Provided that in the case of inward re-takaful business or offshore takaful business, no deduction shall be allowed on any share of profits distributed or credited to the participant or shareholders' fund for that period out of any of the operator's inward fund or offshore fund, as the case may be.

(9) The adjusted income of the shareholders' fund, for the basis period for a year of assessment of an operator resident for the basis year for that year of assessment shall be ascertained by--

(a) taking the aggregate of--

(i) the amount of gross income for that period from the investments made by the operator out of any of the shareholders' funds;

(ii) the amount of any gross proceeds (whether or not of an income nature) which are not gross income to which subparagraph (i) applies and which are first receivable in that period in connection with the realization of the investments or any right arising from them;

(iii) the amount of gross income for that period in respect of wakalah fee or any other fee receivable in connection with the general fund, inward re-takaful fund, offshore fund or family re-takaful fund, or any other fee receivable in respect of an investment fund from the family fund;

(iv) any amount of qard recovered by him in that period in connection with the family fund;

(v) the amount of gross income for that period in respect of profits from investments distributed or credited from family fund, or in respect of profits distributed or credited from general fund or family re-takaful fund; and

(vi) the amount of actuarial surplus from the family fund that is transferred to the shareholders' fund; and

(b) deducting from that aggregate--

(i) where subparagraph (a)(ii) is applicable for that period to gross proceeds receivable in connection with any investment or right, the cost of acquiring and realizing the investments or rights;

(ii) so much of the amount of qard incurred in that period in connection with the family fund;

(iii) the amount of management expenses incurred by him in that period in connection with his general business carried out in accordance with the principle of wakalah; and

(iv) commission payable and discounts allowed by him in that period in connection with his general business carried out in accordance with the principle of wakalah.

(10) The adjusted income of the shareholders' fund, for the basis period for a year of assessment of an operator not resident for the basis year for that year of assessment shall, where that business is wholly or partly carried on in Malaysia be ascertained by--

(a) taking the aggregate of--

(i) the amount of gross income for that period from the investments made by the operator out of any of the shareholders' funds;

(ii) the amount of any gross proceeds (whether or not of an income nature) which are not gross income to which subparagraph (i) applies and which are first receivable in that period in connection with the realization of the investments or any right arising from them;

(iii) the amount of gross income for that period in respect of wakalah fee or any other fee receivable in connection with the general fund, inward re-takaful fund, offshore fund or family re-takaful fund, or any other fee receivable in respect of an investment fund from the family fund;

(iv) any amount of qard recovered by him in that period in connection with the family fund;

(v) the amount of gross income for that period in respect of profits from investments distributed or credited from family fund, or in respect of profits distributed or credited from general fund or family re-takaful fund; and

(vi) the amount of actuarial surplus from the family fund that is transferred to the shareholders' fund; and

(b) deducting from that aggregate--

(i) where subparagraph (a)(ii) is applicable for that period to gross proceeds receivable in connection with any investment or right, the cost of acquiring and realizing the investments or rights;

(ii) so much of the amount of qard incurred in that period in connection with the family fund

(iii) the amount of management expenses incurred by him in that period in connection with his general business carried out in accordance with the principle of wakalah; and

(iv) commission payable and discounts allowed by him in that period in connection with his general business carried out in accordance with the principle of wakalah.

(10A) For the purposes of ascertaining the adjusted income of the family fund, general fund or shareholders' fund referred to in subsection (3), (4),(5), (7), (9) or (10), as the case may be, the cost of acquiring and realizing any investments or rights for the basis period for a year of assessment shall include expenses incurred in managing those investments or rights, and such expenses incurred shall be determined in accordance with the following formula:

A/B x C

(11) The adjusted income as ascertained under subsections (9) and (10) shall be deemed to be the statutory income from that source.

(12) Where an operator carrying on general business has re-takaful the risks or part of the risks with a re-takaful operator who either does not carry on the business of takaful of that kind in Malaysia or does not re-takaful the risks through a branch in Malaysia, there may be deducted under subparagraph (5)(b)(ii) or (7)(b)(ii) in respect of such risks which are re-takaful only ninety-five per cent of the amount which would otherwise be deductible:

Provided that in the case where subsection (7) or (8) apply (other than in the case of family solidarity re-takaful business), the operator may elect that no deductions shall be made under subparagraph (7)(b)(ii) and if he does so--

(a) the election shall be irrevocable and shall apply in relation to the basis period for the year of assessment for which it is made and for the basis periods for all subsequent years of assessment; and

(b) amounts recoverable under re-takaful contracts shall be disregarded for the purposes of subparagraph (7)(a) (iv). 

(13) Where an operator in connection with his family business or his general business receives any incidental gross income (not being a contribution on a certificate issued in the course of carrying on that family or general business) for which subsections (3) to (10) and subsection (12) do not provide, that income shall be treated as income of the operator falling under paragraph 4(f) and he shall be deemed to have a separate source in respect of it.

(14) Where under this section all such deductions as would be made in computing what would have been the adjusted income for the basis period for a year of assessment from takaful business of an operator if any such adjustment income had been ascertainable exceed the aggregate of the amounts from which those deductions would otherwise have been made, the amount of the excess shall be taken to be the amount of his adjusted loss from that business for that period.

(15) Notwithstanding subsection (14) and subsection 43(2), any unabsorbed losses of the family fund shall only be available for deduction against the statutory income for the basis period for a year of assessment and subsequent years of assessment in respect of the family fund of the operator.

(15A) In arriving at the total income of an operator for a year of assessment--

(a) the adjusted loss from a source or sources of an operator for that year of assessment other than from a source consisting of a family fund, shall be available as deduction against the aggregate statutory income (excluding the statutory income from a source consisting of a family fund) of an operator; and

(b) 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 family fund of the operator for the subsequent years of assessment. 

(16) Notwithstanding paragraph 75 of Schedule 3, any unabsorbed allowances of the family fund shall only be available for deduction against the adjusted income for the basis period for a year of assessment and subsequent years of assessment in respect of the family fund of the operator.

(17) Allowances under Schedule 3 shall only be available for deduction against the adjusted income of the family fund and the balance of such allowances shall not be available as a deduction against the adjusted income of the shareholders' fund.

(18) Any income which is distributed or credited to a participant under this section shall be deemed to be derived from Malaysia.

(19) The chargeable income in respect of the family fund as determined under subsections (3) and (4) is subject to tax as specified under Part XII of Schedule 1.

(20) Where an operator carries on inward re-takaful business or offshore takaful business in conjunction with other takaful businesses, the part of the chargeable income for a year of assessment which is attributable to that inward re-takaful business or offshore takaful business shall consist of an amount which bears the same proportion to the chargeable income for that year of assessment of the operator as the part of the aggregate income which relates to the inward re-takaful business or offshore takaful business bears to the whole of the aggregate income for that year of assessment from all sources of the operator.

(21) The amount arrived at under subsection (20) shall be treated as his chargeable income for a year of assessment of an operator from inward re-takaful business or offshore takaful business for the purposes of paragraph 4 of Part I of Schedule 1.

(22) As soon as any amount of chargeable income from the inward re-takaful business or offshore takaful business of an operator, being a company resident for the basis year for a year of assessment, has been subject to income tax at the rate of five per cent--

(a) the net amount of that income (after deduction of such tax) shall be credited to an account (that account and company being referred to as the exempt account and the relevant company respectively); and

(b) paragraph 5 (except subparagraph (1) thereof) and paragraph 6 of Schedule 7A shall apply as if any reference in those paragraphs to any income exempted or which has become exempt under pargaraph 3 were a reference to income credited to the exempt account. 

(23) In this section--

"contributions"

means takaful instalment payable by participants;

"family solidarity"

means takaful business for the benefit of the individual and his family;

"general business"

means any takaful business which is not family business;

"general certificate"

means a certificate other than a family solidarity certificate;

"investment"

includes any accretions thereto;

"inward re-takaful"

means any re-takaful of a risk under a certificate where the risk is outside Malaysia and the original takaful certificate--

(a) is issued by an operator not resident in Malaysia and not by a branch in Malaysia of such operator; or

(b) is issued by a branch outside Malaysia of an operator resident in Malaysia, and where any risk is in transit in Malaysia it shall be deemed to be outside Malaysia;

"inward re-takaful contract"

means a Malaysian certificate in respect of inward re-takaful;

"Malaysian certificate"

means any Malaysian certificate entered in the Register established by the operator pursuant to section 15 of the Takaful Act 1984;

"Malaysian family solidarity fund"

means the fund in respect of Malaysian family certificate;

"offshore takaful"

means takaful of a risk under a certificate where the risk is outside Malaysia and the takaful certificate is issued by a takaful operator resident in Malaysia or by a branch in Malaysia of a takaful operator not resident in Malaysia, and where any risk is in transit in Malaysia it shall be deemed to be outside Malaysia;

"operator"

means a company which carries on takaful business, including a company that solely carries on re-takaful business;

"participant"

includes, where a certificate has been assigned, the assignee for the time being and, where he is entitled as against the operator to the benefit of the certificate, the personal representative of a deceased participant;

"qard"

means a benevolent loan made from the shareholders' fund to the family fund to fulfill a short term financial need of the family fund which shall be repaid by the family fund;

"re-takaful"

has the same meaning assigned to it under section 2 of the Takaful Act 1984;

"takaful"

has the same meaning assigned to it under section 2 of the Takaful Act 1984;

"takaful business"

has the same meaning assigned to it under section 2 of the Takaful Act 1984;

"takaful certificate"

includes any contract of takaful for family solidarity business or general business whether or not embodied in or evidenced by an instrument in the form of a certificate, and references to issuing a certificate shall be construed accordingly;

"wakalah fee"

means a fee in respect of a contract which gives the power to a person to nominate another person to act on his behalf based on agreed terms and conditions.

