commencement of amendments to the Income tax Act 1967
() Sections 4, 6, 7, 8, 9, 0, , , 3, 4, 5, 6, 7, 9, 5, paragraph 30(a), section 3, paragraphs 3(a), (b), (c) and
(e) and section 33 have effect for the year of assessment 007 and subsequent years of assessment.
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() Section 5, paragraph 4(a), sections 6, 7, 8, 9 and paragraph 30(b) come into operation on January 007.
(3) Section 8 has effect for the year of assessment 006 and subsequent years of assessment.
(4) Section 0 comes into operation on the coming into operation of this Act.
(5) Sections , , 3, paragraph 4(b), paragraph 3(d) and section 34 are deemed to have come into operation on September 006.
Amendment of section 2
The income Tax Act 967, which is referred to as the “principal Act” in this chapter, is amended in section —
(a) in subsection ()—
(i) in the definition of “partnership”, by inserting after the words “in a partnership” the words “and any association which is established pursuant to a scheme of financing in accordance with the principles of Syariah”; and
(ii) in the definition of “public entertainer”, by substituting for the word “athlete” the word “sportsperson”; and
(b) in subsection (8), by substituting for the words “or the Securities commission” the words “, the Securities commission or the Labuan Offshore Financial Services Authority”.
Amendment of section 6
Subsection 6() of the principal Act is amended by substituting for paragraph (i) the following paragraph: “(i) subject to section 09d but notwithstanding any other provisions of this Act, income tax shall be charged for each year of assessment upon the income of a unit holder other than a unit holder which is a resident company which consists of income distributed by the unit trust referred to in section 6a at the appropriate rate as specified under Part X of Schedule provided that the rates specified under such Part shall apply only for a period of five years commencing from the year of assessment 007.”.
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Amendment of section 6A
Section 6a of the principal Act is amended—
(a) in subsections () and (4), by substituting for the words “, (3) and (3a)” the words “and (3)”; and
(b) by deleting subsection (3a).
deletion of section 6b
The principal Act is amended by deleting section 6b.
Amendment of section 13
Subsubparagraph 3()(b)(ii)(A) of the principal Act is amended by inserting after the words “leave passages” the words “including meals and accommodation”.
Amendment of section 22
Subsection () of the principal Act is amended—
(a) in subparagraph (a)(ii), by inserting after the semicolon the word “and”;
(b) by substituting for the words “; and” at the end of paragraph (b) a full stop; and
(c) by deleting paragraph (c).
Amendment of section 30
Subsection 30(4) of the principal Act is amended—
(a) by substituting for the word “and” at the end of paragraph
(a) the word “or”;
(b) by substituting for paragraph (b) the following paragraph: “(b) any allowance or aggregate amount of allowances has been made under section 4 in computing the statutory income of the relevant person from a business for the basis period for a year of
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assessment (that basis period being prior to the relevant period) in respect of any expenditure incurred under Schedule 3,”; and
(c) by inserting before the words “the amount released” the words “and the whole or any part of a debt in respect of any such outgoing, expense, sum, rent or expenditure is released in the relevant period,”.
Amendment of section 34
Subsection 34(6) of the principal Act is amended by substituting for paragraph (k) the following paragraph:
“(k) an amount equal to the expenditure incurred by the relevant person in the relevant period for sponsoring any arts, cultural or heritage activity approved by the Ministry of culture, Arts and Heritage:
Provided that the amount deducted in respect of expenditure incurred for sponsoring those activities shall not in aggregate exceed five hundred thousand ringgit of which the amount deducted in respect of expenditure incurred in sponsoring foreign arts, cultural or heritage activity shall not exceed two hundred thousand ringgit;”.
Amendment of section 35
Subsection 35() of the principal Act is amended by substituting for the words “sections 33, 34, 34a and 34b” the words “this Act”.
Amendment of section 39
Subsection 39() of the principal Act is amended—
(a) by inserting after subparagraph (l)(vii) the following subparagraph: “(viii) the provision of a benefit or amenity to an employee consisting of a leave passage to facilitate a yearly event within Malaysia which
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involves the employer, the employee and the immediate family members of that employee; or”; and
(b) in paragraph (m), by inserting after the words “(l)(i)” the words “and subject to subparagraph (l)(viii)”.
