Commencement of amendments to the Income Tax Act 1967
(1) Sections 4, 6, 7, 9, 11, 12, 21 and 22, paragraphs 23(a) and (c), sections 24 and 25 have effect for the year of assessment 2012 and subsequent years of assessment.
(2) Section 5 comes into operation from 1 January 2012 until 31 December 2016.
(3) Sections 8, 13, 15, 16, 17 and 19 come into operation on 1 January 2012.
(4) Section 10 comes into operation from the year of assessment 2012 until the year of assessment 2021.
(5) Section 18 has effect from the year of assessment 2013.
(6) Section 14 comes into operation on the coming into operation of this Act.
(7) Section 20 comes into operation on the coming into operation of the amendment to section 6a of the Inland Revenue Board of Malaysia Act 1995 [Act 533].
(8) Paragraph 23(b) is deemed to have effect from the year of assessment 2011.
Amendment of section 2
The Income Tax Act 1967, which is referred to as the “principal Act” in this Chapter, is amended—
(a) in subsection 2(1)—
(i) in the definition of “approved scheme”, by inserting after the words “Employees Provident Fund” the words “, private retirement scheme”; and
(ii) by inserting after the definition of “prescribed” the following definition: ‘ “private retirement scheme” means a retirement scheme approved by the Securities Commission in accordance with the Capital Markets and Services Act 2007 [Act 671];’; and
(b) in subsection 2(8), by substituting for the words “or the Labuan Offshore Financial Services Authority” the words “, the Labuan Financial Services Authority or the Malaysia Co-operative Societies Commission”.
Amendment of section 6
Paragraph 6(1)(i) of the principal Act is amended by substituting for the words “three years from the year of assessment 2009” the words “five years from the year of assessment 2012”.
Amendment of section 6a
Paragraph 6a(2)(c) of the principal Act is amended in the proviso by inserting after the words “Part XIV” the words “or XV”.
Amendment of section 34b
Subsection 34b(4) of the principal Act is amended—
(a) by substituting for paragraph (c) the following paragraph:
“(c) a “contract research and development company” and a “research and development company” have the same meaning assigned thereto in section 2 of the Promotion of Investments Act 1986 and fulfills the conditions specified by the relevant Ministry;”; and
(b) by inserting after paragraph (c) the following paragraph:
“(d) a “related company” has the meaning assigned to it in section 2 of the Promotion of Investments Act 1986.”.
Amendment of section 39
Section 39 of the principal Act is amended by inserting after subsection (2) the following subsection:
“(3) Paragraphs (1)(f), (i) and (j) shall not apply if for a year of assessment a person is exempt under paragraph 127(3)
(b) or subsection 127(3a) or the Promotion of Investments Act 1986, in respect of all income of that person from all sources not being exemption on income equal to capital expenditure incurred.”.
Amendment of section 45
Section 45 of the principal Act is amended by substituting for subsection (5) the following subsection:
“(5) The election referred to in subsection (2) shall be made in a return furnished in accordance with subsection 77(1).”.
Amendment of section 49
Section 49 of the principal Act is amended—
(a) in subsection (1)—
(i) in paragraph (a), by deleting the words “or deferred annuity”; and
(ii) in paragraph (b), by substituting for the words “or the Employees Provident Fund as the case may be” the words “(other than a private retirement scheme)”;
(b) in subsection (1a)—
(i) by deleting paragraph (a); and
(ii) in paragraph (b), by deleting the words “or where paragraph (a) applies, shall not exceed seven thousand ringgit”; and
(c) by inserting after subsection (1 c ) the following subsections:
“(1d) In the case of an individual resident for the basis year for a year of assessment who has—
(a) paid any deferred annuity; or
(b) made or suffered the making of a contribution to a private retirement scheme,
there shall be allowed for that year of assessment a deduction of the aggregate amount of the payments or contribution or both or a deduction of three thousand ringgit whichever is the less.
(1e) For the purposes of subsection (1d), where subsection 50(2) or (3) applies, the total deduction under that subsection shall not exceed three thousand ringgit.”.