(24) For the purpose of this section, an operator's reserve fund for unexpired risks at the end of a basis period shall consist of--

(a) twenty-five per cent of the difference between the gross contributions first receivable by him in that period in respect of marine, aviation or transit certificates issued by him and the amount deducted under subparagraph (5)(b)(ii) or (7)(b)(ii); and

(b) an amount calculated based on the method of computation as determined by the relevant authority regulating the takaful industry and which is consistently applied to contributions first receivable by him in that period in respect of other general certificates issued by him less the amount deducted under subparagraph (5)(b)(ii) or (7)(b)(ii). 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/60AB.Chargeable income of life fund subject to tax

60AB. Chargeable income of life fund subject to tax

The chargeable income in respect of the life fund as determined under subsections 60(3) and 60(4) is subject to tax as specified under Part VIII of Schedule 1.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/60B.Offshore insurance: chargeable income, reduced rate and exempt dividend

60B. Offshore insurance: chargeable income, reduced rate and exempt dividend

(1) (a) Where an insurer carries on offshore insurance business in conjunction with other insurance businesses, the part of the chargeable income for a year of assessment which is attributable to that offshore insurance business shall consist of an amount which bears the same proportion to the chargeable income for that year of assessment of the insurer as the part of the aggregate income which relates to the offshore insurance business bears to the whole of the aggregate income for that year of assessment from all sources of the insurer; and

(b) the amount arrived at under paragraph (a) shall be treated as the chargeable income for a year of assessment of an insurer from offshore insurance business for the purposes of paragraph 3 of Part I of Schedule 1. 

(2) As soon as any amount of chargeable income from the offshore insurance business of an insurer (being a company) resident for the basis year for a year of assessment has been subject to income tax at the rate of five per cent--

(a) the net amount of that income (after deduction of such tax) shall be credited to an account (that account and company being referred to as the exempt account and the relevant company respectively); and

(b) paragraph 5 (except subparagraph (1) thereof) and paragraph 6 of Schedule 7A shall apply as if any reference in those paragraphs to any income exempted or which has become exempt under paragraph 3 were a reference to income credited to the exempt account. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/60C.Banking business

60C. Banking business

Where a person who is resident for the basis year for a year of assessment carries on a business of banking in Malaysia and elsewhere, his gross income and adjusted income or adjusted loss for the basis period for that year of assessment from that business and his statutory income for that year of assessment from that business shall be ascertained by reference to his income therefrom wherever accruing or derived excluding the gross income, adjusted income or adjusted loss and statutory income attributable to an offshore business activity of a licensed Malaysian offshore bank.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/60D.Banking business

60D. Banking business

(Deleted by Act 600).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/60E.Banking business

60E. Banking business

(Deleted by Act 624).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/60F.Investment holding company

60F. Investment holding company

(1) Where an investment holding company is resident for the basis year for a year of assessment there shall be deducted in arriving at the total income before any deduction falling to be made under paragraph 44(1)(c) an amount in respect of expenses incurred by that company in the basis period for that year of assessment, which amount shall be determined in accordance with the formula--

where A is the total of the permitted expenses incurred for that basis period reduced by any receipt of a similar kind;

B is the gross income consisting of dividend, interest and rent chargeable to tax for that basis period; and

C is the aggregate of the gross income consisting of dividend and interest (whether such dividend or interest is exempt or not) and rent, and gains made from the realization of investments for that basis period:

Provided that--

(a) the amount of deduction to be made shall not exceed five per cent of the gross income consisting of dividend, interest and rent for that basis period; and

(b) where, by reason of an absence or insufficiency of aggregate income for that year of assessment, effect cannot be given or cannot be given in full to any deduction falling to be made to the investment holding company under this section for that year, that deduction which has not been so made shall not be made to the investment holding company for any subsequent year of assessment. 

(1A) Notwithstanding any other provision of this Act, where in any year of assessment income of an investment holding company consists of--

(a) income from the holding of investment, it shall not be treated as income from a source consisting of a business; or

(b) income other than income from the holding of investment, it shall be treated as gains or profits under paragraph 4(f). 

(1B) If it is shown that it has been established as between the Director General and the company for any tax purposes that the company is an investment holding company for the basis period for any year of assessment it shall be presumed until the contrary is proved that the company is an investment holding company for the purpose of this Act for the basis period for every subsequent year of assessment.

(1C) This section shall not apply to an investment holding company referred to in section 60FA.

(2) In this section--

"business of a 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;

"dividend"

is deemed to include income distributed by a unit trust;

"investment holding company"

means a company whose activities consist mainly in the holding of investments and not less than eighty per cent of its gross income other than gross income from a source consisting of a business of holding of an investment (whether exempt or not) is derived therefrom;

"permitted expenses"

means expenses incurred by an investment holding company in respect of--

(a) directors' fees;

(b) wages, salaries and allowances;

(c) management fees;

(d) secretarial, audit and accounting fees, telephone charges, printing and stationary costs and postage; and

(e) rent and other expenses incidental to the maintenance of an office, which are not deductible under subsection 33(1).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/∗60FA.∗Investment holding company listed on Bursa Malaysia

*60FA.^* Investment holding company listed on Bursa Malaysia

(1) The provisions of this section shall apply notwithstanding any other provisions of this Act.

(2) Where an investment holding company is a company resident for the basis year for a year of assessment and listed on the Bursa Malaysia in the basis period for that year of assessment, income of that investment holding company from the holding of investment in that basis period shall be treated as gross income of that investment holding company from a source consisting of a business for that year of assessment.

(3) For the purpose of subsection (2)--

(a) in ascertaining for a year of assessment the adjusted income of an investment holding company from a source referred to in that subsection, any amount of deduction to be made under this Act in arriving at that income shall only be allowed against the gross income from that source but--

(i) where in that year of assessment that source does not produce any income, any deduction in respect of that source shall be disregarded for the purposes of this Act; or

(ii) where that amount of deduction exceeds the gross income from that source for that year of assessment, the excess shall be disregarded for the purposes of this Act; and

(b) in ascertaining for a year of assesssment the statutory income of an investment holding company from a source referred to in that subsection, any allowance for that year of assessment falling to be made to that company under Schedule 3 in respect of that source shall only be available against the adjusted income of that person from that source and if by reason of an absence or insufficiency of adjusted income from that source for the basis period for that year of assessment, effect cannot be given or be given in full to any allowance for that year of assessment in relation to that source, that allowance which has not been so made shall not be made to that company for subsequent years of assessment. 

(4) If it is shown that it has been established between the Director General and the company for any tax purposes that the company is an investment holding company for the basis period for any year of assesssment it shall be presumed until the contrary is proved that the company is an investment holding company for the purpose of this Act for the basis period for every subsequent year of assessment.

(5) In this section, "investment holding company" has the same meaning assigned to it under section 60F.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/60G.Foreign fund management company

60G. Foreign fund management company

(1) Where a foreign fund management company carries on business in Malaysia of providing fund management services to foreign and local investors, the income derived from the provision of fund management services to foreign investors shall be treated as a separate and distinct business source from that source of income derived from the provision of fund management services to local investors.

(2) The chargeable income in relation to the source consisting of the provision of fund management services to foreign investors for a year of assessment shall be the statutory income from that source reduced by any deduction falling to be made pursuant to subsection 43(2) relating to that source.

(3) The chargeable income in relation to the source or sources other than the source consisting of the provision of fund management services to foreign investors for a year of assessment shall be the statutory income from that source or the aggregate of the statutory income from each of those sources, as the case may be, reduced by any deductions falling to be made pursuant to subsections 43(2) and 44(1):

Provided that in so making the deductions under subsections 43(2) and 44(1), no regard shall be had to the adjusted loss, if any, from the source consisting of the provision of fund management services to foreign investors.