Amendment of section 43
Section 43 of the principal Act is amended by deleting subsection (5).
Amendment of section 44
Section 44 of the principal Act is amended—
(a) in paragraph ()(d), by substituting for the words “or (a)” the words “, (a), (b) or (C)”;
(b) in the proviso to subsection (6), by substituting for the word “five” the word “seven”;
(c) by substituting for subsection ( a ) the following subsection:
“( a ) There shall be deducted pursuant to this subsection from the aggregate income of a person other than an offshore company and individual for the relevant year reduced by any deduction for that year in accordance with subsection () an amount equal to the payment of zakat perniagaan which is paid in the basis period for that relevant year to an appropriate religious authority established under any written law or any person authorized by such religious authority:
Provided that the amount to be deducted pursuant to this subsection shall not exceed one-fortieth of the aggregate income of that person in the relevant year.”; and
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(d) by inserting after subsection ( a ) the following subsections: “(b) There shall be deducted from the aggregate income of a relevant person for the relevant year reduced by any deduction for that year in accordance with subsection () an amount equal to any gift of money or cost of contribution in kind made by the relevant person in the basis period for that year for any sports activity approved by the Minister or to any sports body approved by the commissioner of Sports appointed under the Sports Development Act 997 [Act 576]: Provided that the amount to be deducted pursuant to this subsection shall not exceed the difference between the amount of seven per cent of the aggregate income of the relevant person and the total amount that has been deducted pursuant to the proviso to subsection (6) and subsection (C).
(C) There shall be deducted from the aggregate income of a relevant person for the relevant year reduced by any deduction for that year in accordance with subsection () an amount equal to any gift of money or cost of contribution in kind made by the relevant person in the basis period for that year for any project of national interest approved by the Minister: Provided that the amount to be deducted pursuant to this subsection shall not exceed the difference between the amount of seven per cent of the aggregate income of the relevant person and the total amount that has been deducted pursuant to the proviso to subsection (6) and subsection (b).”.
Amendment of section 44A
Subsection 44 a (9) of the principal Act is amended by substituting for paragraph (b) the following paragraph: “(b) the surrendering company gives an incorrect information in the return furnished under section 77a in respect of the amount of adjusted loss surrendered, the Director General may, by a notice in writing, require the surrendering
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company to pay a penalty equal to the amount of tax which had or would have been undercharged by the claimant company in consequence of the incorrect information and where the surrendering company is dissatisfied with the penalty, the surrendering company may within thirty days of being notified appeal to the Special commissioners as if the notice were a notice of assessment and the provision of this Act relating to appeals shall apply accordingly with any necessary modifications.”.
Amendment of section 46
Section 46 of the principal Act is amended—
(a) in subsection ()—
(i) in paragraph (f), by inserting after the word “accounting” the words “, islamic financing”;
(ii) by deleting the word “and” at the end of paragraph
(h);
(iii) in paragraph (i)—
(A) by substituting for the words “seven hundred” the words “one thousand”; and
(B) by substituting for the full stop at the end of that paragraph the words “; and”; and
(iv) by inserting after paragraph (i) the following paragraph: “(j) an amount limited to a maximum of three thousand ringgit in respect of expenses expended or deemed expended under subsection (3) in the basis year for that year of assessment by that individual for the purchase of personal computer (not being a personal computer used for the purpose of his own business) as evidenced by receipt: Provided that the deduction under this paragraph shall not be allowed for the two following years of assessment.”; and
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(b) in subsection (3), by substituting for the words “and (i)” the words “, (i) and (j)”.
Amendment of section 60f
Subsection 60f() of the principal Act is amended—
(a) in the definition of “investment holding company”, by inserting after the words “gross income” the words “other than gross income from a source consisting of a business of holding of an investment”; and
(b) by inserting before the definition of “investment holding company” the following definition: ‘ “business of holding of an investment” means business of letting of property where a company in any year of assessment provides any maintenance or support services in respect of the property;’.
Amendment of section 61A
The principal Act is amended by substituting for subsection 61a() the following subsection— “() Where in the basis period for a year of assessment ninety per cent or more of the total income of the unit trust is distributed to the unit holder, the total income of the unit trust for that year of assessment shall be exempt from tax.”
