunded by the Government and, where that person is dissatisfied with the amount to be refunded to him, he may within thirty days of being notified of that amount appeal to the Special Commissioners as if the notification were a notice of assessment, the provisions of this Act relating to appeals applying accordingly within any necessary modifications.
(1A ) Where a company has furnished a return in accordance with subsection 77(1 A ) to the Director General for a year of assessment and that company has paid tax in excess of the amount payable—
(a) that return shall be deemed to be a notification under subsection (1); and
(b) that company is deemed to have been notified of the excess amount on the day that return is furnished.
(1 B ) Where subsection (1A) applies—
(a) the reference to tax shall be taken to be a reference to an amount of tax set-off under section 110; and
(b) the reference to amount payable shall be taken to be a reference to the amount of tax payable before taking into account the tax set-off under section 110.
(2) No claim for repayment under this section shall be valid unless it is made within six years after the end of the year of assessment to which the claim relates or, where the claim relates to repayment of tax charged by an assessment, within six years after the end of the year of assessment within which that assessment was made.
(3) Nothing in this section shall operate—
(a) to extend any time limit for appeal, validate any appeal which is otherwise invalid or authorize the revision of any assessment or other matter which has become final and conclusive; or
(b) to compel the Government to refund the excess amount of tax paid (by deduction or otherwise) in respect of an assessment unless the assessment has been finally determined.
(4) The representative of a disabled or deceased person shall be entitled to a refund under subsection (1) for the benefit of that person or his estate of any excess within the meaning of that subsection, and for the purposes of this subsection a payment of tax by the representative of such a person shall be deemed to have been made by that person.
(5) Without prejudice to subsection 108(11), a payment made in discharge or partial discharge of a debt of the kind mentioned in subsection 108(6), (9) or (10) shall be regarded as a payment of tax for the purposes of this section.
(6) In this section—
“disabled person” means a person who through incapacity, bankruptcy or liquidation or for any other reason is unable to manage his own affairs; “representative” means in the case of a deceased person, his executor, and, in the case of a disabled person, the guardian, committee, assignee in bankruptcy, liquidator or other person who manages or controls his estate, property, assets or affairs.
Non-entitlement of an offshore company to refund
Notwithstanding section 111, where tax has been deducted under section 108 from any dividend received by an offshore company, that offshore company shall not be entitled to have the tax so deducted refunded by the Government.
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).