(4) The chargeable income of a foreign fund management company, resident in Malaysia for the basis year for a year of assessment in relation to the source consisting of the provision of fund management services to foreign investors, after deduction of the tax thereon, shall be credited to an account to be kept by that company (that account and that company being referred to as the "exempt account" and the "relevant company" respectively).

(5) Paragraphs 5 and 6 of Schedule 7A shall apply as if any reference in those paragraphs to any income exempted or which has become exempt under paragraph 3 of that Schedule were a reference to income credited to the exempt account of the relevant company under subsection (4).

(6) For the purposes of this section--

"foreign fund management company"

means a company incorporated in Malaysia and licensed under the Capital Markets and Services Act 2007 [Act 671];

"foreign investors"

--(a) in relation to an individual means individuals who are not resident and not citizens of Malaysia;

(b) in relation to a company means companies where the entire issued share capital is beneficially owned, directly or indirectly by persons who are not resident and not citizens of Malaysia; and

(c) in relation to a trust fund means trust funds where the entire interest in the fund is beneficially held, directly or indirectly by foreign investors, where--

(i) the fund is created outside Malaysia; and

(ii) the trustees of the fund are not resident and not citizens of Malaysia;

"local investors" are individuals, companies or trust funds that are not foreign investors.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/60H.Closed-end fund company

60H. Closed-end fund company

(1) This section shall apply to a closed-end fund company resident in Malaysia for the basis year for a year of assessment.

(2) Where a closed-end fund company receives an amount in respect of gains from the realization of investments in the basis period for a year of assessment such amount shall be exempt from tax for that year of assessment.

(3) Paragraphs 5 and 6 of Schedule 7A shall apply, mutatis mutandis, to the amount exempted under subsection (2) and paragraph 35 of Schedule 6 (where applicable).

(4) In ascertaining the total income of a closed-end fund company for the basis period for a year of assessment there shall be deducted before any deduction falling to be made under paragraph 44(1)(c) an amount in respect of expenses incurred by that closed-end fund company during that period, which amount shall be determined in accordance with the formula--

where A is the total of the permitted expenses incurred for that basis period;

B is the gross income consisting of dividend and interest chargeable to tax for that basis period; and

C is the aggregate of the gross income consisting of dividend and interest (whether such dividend or interest is exempt or not) and gains made from the realization of investments (whether chargeable to tax or not) for that basis period:

Provided that--

(a) the amount of deduction to be made shall not be less than ten per cent of the total permitted expenses incurred for that basis period; and

(b) where, by reason of an absence or insufficiency of aggregate income for that year of assessment, effect cannot be given or cannot be given in full to any deduction falling to be made to the closed-end fund company under this section for that year, that deduction which has not been so made shall not be made to the closed-end fund company for any subsequent year of assessment. 

(5) For the purposes of this section --

"closed-end fund company"

means a public limited company incorporated in Malaysia and approved by the Securities Commission to engage wholly in the investment of funds in securities;

"dividend"

is deemed to include income distributed by a unit trust;

"permitted expenses"

means expenses incurred by a closed-end fund company in respect of --

(a) manager's remuneration;

(b) maintenance of register of shareholders;

(c) share registration expenses;

(d) secretarial, audit and accounting fees, telephone charges, printing and stationery costs and postage; 

"securities"

means debentures, stocks and shares in a public company or corporation, or bonds of any government or any body corporate or unincorporate and includes any right or option in respect thereof and any interest in unit trust schemes.

(6) Sections 33 and 34 shall not apply to a closed-end fund company.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/60I.Company that establishes special purpose vehicle

60I. Company that establishes special purpose vehicle

(1) For the purpose of this Act, where a company establishes a special purpose vehicle solely for the issuance of Islamic securities, any source of the special purpose vehicle and any income from that source shall be treated as a source and income of that company and such company shall have the right to receive and utilize any proceeds derived from the issuance of such Islamic securities.

(2) The special purpose vehicle is exempt from the responsibility of doing all acts and things required to be done under this Act.

(3) The company that establishes the special purpose vehicle shall keep and retain in safe custody records and documents in accordance with sections 82 and 82A for the purpose of ascertaining the chargeable income of the company from the source referred to in subsection (1).

(3A) For the purposes of subsections (1) and (3), the company referred to in those sections shall include a unit trust which is approved by the Securities Commission as Real Estate Investment Trust or Property Trust Fund.

(4) In this section--

"Islamic securities"

means Islamic securities which adopt the Syariah principles approved by the Securities Commission or Labuan Offshore Financial Services Authority.

"special purpose vehicle"

means a company incorporated under the Companies Act 1965 or a company incorporated under the Offshore Companies Act 1990 which has made an election under section 3A of the Labuan Offshore Business Activity Act 1990 and established solely for the purpose of complying with the principles of syariah in the issuance of Islamic securities but excludes a company which issues asset-backed securities in a securitization transaction approved by the Securities Commission or Labuan Offshore Financial Services Authority.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/61.Trusts generally

61. Trusts generally

(1) So long as a trust subsists--

(a) the trustees for the time being shall be known as the trust body and the trust body shall be treated as a person for the purposes of all the provisions of this Act except Part VIII (other than section 122);

(b) for the purposes of this Act--

(i) any source forming part of the property of the trust;

(ii) any source of a trustee of the trust, being a source of his by virtue of sections 55 to 58; and

(iii) any income from any such source, shall be treated as the source and income of the trust body of the trust:

Provided that in the case of a unit trust, gains arising from the realization of investments shall not be treated as income of the trust body of the trust;

(c) subject to subsections (4) and (5), the entitlement of a beneficiary at any time and from time to time to any income from the trust shall be deemed to be a source (in this section and section 62 referred to as his ordinary source) of his in relation to the trust, and the amount, ascertained under this section, of any share of his of any total income of the trust body of the trust for a year of assessment shall be deemed to be his statutory income from his ordinary source for that year; and

(d) a beneficiary of the trust shall be assessed and charged to tax in respect of any income of his from his ordinary source or from his further source within the meaning of subsection (5) in relation to the trust: 

Provided that paragraphs (c) and (d) and subsection (5) shall not apply to a person in respect of any amount which by virtue of paragraph 13(1)(d) falls to be included in the gross income of that person in respect of gains or profits from an employment.

(1A) Notwithstanding paragraphs (1)(c) and (d), a unit holder of a unit trust shall be assessed and charged to tax in respect of income equivalent to an amount ascertained by reference to his share of the total income of the unit trust for a year of assessment, distributed to him by the unit trust in the basis year for that year of assessment:

Provided that the unit holder shall not be assessed and charged to tax in respect of any amount distributed by the unit trust out of income exempt from tax, other than income exempt under section 61A, or the gains referred to in the proviso to paragraph 61(1)(b).

(1B) Any income which is distributed by a unit trust to a unit holder under subsection (1A) shall be deemed to be derived from Malaysia.

(2) The income of the trust body of a trust shall be assessed and charged to tax separately from the income of a beneficiary from any source of his in relation to the trust, whether or not that beneficiary is also a trustee member of that body, and in so assessing and charging that body by reference to its chargeable income for a year of assessment regard shall be had to the whole of its total income for that year, notwithstanding that the amount of a share thereof may be deemed under this section or section 62 to be statutory income of a beneficiary:

Provided that, where--

(a) the trust body of a trust is resident for the basis year for a year of assessment; and

(b) a beneficiary who has a share of the total income of the trust body for that year of assessment is resident for the basis year for that year of assessment, the Director General may, in ascertaining the chargeable income of the trust body for that year of assessment, deduct from that total income that share of that beneficiary.

(3) Notwithstanding any other provision of this Act, a trust body shall be regarded as resident for the basis year for a year of assessment if, but only if, any trustee member of that body is resident for that basis year:

Provided that where--

(a) the trust was created outside Malaysia by a person or persons who were not citizens;

(b) the income of that trust body for that basis year is wholly derived from outside Malaysia;

(c) the trust is administered for the whole of that basis year outside Malaysia; and

(d) at least one-half of the number of the member trustees are not resident in Malaysia for that basis year, that trust body shall not be regarded as resident in Malaysia for that basis year.