Amendment of section 91
Paragraph 9(4)(a) of the principal Act is amended by inserting after the word “made” the words “under this Act or the Real Property Gains Tax Act 976 [Act 169]”.
Amendment of section 107A
Subsection 07 a () of the principal Act is amended by substituting for the words “an amount equal to ten per cent of the contract payment liable to deduction of tax under
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subsection () and the total sum” the words “a sum equal to ten per cent of the amount which he fails to pay, and that amount and the increased sum”.
Amendment of section 109
Subsection 09() of the principal Act is amended by substituting for the words “an amount equal to ten per cent of the interest or royalty liable to deduction of tax under subsection () and the total sum” the words “a sum equal to ten per cent of the amount which he fails to pay, and that amount and the increased sum”.
Amendment of section 109b
Subsection 09 b () of the principal Act is amended by substituting for the words “an amount equal to ten per cent of the payments liable to deduction of tax under paragraph ()(a),
(b) or (c) and the total sum” the words “a sum equal to ten per cent of the amount which he fails to pay, and that amount and the increased sum”.
Amendment of section 109d
Section 09d of the principal Act is amended—
(a) in subsection (), by substituting for the words “non-resident unit holder” the words “unit holder other than a unit holder which is a resident company”; and
(b) in subsection (3), by substituting for the words “an amount equal to ten per cent of the income liable to deduction of tax under that subsection and the total sum” the words “a sum equal to ten per cent of that amount, and the amount which he fails to pay and the increased sum”.
Amendment of section 111
Subsection ( a ) of the principal Act is amended by substituting for the words “subsection 77(a)” the words “section 77a”.
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new chapter 1A
The principal Act is amended by inserting after section 38 the following chapter:
“Chapter 1a—Ruling
Public ruling
138 A . () The Director General may at any time make a public ruling on the application of any provision of this Act in relation to any person or class of persons, or any type of arrangement.
() The Director General may withdraw, either wholly or partly, any public ruling made under this section.
(3) Notwithstanding any other provision of this Act, where a public ruling in subsection () applies to any person in relation to an arrangement and the person applies the provision in the manner stated in the ruling, the Director General shall apply the provision in relation to the person and the arrangement in accordance with the ruling.
Advance ruling
138b. () Subject to this section or any rules prescribed under this Act, on the application made by any person, the Director General shall make an advance ruling on the application of any provision of this Act to the person and to the arrangement for which the ruling is sought.
() An application under subsection () shall be made in the prescribed form and shall contain particulars as may be required by the Director General.
(3) The Director General may at any time withdraw any advance ruling made under subsection () by giving a notice in writing of such withdrawal to the person to whom the ruling applies.
(4) Notwithstanding any other provision of this Act, where an advance ruling applies to any person in relation to an arrangement and the person applies the provision in the manner stated in
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the ruling, the Director General shall apply the provision in relation to the person and that arrangement in accordance with the ruling.
(5) An advance ruling on any of the provision of this Act shall apply to a person in relation to an arrangement if the provision is expressly referred to in the ruling and for the basis period for year of the assessment for which the ruling applies.
(6) A ruling made under subsection () does not apply to a person in relation to an arrangement if—
(a) the arrangement is materially different from the arrangement stated in the ruling;
(b) there was a material omission or misrepresentation in, or in connection with the application of the ruling;
(c) the Director General makes an assumption about a future event or another matter that is material to the ruling, and that assumption subsequently proves to be incorrect; or
(d) the person fails to satisfy any of the conditions stipulated by the Director General.”.
Special provision relating to section 138A
Notwithstanding the provisions of section 38a of the principal Act, any public ruling that has been issued by the Director General prior to the coming into operation of the section, is deemed to have been made under that section and have effect for the year of assessment 007 and subsequent years of assessment.
Amendment of section 153
Section 53 of the principal Act is amended—
(a) by substituting for subsection (3) the following subsection: “(3) For the purposes of this Act, “tax agent” means any professional accountant or person, approved by the Minister.”; and
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(b) in subsection (4), by substituting for the words “paragraph
(3)(b) or (c)” the words “subsection (3)”.
Amendment of section 154
Subsection 54() of the principal Act is amended by inserting after paragraph (ea) the following paragraphs: “(eb) providing for the scope and procedure applied in relation to any ruling made under section 38a or 38b;
(ec) prescribing fees charged in relation to any ruling made under section 38b;”.