Amendment of section 54a
Section 54a of the principal Act is amended—
(a) in subsection (1), by substituting for the words “the statutory income” the words “seventy per cent of the statutory income of that person”; and
(b) by substituting for subsection (2) the following subsection:
“(2) Notwithstanding the provisions of this Act—
(a) the income derived from each Malaysian ship referred to under subsection (1) shall be treated as income from a separate and distinct business source of that person;
(b) the adjusted loss (if any) of the person for any year of assessment in respect of a source consisting of a Malaysian ship shall not be available as a deduction in arriving at the total income of that person for that year of assessment;
(c) an amount of statutory income of a person from a source consisting of a Malaysian ship referred to in paragraph (b) which is exempt under this section for the following year of assessment shall be reduced by the adjusted loss referred to in that paragraph, and if by reason of insufficiency or absence of that statutory income, the amount of adjusted loss which has not been so utilized shall further reduce the amount of statutory income of that person from that source which is exempt under this section for any subsequent years of assessment until the amount of adjusted loss is fully utilized; and
(d) an amount of statutory income of a person for a year of assessment from a source consisting of a Malaysian ship which is not exempt under this section shall be deemed to be the total income of that person.”.
Amendment of section 60
Section 60 of the principal Act is amended—
(a) by substituting for subsection (10 a ) the following subsection: “(10a) Notwithstanding subsections (10), 43(2) and 44(2), any adjusted loss of the life fund for the basis period for a year of assessment of an insurer shall only be available as a deduction against the statutory income of the life fund of the insurer for subsequent years of assessment until fully utilized.”; and
(b) by inserting after subsection (10 c ) the following subsection: “(10d) In arriving at the total income of an insurer for a year of assessment, the adjusted loss from a source or sources of an insurer for that year of assessment other than from a source consisting of a life fund, shall be available as deduction against the aggregate statutory income (excluding the statutory income from a source consisting of a life fund) of an insurer, and any unabsorbed loss ascertained under subsection 44(4) or (5) for that year of assessment shall not be deducted against the statutory income of the life fund of the insurer for the subsequent years of assessment.”.
Amendment of section 67
Section 67 of the principal Act is amended by inserting after subsection (4) the following subsection:
“(4a) For the purposes of subsection (4), where a representative is a person appointed as an agent under section 68, the Director General may, by way of a notice in writing, require the representative to remit to him any accessible moneys for the purpose of payment of any tax due from the principal or for any debt so due referred to in that subsection, notwithstanding that no assessment in respect of such tax has been made in the name of the representative:
Provided that the accessible moneys shall not include any moneys held by the representative in his custody and control on behalf of the principal.”.
Amendment of section 81
Section 81 of the principal Act is amended by inserting after the word “possession” the words “or control”.
New section 83a
The principal Act is amended by inserting after section 83 the following section:
“Duty to furnish particulars of payment made to an agent, etc.
83a. (1) Every company shall for each year prepare and provide to each of its agent, dealer or distributor a copy of the form prescribed by the Director General containing—
(a) particulars of payment (whether in monetary form or otherwise) made during that year of assessment to that agent, dealer or distributor;
(b) name and address of that agent, dealer or distributor; and
(c) such other particulars as may be required by the Director General.
(2) For the purpose of subsection (1), the prescribed form shall be provided to the agent, dealer or distributor not later than 31 March in the year immediately following the year mentioned in that subsection.
(3) The company shall keep and retain the prescribed form in safe custody and shall make it readily accessible to the Director General.
(4) In this section, “agent”, “dealer” or “distributor” means any person who is authorised by a company to act as its agent, dealer or distributor, and who receives payment (whether in monetary form or otherwise) from the company arising from sales, transactions or schemes carried out by him as an agent, dealer or distributor.”.
Amendment of section 97a
Section 97a of the principal Act is amended by substituting for subsection (1) the following subsection:
“(1) Where in ascertaining the chargeable income of a person, it appears to the Director General that—
(a) no assessment shall be made in respect of that person for any year of assessment by reason of—
(i) absence of adjusted income, statutory income, aggregate income or total income of a person from any of his sources of income; or
(ii) exemption granted to that person under this Act or the Promotion of Investments Act 1986; or
(b) assessment has been made in respect of that person, but that person has no statutory income from a source consisting of a business,
the Director General may notify that person in writing—
(i) in respect of paragraph (a), that no assessment shall be made for that year of assessment and provide a computation with regard to it; or
(ii) in respect of paragraph (b), the adjustment, if any, made in respect of that source consisting of a business and provide a computation with regard to it.”.
Amendment of section 109e
Subsection 109 e (4) of the principal Act is amended 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 the amount which he fails to pay, and that amount and the increased sum”.
New section 111d
The principal Act is amended by inserting after section 111c the following section:
“Compensation for over-payment of tax
111d. (1) Subject to this section and subsection 111(4a), an amount of compensation may be payable to a person if the amount refunded to that person for a year of assessment under section 111 is made after—
(a) ninety days from the date a return for that year of assessment is required to be furnished under this Act, in the case of return furnished by way of electronic transmission; or
(b) one hundred and twenty days from the date a return for that year of assessment is required to be furnished under this Act, in any other case.