(4) Subject to sections 62 and 63, and whether or not the trust body of a trust is resident for the basis year for a year of assessment--

(a) where throughout the basis year a beneficiary of the trust was entitled to the whole of the distributable income from the trust for that basis year, the amount of the total income of the trust body for that year of assessment shall be deemed to be the amount of the beneficiary's share of that total income;

(b) where throughout that basis year a beneficiary of the trust was entitled to a particular fraction of that distributable income, an amount found by applying that fraction to that total income shall be deemed to be the amount of his share of that total income;

(c) where the trust subsists throughout that basis year and during that basis year a beneficiary of the trust is entitled to the whole or a fraction of the distributable income from the trust for any part or parts of that basis year--

(i) that total income, treated as if it had accrued evenly from day to day over that basis year, shall with respect to any such part be divided in the proportion which the length of that part bears to the length of that basis year and so much of the amount of that total income as is thus found to be apportioned to that part is referred to in this paragraph in relation to that part as the apportioned sum;

(ii) if the beneficiary was entitled to the whole of the distributable income from the trust for such a part, the apportioned sum, in relation to that part, shall be deemed to be the amount of his share (or the amount of part of his share, as the case may require) of that total income;

(iii) if the beneficiary was entitled to a particular fraction of the distributable income from the trust for such a part, an amount found by applying that fraction to the apportioned sum, in relation to that part, shall be deemed to be the amount of his share (or the amount of part of his share, as the case may require) of that total income; and

(iv) where two or more parts of his share of that total income have been so ascertained, the aggregate of the amounts of those parts shall be deemed to be the amount of his share of that total income;

(d) where the trust was not subsisting throughout that basis year, paragraphs (a) , (b) and (c) (and subsection (7)) shall have effect as if references therein to that basis year were references to a period consisting of the whole of the time during which the trust was subsisting in that basis year; and

(e) any amount deemed by virtue of this subsection to be a beneficiary's share of that total income shall be deemed to be derived from Malaysia. 

(5) Subject to sections 62 and 63, if the total of--

(a) all sums received in Malaysia from the trust body of a trust by a beneficiary (being sums of an income nature in his hands) in the basis year for a year of assessment; and

(b) all sums received by him outside Malaysia from the trust body of the trust in any year (being sums of an income nature in his hands) and remitted to Malaysia in the basis year for a year of assessment, exceeds the amount of his statutory income from his ordinary source in relation to the trust for that year of assessment--

(i) he shall, in respect of that excess, be deemed to have a source (in this subsection referred to as his further source) in relation to the trust; and

(ii) the amount of that excess shall be deemed to be his statutory income from his further source for that particular year of assessment: 

Provided that, if the Director General is satisfied that a sum equal to any part of that excess may, to the best of his judgment be regarded as an ingredient of the beneficiary's statutory income from his ordinary source in relation to the trust for any preceding year of assessment, the beneficiary's statutory income from his further source for that particular year of assessment shall be reduced by the amount of that sum.

(6) (Deleted by Act A226).

(7) Where any part of the income from a trust for the basis year for a year of assessment is subject to a trust for accumulation, any reference in this section to the total income of the trust body of that trust for that year of assessment (being a reference made in connection with a reference to the distributable income from the trust for that basis year) shall be construed as a reference to a sum which bears the same proportion to that total income as that distributable income bears to the aggregate of--

(a) that distributable income; and

(b) that part of the income from the trust which is subject to the trust for accumulation. 

(8) Paragraph (1)(a) and subsection (3) shall apply where there is only one trustee as they apply where there are two or more trustees, and references to a trust body in this Act shall be construed accordingly.

(9) In this Act--

(a) a reference to income from a source of a trust includes a reference to any income subject to the trust; and

(b) a reference to sums received or to income received by a beneficiary of a trust includes a reference to sums or income disbursed by the trust body of the trust on his behalf or for his benefit. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/61A.Exemption of Real Estate Investment Trust or Property Trust Fund

61A. Exemption of Real Estate Investment Trust or Property Trust Fund

(1) 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.

(2) In this section, "unit trust" means a unit trust which is approved by the Securities Commission as Real Estate Investment Trust or Property Trust Fund.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/62.Discretionary trusts

62. Discretionary trusts

(1) Where there is a discretionary trust, section 61 shall apply to the trust but shall be modified in its application by the following subsections.

(2) Subject to the following subsections, whether or not the trust body of discretionary trust is resident for the basis year for a year of assessment:

(a) subject to paragraph (b), the total of all sums received in Malaysia by a particular beneficiary of the trust (being sums of an income nature in his hands) in that basis year from the trust body of the trust or the total income of that body for that year of assessment, whichever is the less, shall be deemed to be the amount of that particular beneficiary's share of that total income; and

(b) where--

(i) that particular beneficiary is one of a class of beneficiaries of the trust;

(ii) that particular beneficiary has received in Malaysia and any other beneficiary or beneficiaries of that class has or have received in Malaysia any sum or sums of that nature in that basis year from the trust body of the trust; and

(iii) the aggregate of all sums so received exceeds the total income of that body for that year of assessment, paragraph (a) shall not apply to that particular beneficiary in relation to that discretionary trust for that year of assessment and a sum bearing the same proportion to that total income as the total of all sums so received by that particular beneficiary bears to that aggregate shall be deemed to be the amount of that particular beneficiary's share of that total income. 

(3) Where a trust is such that with respect to some of the distributable income from the trust for the basis year for a year of assessment (in this subsection referred to as the discretionary portion) a discretionary power of the trustees applies and with respect to some of the distributable income from that trust for that basis year (in this subsection referred to as the non-discretionary portion) either a beneficiary is entitled to the whole thereof or there are beneficiaries entitled to particular fractions thereof--

(a) the total income of the trust body of the trust for that year of assessment shall be divided into a discretionary part and a non-discretionary part, the amount of the discretionary part being a sum which bears the same proportion to that total income as the discretionary portion bears to the distributable income from the trust for that basis year and the amount of the non-discretionary part being a sum which bears the same proportion to that total income as the non-discretionary portion bears to the distributable income from the trust for that basis year;

(b) subject to paragraph (c)--

(i) subsection (2) shall apply in relation to the trust body and that part of the trust relating to the discretionary portion as if the amount of the discretionary part were the total income of the trust body for that year of assessment;

(ii) in the application of subsection 61(5) in relation to the trust body and that part of the trust relating to the discretionary portion, the amount of the discretionary part shall be treated as the total income of the trust body for that year of assessment; and

(iii) in the application of subsection 61(4) and (5) in relation to the trust body and that part of the trust relating to the non-discretionary portion, the amount of the non-discretionary part shall be treated as the total income of the trust body for that year of assessment;

(c) where in consequence of the application of paragraph (b) a beneficiary of the trust has a share of the discretionary part and a share of the non-discretionary part, the aggregate of the amounts of those shares shall be deemed to be the amount of his statutory income from his ordinary source in relation to the trust for that year of assessment, and if the total of--

(i) all sums received in Malaysia from the trust body of the trust by him (being sums of an income nature in his hands) in the basis year for a year of assessment; and

(ii) all sums received by him outside Malaysia from the trust body of the trust in any year (being sums of an income nature in his hands) and remitted to Malaysia in the basis year for a year of assessment, exceeds that aggregate, that excess shall be deemed to be his further source within the meaning of subsection 61(5). 

(4) Where subsection (2) or (3) applies in relation to a trust (in this subsection referred to as the principal trust) and a year of assessment, then, if any part of the income from the principal trust for the basis year for that year of assessment is subject to a trust for accumulation, the reference in subsection (2) or paragraph (3)(a) to total income shall be construed as a reference to a sum which bears the same proportion to that total income as the part of the income from the principal trust not so subject to that trust for accumulation bears to the income from the principal trust.

(5) (Deleted by Act A226).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/63.Trust annuities

63. Trust annuities

(1) This section shall apply where a person is entitled to an annuity payable under the terms of a trust (that annuity, that trust and the trust body of that trust being in this section referred to as the annuity, the trust and the trust body respectively).

(2) The amount of the annuity payable for the basis year (or for a part of the basis year) for a year of assessment shall be ascertained whenever necessary by applying subsection 19(3) as if references therein to Chapter 4 were references to this section and references to the basis period (or to a part thereof) for a year of assessment were references to the basis year (or to a part thereof) for a year of assessment; and, where two or more amounts are payable in respect of the annuity for the basis year (or for a part of the basis year) for a year of assessment, then, in the application of this section to that annuity, any reference to an amount payable in respect of that annuity shall be construed as a reference to the aggregate of those amounts.

(3) Where the whole of the gross income of the trust body from each of its sources for the basis period for a year of assessment is derived from Malaysia or the trust body is resident for the basis year for that year of assessment--

(a) the amount payable in respect of the annuity for that basis year shall be deemed to be derived from Malaysia whether or not the trust body has any total income for that year of assessment; and

(b) in ascertaining the total income (if any) of the trust body for that year of assessment that amount shall be deducted after any deduction falling to be made under paragraph 44(1)(a) or (b) and before any deduction falling to be made under paragraph 44(1)(c). 

(4) Where--

(a) the trust body is not resident for the basis year for a year of assessment; and

(b) either--

(i) in ascertaining the trust body's total income for that year of assessment regard is to be had only to one source, and the gross income for the basis period for that year of assessment from that source is derived partly from Malaysia and partly from outside Malaysia; or

(ii) the trust body's gross income for the basis period for that year of assessment is derived as to one of its sources wholly or partly from Malaysia and as to another of its sources wholly or partly from outside Malaysia, subsection (5) shall apply for ascertaining the total income (if any) of the trust body for that year of assessment.