Amendment of Schedule 1
Schedule to the principal Act is amended—
(a) in Part i—
(i) in paragraph , by inserting after the words “a, ” the words “, a”; and
(ii) in paragraphs and a, by substituting for the word “8” wherever appearing the word “7”; and
(b) by substituting for Part X the following Part:
“Part X
. Notwithstanding Part i—
(a) and subject to paragraphs (b) and (c), income tax shall be charged for a year of assessment on the income of a unit holder other than a unit holder which is a resident company consisting of income distributed to the unit holder referred to in section 09d which is derived from Malaysia at the rate of 5% of gross;
(b) and subject to paragraph (c), income tax shall be charged for a year of assessment on the income of a unit holder which is a non-resident company consisting of income distributed to the unit holder referred to in section 09d which is derived from Malaysia at the rate of 7% of gross; and
(c) and income tax shall be charged for a year of assessment on the income of a unit holder which is a foreign institutional investor consisting of income distributed to the unit holder referred to in section 09d which is derived from Malaysia at the rate of 0% of gross.
Finance 9 . in this Part, “institutional investor” means a pension fund, collective investment scheme or such other person approved by the Minister.”.
Amendment of Schedule 3
Schedule 3 to the principal Act is amended—
(a) by deleting the words “culture, Arts and” at the end of paragraph 37f; and
(b) in paragraph 4b, by inserting after the word “Education” the words “or Minister of Higher Education”.
Amendment of Schedule 6
Schedule 6 to the principal Act is amended—
(a) in paragraph 5, by inserting after subparagraph () the following subparagraph: “(3) in this paragraph, “compensation for loss of employment” shall include any payment made by an employer to an employee of his pursuant to a separation scheme where employees are given an option for an early termination of an employment contract provided that such scheme from which payment was made does not expressly or impliedly provide for the employee to be reemployed under any other scheme of employment by the same or any other employer.”;
(b) by inserting after paragraph 5 b the following paragraph: “25c. Perquisite consisting of long service, past achievement or service excellence award, whether in money or otherwise, provided to an employee pursuant to his employment, limited to a maximum amount or value of one thousand ringgit for each employee for a year of assessment provided that exemption in respect of long service award shall apply only after the employee has exercised an employment for more than ten years with the same employer.”;
(c) in paragraph 3a, by inserting after the word “Education” the words “or Ministry of Higher Education”;
(d) by substituting for paragraph 33 the following paragraph: “33. income of any person not resident in Malaysia for the basis year for a year of assessment, in respect of interest derived
0 Laws of Malaysia Act 661 from Malaysia (other than such interest accruing to a place of business in Malaysia of such person) and paid or credited by any person (whether the same person or not) carrying on the business of banking or finance in Malaysia and licensed under the Banking and Financial institutions Act 989 or the islamic Banking Act 983, or by any other institution approved by the Minister:
Provided that the exemption under this paragraph shall not apply to interest paid or credited on funds required for purposes of maintaining net working funds as prescribed by the central Bank of Malaysia pursuant to section 37 of the Banking and Financial institutions Act 989 and subsection 5() of the islamic Banking Act 983, as the case may be.”; and
(e) by substituting for paragraph 34 the following paragraph:
“34. () income of an individual derived from exercising an employment on board a ship used in a business operated by a person being a registered owner of a ship under the Merchant Shipping Ordinance 95 who is resident in Malaysia.
() For the purpose of this paragraph “ship” means a seagoing ship other than a ferry, barge, tug-boat, supply vessel, crew boat, lighter, dredger, fishing boat or other similar vessel.”.
Amendment of Schedule 7
Schedule 7 to the principal Act is amended—
(a) in paragraph 5, by inserting after the words “proportion as” the words “his statutory income in respect of”; and
(b) in paragraph 6, in the definition of “foreign income”, by inserting after the word “Malaysia” the words “or in the case of bilateral credit, includes income derived from Malaysia charged to foreign tax”.
Amendment of Schedule 7A
Schedule 7a to the principal Act is amended in the proviso to paragraph 3, by inserting after the words “the Federal Territory of Labuan,” the words “Perlis,”.
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).