(2) For the purposes of this section—
(a) the “amount refunded” refers to tax paid in accordance with section 107, 107 b or 107 c for a year of assessment in excess of tax payable, if any, for that year of assessment as specified in a return furnished under section 77 or 77a; and
(b) the amount of compensation shall be determined in accordance with the following formula:
A x B x 2% C
where A is the amount refunded under section 111 for a year of assessment;
B is the number of days beginning from the first day after the period specified under paragraph
(1)(a) or (b), as the case may be, until the day that amount is made to a person; and
C is the number of days in a year.
(3) Without prejudice to sections 91 and 113, where the Director General discovers that the whole or part of the compensation—
(a) is wrongly paid to a person, the Director General may require from that person a return of such amount already paid; or
(b) ought not to have been paid to that person by reason of an incorrect return or incorrect information furnished by that person, the Director General may require from that person a return of such amount already paid and that amount shall without any further notice be increased by a sum equal to ten per cent of that amount which ought not to have been paid,
and the amount of compensation wrongly paid or ought not to have been paid and the sum increased shall be recoverable as if it were tax due and payable under this Act.
(4) This section shall not apply—
(a) if a person fails to furnish return for a year of assessment in accordance with section 77 or 77a;
(b) in respect of excess of amount payable referred to in subsections 111(1a) and (1b); or
(c) if a person appeals against an assessment under section 99.”.
Amendment of section 120
Paragraph 120(1)(b) of the principal Act is amended by inserting after the words “subsection 83(1 a )” the words “or 83a(1)”.
Amendment of section 134
Section 134 of the principal Act is amended—
(a) in subsection (1 a ), by substituting for the words “section 6a” the words “subsection 6a(1)”;
(b) by inserting after subsection (1 a ) the following subsection:
“(1b) The deputy chief executive officers of the Inland Revenue Board of Malaysia appointed under subsection 6a(1a) of the Inland Revenue Board of Malaysia Act 1995 shall be the Deputy Directors General of Inland Revenue.”; and
(c) in subsection (2)—
(i) by substituting for the words “Minister” the words “Inland Revenue Board of Malaysia”; and
(ii) by deleting paragraph (a).
Amendment of Schedule 1
Schedule 1 to the principal Act is amended by inserting after Part XIV the following Part:
“Part XV 1. Notwithstanding Part I, income tax shall be charged for a specified year of assessment on the chargeable income of an approved individual under the Returning Expert Programme in respect of having or exercising employment with a person in Malaysia at the rate of 15 per cent on every ringgit of that chargeable income.
2. In this Part—
(a) an approved individual and the specified year of assessment referred to in paragraph 1; and
(b) where the individual has income from a source other than the employment referred to in paragraph 1 or where subsection 45(2) applies, the chargeable income of the individual referred to in that paragraph,
shall be as determined by the Minister by rules made under this Act.”.
Amendment of Schedule 4b
Paragraph 5 of Schedule 4b to the principal Act is amended by deleting the words “or 4a”.
Amendment of Schedule 7a
Schedule 7a to the principal Act is amended—
(a) in the proviso to paragraph 3, by deleting the words “where the qualifying project is located within the States of Sabah, Sarawak, the Federal Territory of Labuan, Perlis, the Eastern Corridor of Peninsular Malaysia and such other areas which the Minister may from time to time determine or”;
(b) in paragraph 7—
(i) by substituting for subparagraph (b) the following subparagraph:
“(b) for the basis period for which the company has been granted approval for investment tax allowance under the Promotion of Investments Act 1986 in respect of a promoted activity or promoted product for the period prescribed under the relevant provisions of that Act;”;
(ii) in subparagraph (d), by substituting for the words “the period” the words “the basis period”; and
(iii) by substituting for subparagraph (e) the following subparagraph:
“(e) for the basis period for which the company has been granted approval under section 31c of the Promotion of Investments Act 1986 prior to the coming into operation of section 37 of the Promotion of Investments (Amendment) Act 2007 [Act A1318] in respect of a manufacturing activity or manufactured product for the period prescribed under paragraph 31e(2)(b) of that Act.”; and
(c) in paragraph 9—
(i) by deleting the definition of “Eastern Corridor of Peninsular Malaysia”; and
(ii) by inserting after the definition of “disposed of” the following definition:
‘ “factory” means portion of the floor areas of a building or an extension of a building used for the purposes of qualifying project to place or install plant or machinery or to store any raw material, or goods or materials manufactured prior to sale:
Provided that in respect of portion of the building or extension of the building used for the storage of raw material, or goods or materials, or both, it shall not be more than one-tenth of the total floor areas of that building or extension;’.
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).