(5) Where this subsection applies in relation to a year of assessment, the amount payable in respect of the annuity for the basis year for that year of assessment shall be deducted after any deduction falling to be made under paragraph 44(1)(a) or (b) and before any deduction falling to be made under paragraph 44(1)(c) and--

(a) if the whole of that amount is so deducted, that amount shall be deemed to be derived from Malaysia;

(b) if that amount exceeds what would be the total income (if any) of the trust body for that year of assessment ascertained without any deduction being made in respect of that amount, so much of that amount as equals what would be that total income as so ascertained shall be deemed to be derived from Malaysia. 

(6) Where any amount is payable in respect of a joint annuity under the terms of the trust, there shall for the purposes of this section be deemed to be payable to each of the joint annuitants with respect to that amount a sum arrived at by dividing that amount by the number of joint annuitants.

(7) Where two or more annuities are payable under the terms of the trust and there is insufficient income to allow, in ascertaining the total income (if any) of the trust body of the trust, a full deduction of all amounts payable in respect of all those annuities, the Director General shall give such directions as are necessary for ascertaining how much of the amount payable in respect of each of those annuities shall be deemed to be derived from Malaysia for the purposes of paragraph 5(b).

(8) In this section "annuity" includes any pension or other periodical payment to which paragraph 4(e) applies.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/63A.Special deduction for qualifying capital expenditure

63A. Special deduction for qualifying capital expenditure

(1) In ascertaining the statutory income of a unit trust from a source consisting of the derivation of rent from the letting of real property for a year of assessment, there shall be deducted from the adjusted income from that source for that year of assessment an allowance made under subsection (2) in respect of qualifying capital expenditure.

(2) Where a unit trust has, for the purposes of deriving rent from the letting of real property, incurred qualifying capital expenditure in relation to an asset and at the end of the basis period for a year of assessment the unit trust was the owner of the asset and the asset was in use for that purpose, there shall be made to the unit trust in relation to that source for that year an allowance equal to one tenth of that expenditure:

Provided that where, by reason of an absence or insufficiency of adjusted income from that source for the basis period for that year of assessment, effect cannot be given or cannot be given in full to any allowance falling to be made for that year in relation to that source, that allowance which has not been so made shall not be made to the unit trust for any subsequent year of assessment.

(3) Where at the end of the basis period for any year of assessment the residual expenditure in relation to an asset in respect of which qualifying capital expenditure has been incurred is zero, or the asset is no longer owned or in use by the unit trust, no allowance shall be made to the unit trust for that year of assessment and subsequent years of assessment.

(4) For the purposes of subsection (2), qualifying capital expenditure shall be deemed to have been incurred on the day on which the machinery or plant is capable of being used for the purposes of deriving rent from the letting of real property.

(5) For the purposes of this section--

"qualifying capital expenditure"

in relation to an asset is capital expenditure incurred on the provision of machinery or plant used for the purposes of deriving rent from the letting of real property, including--

(a) expenditure incurred on the alteration of an existing building for the purpose of installing that machinery or plant and other expenditure incurred incidentally to the installation thereof provided that such expenditure does not exceed seventy-five per cent of the aggregate of itself and any other expenditure (being qualifying capital expenditure); and

(b) expenditure incurred on preparing or levelling land in order to prepare a site for the installation of that machinery or plant provided that such expenditure does not exceed ten per cent of the aggregate of itself and any other expenditure (being qualifying capital expenditure); 

"residual expenditure"

at any date in relation to an asset in respect of which qualifying capital expenditure has been incurred by a unit trust shall be the total qualifying capital expenditure incurred on the provision of the asset before that date reduced by the allowance falling to be made in relation to that asset for any year of assessment before that date.

(6) This section shall not apply to a unit trust referred to in subsection 61A(2).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/63B.Special deduction for expenses

63B. Special deduction for expenses

(1) In ascertaining the total income of a unit trust for the basis period for a year of assessment, there shall be deducted before any deduction falling to be made under paragraph 44(1)(c) an amount in respect of expenses incurred by that unit trust during that period, which amount shall be determined in accordance with the formula--

where A is the total of the permitted expenses incurred for that basis period;

B is the gross income consisting of dividend, interest and rent chargeable to tax for that basis period; and

C is the aggregate of the gross income consisting of dividend and interest (whether such dividend or interest is exempt or not) and rent, and gains made from the realization of investments (whether chargeable to tax or not) for that basis period:

Provided that--

(a) the amount of deduction to be made shall not be less than ten per cent of the total permitted expenses incurred for that basis period; and

(b) where, by reason of an absence or insufficiency of aggregate income for that year of assessment, effect cannot be given or cannot be given in full to any deduction falling to be made to the unit trust under this section for that year that deduction which has not been so made shall not be made to the unit trust for any subsequent year of assessment. 

(2) For the purposes of this section--

"dividend"

is deemed to include income distributed by a unit trust;

"permitted expenses"

means expenses incurred by the unit trust in respect of--

(a) manager's remuneration;

(b) maintenance of register of unit holders;

(c) share registration expenses;

(d) secretarial, audit and accounting fees, telephone charges, printing and stationery costs and postage, which are not deductible under subsection 33(1).

(3) This section shall not apply to a unit trust referred to in subsection 61A(2).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/∗63C.∗Special treatment on rent from the letting of real property of a Real Estate Investment Trust or Property Trust Fund

*63C.^* Special treatment on rent from the letting of real property of a Real Estate Investment Trust or Property Trust Fund

(1) This section shall apply notwithstanding any other provisions of this Act.

(2) Where in the year of assessment, income of a unit trust consists of a rent from the letting of real property, the amount of the rent shall be treated as gross income of a unit trust from a source consisting of a business for that year of assessment.

(3) In ascertaining, for a year of assessment, the adjusted income of a unit trust from a source referred to in subsection (2), any deductions to be made under this Act in arriving to that income, in respect of that source for the basis period for that year of assessment shall only be allowed against the gross income from that source but--

(a) where the amount of the deduction exceeds the gross income from that source for that year of assessment, the excess shall be disregarded for the purposes of this Act; and

(b) where that source does not produce any income, the deduction from the gross income of that unit trust from that source of income shall not be allowed. 

(4) In ascertaining, for a year of assessment, the statutory income of a unit trust from a source referred to in subsection (2), any allowances for that year of assessment under Schedule 3 in respect of that source shall only be available against the adjusted income of that source and if by reason of an absence or insufficiency of adjusted income from that source for the basis period for that year of assessment, effect cannot be given or be given in full to any allowance for that year of assessment in relation to that source, that allowance which has not been so made shall not be made to the unit trust for any subsequent years of assessment.

(5) For the purposes of this section, "unit trust" has the same meaning assigned to it under subsection 61A(2).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/63D.Income of a unit trust from the letting of real property is not income from a business

63D. Income of a unit trust from the letting of real property is not income from a business

Subject to section 63C but notwithstanding any other provisions of this Act, income of a unit trust which consists of rent from the letting of real property shall not be treated as income from a source consisting of a business.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/64.Estates under administration

64. Estates under administration

(1) For the purposes of this Act, any source forming part of the estate of a deceased individual and any income from that source arising after the day of the death of that individual shall be treated as the source and income of the executor of that individual.

(2) The chargeable income of the executor of the estate of a deceased individual for a year of assessment shall be ascertained by reference to the gross income from those sources for the appropriate basis period determined in accordance with the provisions of sections 3 and 4.

(3) Where an annuity is payable for the basis year for a year of assessment by an executor of a deceased individual, then--

(a) in ascertaining the total income of the executor for that year of assessment the amount of the annuity so payable shall be deducted after any deduction falling to be made under paragraph 44(1)(a) or (b) and before any deduction falling to be made under paragraph 44(1)(c);

(b) the annuity so payable shall be regarded as income within the meaning of paragraph 4(e) in the hands of the annuitant; and

(c) the annuity shall be deemed to be derived from Malaysia. 

(4) In the case of an estate of an individual who was domiciled in Malaysia at the time of his death, the deduction allowed for any year of assessment by section 46 (but no other deduction under Chapter 7) shall be made from the total income of the executor for that year whether or not the executor is an individual and whether or not the executor is resident for the basis year for that year.

(5) Subject to subsection (3), payments made by the executor of a deceased individual to a beneficiary of the estate of that individual and received by him as a beneficiary shall not be regarded in his hands as income for the purposes of this Act.

(6) For the purposes of subsection (3), subsection 63(2) shall apply to annuities affected by this section as it applies to annuities affected by the said section 63.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/65.Settlements

65. Settlements

(1) Subject to this section, where--

(a) by virtue or in consequence (whether directly or indirectly) of any settlement and during the life of the settlor, any income from a source or assets representing income from a source will or may become payable or applicable in the basis period for a year of assessment to or for the benefit of any relative of the settlor; and

(b) at the commencement of that year of assessment that relative is unmarried and has not attained the age of twenty-one years, the income or assets shall be deemed to be income of the settlor and not income of any other person.

(2) Subject to this section, if and so long as the terms of any settlement are such that--

(a) any person has or may have power, whether immediately or in the future, and whether with or without the consent of any other person, to revoke or otherwise determine the settlement or any provision thereof; and

(b) in the event of the exercise of the power, the settlor or a wife or husband of the settlor will or may become beneficially entitled to the whole or any part of the property then comprised in the settlement, or of the income arising from the whole or any part of the property so comprised, all income arising under the settlement from the property comprised in the settlement shall be deemed to be income of the settlor and, subject to subsection 45(2), not income of any other person:

Provided that this subsection shall not apply by reason only of the fact that the settlor or a wife or husband of the settlor will or may become beneficially entitled to any income or property relating to the interest of any beneficiary under the settlement in the event of that beneficiary predeceasing him or her, as the case may be.

(3) Subject to this section, where in the basis year for any year of assessment the settlor in relation to a settlement or any relative of the settlor or any company with respect to which the settlor or any of his relatives has control makes use for his or its own purposes, whether by borrowing or otherwise, of any income arising or of any accumulated income which has arisen under the settlement (being income to which he or it is not entitled thereunder), the amount of that income or accumulated income so made use of shall be deemed to be income of the settlor for that basis year and not the income of any other person; and, where any other person is or was beneficially entitled to that income, there shall be made to that other person such repayments of any tax paid by him in respect of that income as are made necessary by the operation of this subsection.

(4) Where, in relation to any settlement to which this section applies, in consequence of any provision of this section (and, where applicable, any other provision of this Act) any tax is charged on or paid by the settlor, he shall be entitled to recover from any trustee of the settlement in receipt of income arising whether directly or indirectly by virtue or in consequence of the settlement (or from any person in receipt of any such income which is deemed to be income of the settlor under this section) the amount of the tax so paid by him, and for that purpose to require the Director General to furnish a certificate specifying the amount of tax so paid; and any certificate so furnished shall be conclusive evidence of the facts appearing therein.

(5) Where any income or assets representing income are deemed to be income of the settlor and not income of any other person under the foregoing subsections, then, subject to subsection (6)--

(a) in a case where the terms of the settlement are such that there is a trust so that the income or assets in question are income or assets of a person having a beneficial interest in that trust, the amount of the income so deemed to be income of the settlor shall be taken to be--

(i) the amount of what would have been, but for this section, the statutory income of that other person from any property comprised in the settlement or, where that other person is not resident, what would have been his statutory income from any such property if he had been resident for all relevant basis years; or

(ii) where subsection (3) is applicable, such an amount as the Director General having regard to all the circumstances may direct;

(b) in any other case, the amount of the income so deemed to be income of the settlor shall be taken to be--

(i) the amount of what would have been, but for this section, the statutory income of that other person from any property comprised in the settlement or, where that other person is not resident, what would have been his statutory income from any such property if he had been resident for all relevant basis years; or

(ii) where subsection (3) is applicable, such an amount as the Director General having regard to all the circumstances may direct, and in any case, the income so deemed to be that of the settlor shall be deemed to be derived from such place and source as the Director General having regard to all the circumstances may direct and to be statutory income of the settlor.

(6) Notwithstanding subsection (5), in any case to which subsection (2) applies in relation to a settlement, the statutory income from each source of the trust body of the trust the subject of the settlement shall be deemed to be statutory income of the settlor and to be derived from such place and source of the settlor as the Director General having regard to all the circumstances may direct.

(7) If any question arises as to the amount of any payment of income or as to any apportionment of income or of statutory income under this section, that question shall be determined by the Director General and no appeal shall lie from his decision.

(8) This section shall apply to every settlement wherever it was made or entered into and whether it was made or entered into before or after the commencement of this Act.

(9) In the case of any settlement where there are two or more settlors, this section shall have effect in relation to each settlor as if he were the only settlor and in any such case--

(a) references in this section to the property comprised in the settlement include, in relation to any settlor, only property originating from that settlor, and references in this section to income in relation to any settlement or arising under the settlement include, in relation to any settlor, only income originating from that settlor;

(b) references in this subsection to property originating from a settlor are references to--

(i) property which that settlor has provided directly or indirectly for the purposes of the settlement;

(ii) property representing property so provided; and

(iii) so much of any property representing both property so provided and other property as on a just apportionment represents the property so provided; and

(c) references in this subsection to income originating from a settlor are references to--

(i) income from property originating from that settlor; and

(ii) income provided directly or indirectly by that settlor.

(10) In this section any reference to property comprised in a settlement includes a reference to property representing property so comprised and any reference to property representing other property includes a reference to property representing accumulated income from that other property.

(11) In this section--

"relative"

means a child of the settlor (including a stepchild of the settlor and a child of whom the settlor has the custody or whom he maintains wholly or partly at his own expense), a child adopted by the settlor or the husband or wife of the settlor in accordance with any law, and any person who is a wife, grandchild, brother, sister, uncle, aunt, nephew, niece or cousin of the settlor;

"settlement"

includes any disposition, trust, covenant, arrangement or agreement and any transfer of assets or income, but does not include--

(a) a settlement which in the opinion of the Director General is made for valuable and adequate consideration;

(b) a settlement resulting from an order of a court; or

(c) any agreement made by an employer to pay to an employee or to the widow or widower or any relative or dependant of an employee after his death such remuneration, pension or lump sum as in the opinion of the Director General is fair and reasonable; 

"settlor",

in relation to a settlement, includes any person by whom the settlement was made or entered into directly or indirectly, and any person who was provided or undertaken to provide funds or credit directly or indirectly for the purpose of the settlement or has made with any other person a reciprocal arrangement for that other person to make or enter into the settlement.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/65A.Co-operative Societies

65A. Co-operative Societies

In arriving at the chargeable income of a co-operative society for a year of assessment, there shall be deducted from the total income for that year--

(a) such sum as has been transferred or paid during the basis period for that year to a statutory reserve fund or to any educational institution or co-operative organization established for the furtherance of co-operative principles, or to both, or to a Co-operative Education Trust Fund or to a Co-operative Development Trust Fund, as may be required under the provisions of any written law relating to the registration of co-operative societies in Malaysia:

Provided that the maximum sum to be deducted shall not exceed one-fourth of the audited net profits for that basis period of such co-operative society; and

(b) an amount equal to eight per cent (or such percentage as may be prescribed) of the members' funds (as defined in subparagraph 12(2) of Part I of Schedule 6) as at the first day of the basis period for the year of assessment. 

(2) (Deleted by Act 451).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/66.Personal chargeability: general principle

Part IV PERSONS CHARGEABLE

66. Personal chargeability: general principle

Where under this Act the income of any person is assessable and chargeable to tax, that person shall, subject to this Part, be the person assessable and chargeable to tax in respect of that income.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/67.Vicarious responsibility and chargeability

67. Vicarious responsibility and chargeability

(1) Subject to this Part, the following subsections shall apply where by or under any of the following sections of this Part a person (in this section referred to as the representative)--

(a) is appointed to be the agent of any other person;

(b) is assessable and chargeable to tax on behalf of any other person; or

(c) is a person in whose name another person is assessable and chargeable to tax, any such other person being in this section referred to as the principal.

(2) The representative may require any person (including the principal, in so far as he is capable of complying with the requisition) who is in receipt or control of any income of the principal, and any person by whom any income is paid or payable to the principal, to supply to the representative full particulars of the income and any expenses connected therewith.

(3) Where the representative is assessable and chargeable to tax on behalf of the principal, the representative shall be assessable and chargeable to tax in like manner and to the like amount as the principal would be assessed and charged to tax; and, where the principal is assessable and chargeable in the name of the representative, the principal shall be so assessable and chargeable in like manner and to the like amount as he would be assessed and charged to tax if he were assessable and chargeable in his own name.

(4) The representative shall be responsible for doing all such acts and things as are required by or by virtue of this Act to be done by him as representative or by the principal for the purposes of this Act, and in particular for the payment of any tax due from him as representative or from the principal and for the payment of any debt so due to the Government under section 107A, 109, 109A or 109B; and, in default of payment, any such tax or debt (together with any penalty to which he as representative or the principal is or would be liable in respect of the default) shall be recoverable from the representative either as such or as if he were the principal, as the case may be:

Provided that the representative shall not be required to pay any such tax, debt or penalty (or any other penalty incurred by the principal) otherwise than from the accessible moneys.

(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. 

(5) Where by or by virtue of this Act anything is to be made or served on or given or done to the principal for the purposes of this Act, in lieu thereof the same may be made or served on or given or done to the representative:

Provided that nothing in this subsection shall make the representative liable to be convicted of an offence committed by the principal in which the representative had no part.

(6) The representative--

(a) may retain out of the accessible moneys so much as is necessary to pay any tax or penalty, or any debt of the kind referred to in subsection (4) due from him as representative or from the principal; and

(b) shall be and is hereby indemnified against all persons whatsoever for any payments made by him as representative in pursuance of this Act. 

(7) In this section "the accessible moneys", in relation to the representative and the principal, means any moneys (including any pension and any salary, wages or other remuneration) which--

(a) from time to time are due from the representative to the principal or are held by the representative in his custody and control on behalf of the principal; or

(b) being then moneys of or due to the principal, are obtainable on demand by the representative. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/68.Power to appoint agent

68. Power to appoint agent

(1) The Director General may, if he thinks fit, by notice in writing appoint any person to be the agent of any other person for all or any of the purposes of this Act; and, where any person is so appointed for all those purposes, he shall be assessable and chargeable to tax on behalf of that other person.

(2) An appointment made under subsection (1) may be revoked by the Director General at any time.

(3) Where a person appointed under subsection (1) to be the agent of another person is aggrieved by the appointment, he may within thirty days after the service on him of the notice of appointment appeal under section 99 as if the notice of appointment served upon him were a notice of assessment and the provisions of this Act relating to appeals shall apply accordingly with any necessary modifications.

(4) Where any income on which tax is chargeable (or the source of any such income) is under the direction and control of a court in Malaysia and the court appoints a receiver therefor--

(a) the receiver so long as his appointment subsists shall be deemed to have been appointed under subsection (1) (without the right of appeal conferred by subsection (3)) to be the agent of the court as regards that income or source for all the purposes of this Act; and

(b) if the source of that income is vested in the court, the registrar or other appropriate officer of the court shall be treated for the purposes of this Act as the person entitled to that income. 

(5) The following sections of this Part shall be without prejudice to the generality of subsection (1).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/69.Incapacitated persons

69. Incapacitated persons

(1) Where a person lawfully having the direction, control or management of any property or concern on behalf of an incapacitated person receives the gross income of that incapacitated person from all sources for the appropriate basis periods for a year of assessment, that first-mentioned person shall be assessable and chargeable to tax in respect of that income on behalf of that incapacitated person.

(2) Where there is no person assessable and chargeable to tax by virtue of subsection (1) in respect of the income of an incapacitated person, the Director General may appoint any person under subsection 68(1) to be the agent of that incapacitated person for all the purposes of this Act.

(3) Without prejudice to subsection (1) or (2), if an incapacitated person assessable and chargeable to tax is a minor, the minor's parent or guardian (or any person standing as regards the minor in a relationship corresponding to that of parent of guardian) shall be assessable and chargeable to tax on behalf of the minor.

(4) Nothing in this section shall prevent a minor being directly assessable and chargeable to tax.

(5) Paragraph 23(c) shall apply whenever appropriate in relation to the reference to gross income in this section.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/70.Non-residents

70. Non-residents

(1) A person who is not resident for the basis year for a year of assessment shall be assessable and chargeable to tax for that year of assessment either directly or in the name of any attorney, factor, agent, receiver or manager of his (whether or not the attorney, factor, agent, receiver or manager has the receipt of any income of that non-resident person):

Provided that nothing in this subsection shall render any person assessable or chargeable in the name of a broker, a general commission agent or any other agent where the broker or agent is not either--

(a) carrying on with the authority of that person the regular agency of that person; or

(b) a person assessable and chargeable as if he were an agent by virtue of section 141 on income in respect of gains or profits arising from sales or transactions carried out thought himself as broker or agent. 

(2) Where a partner in a partnership is not resident for the basis year for a year of assessment, his income ascertained under the appropriate provisions of sections 55 to 59 in relation to the partnership shall be assessable and chargeable to tax for that year of assessment in the name of--

(a) the partnership (which shall be regarded as a person to the extent necessary to give effect to this subsection);

(b) any partner who is resident for that basis year; or

(c) any agent of the partnership in Malaysia, and the tax charged thereon shall be recoverable by all the means provided by this Act out of the assets of the partnership.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/71.Masters of ships and captains of aircraft

71. Masters of ships and captains of aircraft

The master of any ship and the captain of any aircraft owned or chartered by a person who is assessable and chargeable to tax in consequence of the application of section 54 shall (though not to the exclusion of any other agent) be deemed to be the agent of that person and shall be assessable and chargeable to tax on behalf of that person.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/72.Hindu joint families

72. Hindu joint families

The income of a Hindu joint family (and any income of the family's manager or karta in his capacity as such, being income by virtue of sections 55 to 59) shall be assessable and chargeable on the family's manager or karta, who shall accordingly be assessable and chargeable to tax on behalf of the family.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/73.Trustees

73. Trustees

(1) The income of the trust body of a trust shall be assessable and chargeable to tax on the trust body (which may be given by the Director General a suitable designation for the purpose) and, so long as the trustees for the time being remain members of the trust body they shall (whether or not, in the case of each trustee, he was a member of the trust body when any particular responsibility or obligation under this Act first arose) jointly and severally be subject to all the liabilities to which they would be subject under section 67 if the trust body were the principal within the meaning of that section and each trustee were the representative within that meaning.

(2) A trustee who vacates his office shall cease to have responsibility under subsection (1):

Provided that nothing in this subsection shall relieve any person from responsibility for a criminal or negligent act, whenever committed.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/74.Executors

74. Executors

(1) Where an individual dies in the basis year for a year of assessment, his executors shall be assessable and chargeable to tax for that year of assessment, for the following year of assessment and, whenever necessary, for any previous year of assessment in respect of the chargeable income of that individual for any such year of assessment; and, where they are so assessable and chargeable, they shall be assessable and chargeable to tax in like manner and to the like amount as the individual would be assessed and charged to tax if he had not died.

(2) For the purposes of subsection (1)--

(a) the reference therein to the chargeable income of any individual for any year of assessment shall be taken to be such chargeable income for that year as he would have had if he had not died in respect of any income of his arising before his death and in respect of any income received by his executors which if he had not died and if it had been received by him (at the time it was received by his executors) would have been taken into account in arriving at that last-mentioned chargeable income; and

(b) all rights and duties which would have attached to him with respect to that last-mentioned chargeable income as he would have so had shall pass to his executors. 

(3) Any assessment or additional assessment to be made in consequence of the foregoing subsections shall be made not later than the end of the third year of assessment following the year of assessment in the basis year for which--

(a) The Director General is informed of the death of the individual by the executor referred to under subsection (1) in the form prescribed under this Act;

(b) the estate duty affidavit (if any) was filed in Malaysia with respect to any part of the estate of that individual; or

(c) where such an estate duty affidavit has been filed, the last of any corrective affidavits relating to that estate duty affidavit was filed, being the basis year in which the last of those events took place.

(4) The amount of any tax payable by the executors of a deceased individual by virtue of this section (together with any penalty which may be incurred under subsection 103(3), (4), (5), (6), (7) or (8)) shall be debt due from and payable out of the estate of that deceased individual.

(5) The executors of a deceased individual shall not distribute any of the assets of his estate unless they have made provision (in so far as they are able to do so out of those assets) for the payment in full of any tax which they know or might reasonably expect to be payable by them under this section.

(6) Any executors who fail to comply with subsection (5) shall be jointly and severally liable to pay a penalty equal to the amount of the tax to which the failure relates.

(7) Subsection 125(2) shall apply to a penalty imposed by subsection (6) of this section as it applies to a penalty imposed by subsection 112(3) or 113(2).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/75.Companies and bodies of persons

75. Companies and bodies of persons

(1) The responsibility for doing all acts and things required to be done by or on behalf of a company or body of persons for the purposes of this Act shall lie jointly and severally--

(a) in the case of a company, with--

(i) the manager or other principal officer in Malaysia;

(ii) the directors;

(iii) the secretary; and

(iv) any person (however styled) exercising the functions of any of the persons mentioned in the foregoing subparagraphs; and

(b) in the case of a body of persons, with--

(i) the manager;

(ii) the treasurer;

(iii) the secretary; and

(iv) the members of its controlling authority.

(2) The liquidator of a company which is being wound up shall not distribute any of the assets of the company to its shareholders unless he has made provision (in so far as he is able to do so out of the assets of the company) for the payment in full of any tax which he knows or might reasonably expect to be payable by the company under this Act or to be deductible by the company under section 107.

(3) Any liquidator who fails to comply with subsection (2) shall be liable to pay a penalty equal to the amount of the tax to which the failure relates.

(4) Subsection 125(2) shall apply to a penalty imposed by subsection (3) of this section as it applies to a penalty imposed by subsection 112(3) or 113(2).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/75A.Director's liability

75A. Director's liability

(1) Notwithstanding anything contrary to this Act or any other written law--

(a) where any tax is due and payable under this Act by a company, any person who is a director of that company during the period in which that tax is liable to be paid by that company; or

(b) where any debt is due and payable from an employer under any rules made pursuant to section 107 and the employer is a company, any person who is a director of that company during the period in which the debt is liable to be paid by that company, shall be jointly and severally liable for such tax or debt, as the case may be, that is due and payable and shall be recoverable under section 106 from that person.

(2) In this section, "director" means any person who--

(a) is occupying the position of director (by whatever name called), including any person who is concerned in the management of the company's business; and

(b) is, either on his own or with one or more associates within the meaning of subsection 139(7), the owner of, or able directly or through the medium of other companies or by any other indirect means to control, not less than twenty per cent of the ordinary share capital of the company ("ordinary share capital" here having the same meaning as in the definition of "director" in section 2). 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/75B.Limited liability partnership and business trust

75B. Limited liability partnership and business trust

(1) The responsibility for doing all acts and things required to be done--

(a) by or on behalf of a limited liability partnership for the purposes of this Act shall lie jointly and severally--

(i) with the compliance officer who is appointed amongst the partners of the limited liability partnership; or

(ii) if no compliance officer is appointed as such, any one or all of the partners thereof; and

(b) by or on behalf of a business trust for the purposes of this Act shall lie jointly and severally with the trustee manager of such business trust. 

(2) For the purposes of this section, "compliance officer" has the meaning assigned to it in section 27 of the Limited Liability Partnerships Act 2012.

(3) Where in a year of assessment, a partnership or a company has converted into a limited liability partnership in accordance with the Limited Liability Partnerships Act 2012--

(a) every partner of the partnership shall continue to be personally assessable and chargeable to tax for that year of assessment and for any previous year of assessment before the conversion in respect of his chargeable income for any such year of assessment; and

(b) the limited liability partnership shall be assessable and chargeable to tax for that year of assessment and for any previous year of assessment before the conversion in respect of the chargeable income of the company for any such year of assessment. 

(4) Where the limited liability partnership is so assessable and chargeable under paragraph (3)(b), it shall be assessable and chargeable to tax in like manner and to the like amount as the company would have been assessed and charged to tax prior to the conversion.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/76.Rulers and Ruling Chiefs

76. Rulers and Ruling Chiefs

(1) The income of a Ruler or Ruling Chief shall be assessable and chargeable to tax in the name of the person nominated by the Ruler or Ruling Chief for the purposes of this Act as the person executing the function of administrator of the private property of the Ruler or Ruling Chief:

Provided that where no such nomination has been made by a Ruler or Ruling Chief, section 66 shall apply to such Ruler or Ruling Chief.

(2) Where a person is responsible for the payment of tax on behalf of a Ruler or Ruling Chief--

(a) that person may pay the tax out of any private property in his hands or under his control belonging to the Ruler or Ruling Chief and may, to the extent that he pays any such tax out of his own property, indemnify himself out of any such private property;

(b) that person shall not be personally liable in respect of the tax except to the extent that he--

(i) has in his possession, custody or control any private property belonging to the Ruler or Ruling Chief; or

(ii) had any such private property in his possession, custody or control at any time after receiving notice of the tax having become due;

(c) unless the sanction of the Attorney General is first obtained, no prosecution, suit or other legal proceedings shall be instituted against that person in respect of any act or thing or which he is responsible under this section; and

(d) the provisions of section 67 shall be modified accordingly when applicable with this section. 

(3) In this section "Ruler or Ruling Chief" means--

(a) the Yang di-Pertuan Agong;

(b) the Raja Permaisuri Agong;

(c) the Timbalan Yang di-Pertuan Agong or other Ruler exercising the functions of the Yang di-Pertuan Agong;

(d) a State Authority or any person exercising the functions of a State Authority; or

(e) the Undang of Sungei Ujong, the Undang of Jelebu, the Undang of Johol, the Undang of Rembau or the Tunku Besar of Tampin. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/77.Return of income by a person other than a company, limited liability partnership, trust body or co-operative society

Part V RETURNS

77. Return of income by a person other than a company, limited liability partnership, trust body or co-operative society

(1) Every person, other than a company, limited liability partnership, trust body or co-operative 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. 

(1A) 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. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/77A.Return of income by every company, limited liability partnership, trust body or co-operative society

77A. Return of income by every company, limited liability partnership, trust body or co-operative society

(1) Every company, limited liability partnership, 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.

(1A) For the purposes of this section, a company shall furnish to the Director General a return in the prescribed form on an electronic medium or by way of electronic transmission in accordance with section 152A.

(2) Notwithstanding subsection (1), where there is a change in the accounting period of a company, limited liability partnership, trust body or co-operative society such that the accounts are not closed on any date in a year, that company, limited liability partnership, 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. 

(4) The return furnished by a company under this section shall be based on 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.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/77B.Amendment of return

77B. Amendment of return

(1) Where for a year of assessment a person has furnished a return in accordance with subsection 77(1) or 77A(1), that person may make amendment to such return in an amended return as prescribed by the Director General in respect of the amount of tax or additional tax payable by that person on the chargeable income or on the amount of tax which has been or would have been wrongly repaid to him.

(2) An amended return under subsection (1) shall only be made after the due date for the furnishing of the return in accordance with subsection 77(1) or 77A(1), but not later than six months from that date.

(3) For the purposes of this section, the amended return shall--

(a) specify the amount or additional amount of chargeable income and the amount of tax or additional tax payable on that chargeable income.

(b) specify the amount of tax payable on the tax which has or would have beem wrongly repaid to him;

(c) specify the increased sum ascertained in accordance with subsection (4); or

(d) contain such particulars as may be required by the Director General. 

(4) The tax or additional tax payable under subsection (1) shall--

(a) if the amended return is furnished within a period of sixty days after the due date for the furnishing of the return in accordance with subsection 77(1) or 77A(1), be increased by a sum equal to ten per cent of the amount of such tax or additional tax; or

(b) if the amended return is furnished after the period of sixty days from the due date for the furnishing of the return in accordance with subsection 77(1) or 77A(1) but not later than six months from that date, be increased by a sum which shall be determined in accordance with the following formula: 

where A is the amount of such tax payable or additional tax payable; and

B is ten per cent of the amount of such tax payable or additional tax payable,and the amount of the increased sum shall constitute part of the amount of tax or additional tax payable under subsection (1).

(5) The amendment under subsection (1) shall only be made once.

(6) Where--

(a) a return for a year of assessment has been furnished in accordance with subsection 77(1) or 77A(1); and

(b) the Director General has made an assessment for that year of assessment under section 91, no amendment shall be allowed under this section.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/77C.Deduction of tax as final tax

77C. Deduction of tax as final tax

(1) Notwithstanding section 77, where for a year of assessment an individual--

(a) has income only in respect of gains or profits from an employment;

(b) deductions have been made by his employer in accordance with subsection 107(2) in respect of such gains or profits;

(c) the individual is employed by the same employer in that year of assessment;

(d) such deductions are not borne by his employer for that year of assessment; and

(e) that individual whose husband or wife has not made an election pursuant to section 45, the individual may elect not to furnish a return for a year of assessment to the Director General in accordance with section 77.

(2) Where subsection (1) applies and no return for a year of assessment has been furnished by an individual in accordance with section 77--

(a) an individual is deemed to have made an election under that subsection;

(b) the total amount of tax deducted referred to under paragraph (1)(b) shall be deemed to be the amount of tax payable of that individual for that year of assessment; and

(c) no assessment shall be made by the Director General in respect of that individual for that year of assessment. 

(3) Notwithstanding subsections (1) and (2), the Director General shall have the power to make an assessment under subsection 90(3) or section 91 for any year of assessment and where an assessment is made by the Director General, the amount which is deemed to be the tax payable under paragraph (2)(b) shall be disregarded.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/78.Power to call for specific returns and production of books

78. 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. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/79.Power to call for statement of bank accounts, etc.

79. 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. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/80.Power of access to buildings and documents, etc.

80. 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, documents, objects, articles, materials and things and may search such lands, buildings and places and may inspect, copy or make extracts from any such books, documents, objects, articles, materials and things without making any payment by way of fee or reward.

(1A) 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, documents, objects, articles, materials and things 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.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/81.Power to call for information

81. 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 or control 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.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/82.Duty to keep records and give receipts

82. Duty to keep records and give receipts

(1) Notwithstanding section 82A 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. 

(1A) Where a person carrying on a business has not furnished a return under subsection 77(1), 77A(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--