(3) The Director General may abate or remit any penalty imposed under this Act except a penalty imposed on conviction.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/125.Recovery of penalties imposed under Part VIII

125. Recovery of penalties imposed under Part VIII

(1) Special penalties imposed under subsection 113(1) or 114(1) shall be recoverable in the same way as fines imposed on conviction.

(2) Any penalty imposed on any person under subsection 44A(9), 112(3) or 113(2) shall be collected as if it were part of the tax payable by that person, but shall not be treated as tax so payable for the purposes of any provision of this Act other than sections 103 to 106.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/126.Jurisdiction of subordinate court

126. Jurisdiction of subordinate court

Notwithstanding any other written law, a subordinate court (as defined in Schedule 5) shall have power to try any offence under this Act and on conviction to impose the full penalty therefor.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/127.Exemptions from tax: general

Part IX EXEMPTIONS, REMISSION AND OTHER RELIEF

127. Exemptions from tax: general

(1) Notwithstanding any other provision of this Act but subject to section 127a, any income specified in Part I of Schedule 6 shall, subject to this section, be exempt from tax.

(2) The Dewan Rakyat may by resolution delete any paragraph or item in Schedule 6 or add further paragraphs or items thereto.

(3) The Minister may by statutory order--

(a) provide that the interest payable on any loan charged on the Consolidated Fund or on a State Consolidated Fund shall be exempt from tax, either generally or in respect of interest payable to persons of a particular class;

(b) exempt any class of persons from all or any of the provisions of this Act, either generally or in respect of any income of a particular kind or any class of income of a particular kind;

(c) declare any part of the armed forces to be a reserve force for the purposes of paragraph 9 of Part I of Schedule 6 in addition to the forces mentioned in that paragraph; or

(d) vary paragraph 18 of Part I of Schedule 6 by adding other commodities to those mentioned in that paragraph or deleting any of the commodities so mentioned. 

(3A) The Minister may, in any particular case exempt any person from all or any of the provision of this Act, either generally or in respect of any income of a particular kind or any class of income of a particular kind.

(4) Any orders made under subsection (3) shall be laid before the Dewan Rakyat.

(5) Any income which is exempt from tax by virtue of this section shall be disregarded for the purposes of this Act:

Provided that--

(a) this subsection shall not apply as respects section 107A, 109 or 109B; and

(b) any tax deducted under section 107A,108, 109 or 109B, from any such income shall be refunded under section 111. 

(6) Nothing in this section shall be so construed as to exempt in the hands of a recipient any income in respect of dividend, interest, bonus, salary or wages paid wholly or in part out of income exempt from tax by virtue of this section, unless that first-mentioned income is itself so exempt.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/127A.Cessation of exemption

127A. Cessation of exemption

(1) Notwithstanding any other provision of this Act or any other written law, where any income of a person is exempt by virtue of a repealed law, and the exemption is deemed to have been made by an order under section 127, that exemption shall cease.

(2) In this section, "repealed law" has the same meaning assigned to it under Schedule 9.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/128.Cessation of exemption

128. Cessation of exemption

(Deleted by Act 624).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/129.Remission of tax

129. Remission of tax

(1) The tax paid or payable by any person may be remitted wholly or in part--

(a) on grounds of poverty, by the Director General; or

(b) on grounds of justice and equity, by the Minister, and any tax so remitted shall not be regarded as tax payable for the purposes of any other provision of this Act.

(2) Where a person granted remission under subsection (1) has paid any of the tax to which the remission relates, he shall be entitled to have the amount which he has paid refunded to him as if it were an overpayment to which section 111 applies.

129A. Other relief

Notwithstanding any other provision of this Act, the Minister may for the purposes of section 127 provide any relief, in relation to the treatment of expenses, losses and capital allowances in arriving at the chargeable income of a person, as he thinks fit, which is not otherwise provided for in this Act.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/130.Other relief

130. Other relief

(Deleted by Act 693).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/131.Relief in respect of error or mistake

131. Relief in respect of error or mistake

(1) If any person who has paid tax for any year of assessment alleges that an assessment relating to that year is excessive by reason of some error or mistake in a return or statement made by him for the purposes of this Act and furnished by him to the Director General prior to the assessment becoming final and conclusive, he may within five years after the end of the year of assessment within which the assessment was made make an application in writing to the Director General for relief.

(2) On receiving an application under subsection (1) the Director General shall inquire into the matter and, subject to this section, shall give by way of repayment of tax such relief in respect of the alleged error or mistake as appears to him to be just and reasonable.

(3) In determining any application under this section the Director General shall have regard to all the relevant circumstances of the case and in particular--

(a) shall consider whether the granting of relief would result in the exclusion from charge to tax of income of the applicant; and

(b) for that purpose may take into consideration the chargeability of the applicant for years of assessment other than the year to which the application relates and assessment made upon him for those years. 

(4) No relief shall be given under this section in respect of an error or mistake as to the basis on which the chargeability of the applicant ought to have been computed if the return or statement containing the error or mistake was in fact made on the basis of, or in accordance with, the practice of the Director General generally prevailing at the time when the return or statement was made.

(5) An application under subsection (1) shall be as nearly as may be in the same form as a notice of appeal under section 99; and, where the applicant is aggrieved by the Director General's decision on the application--

(a) the applicant may within six months after being informed of the decision request the Director General in writing to send the application forward to the Special Commissioners;

(b) the Director General shall within three months after receiving the request send the application forward as if he were sending an appeal forward pursuant to section 102; and

(c) the application shall thereupon be deemed to be an appeal and shall be disposed of accordingly. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/132.Double taxation arrangements

132. Double taxation arrangements

(1) If the Minister by statutory order declares that--

(a) arrangements specified in the order have been made by the Government with the government of any territory outside Malaysia with a view of affording relief from double taxation in relation to tax under this Act or other taxes of every kind under any written law and any foreign tax of that territory; and

(b) it is expedient that those arrangements should have effect, then, so long as the order remains in force, those arrangements shall have effect in relation to tax under this Act notwithstanding anything in any written law.

(2) Where any arrangements have effect by virtue of this section, section 138 shall not prevent the disclosure to a duly authorized servant or agent of the government with which the arrangements have been made of such information as is required to be disclosed under the arrangements.

(3) The appropriate provisions of Schedule 7 shall apply where, under any arrangements having effect under this section in relation to a territory outside Malaysia, foreign tax payable under the laws of that territory is to be allowed as a credit against tax payable under this Act.

(4) Any arrangements to which effect is given under this section may include--

(a) provision for relief from tax with respect to any person of any particular class;

(b) provision as to income which is not itself subject to double taxation;

(c) provision for exempting from tax any person or any person of any particular class or for exempting from tax (wholly or in part) the income of any person or any person of any particular class; and

(d) in addition to provisions for relief from double taxation, other provisions relating to tax under this Act or other taxes of every kind under any written law or to foreign tax of the territory to which the arrangements relate, and any such arrangements containing any such provision may with respect to that provision be made to have effect for periods before the passing of this Act or before the making of the arrangements, and the foregoing subsections shall be construed accordingly.

(5) Where--

(a) any bilateral relief (within the meaning of Schedule 7) falls to be given to a person for a year of assessment in consequence of an order made under this section; and

(b) that year terminated prior to the date of that order, any unilateral relief (within the meaning of that Schedule) falling to be given to that person for that year by virtue of section 133 shall not be given after that date; and, if any such unilateral relief has been given to him for that year, the amount of any such bilateral relief shall be reduced by the amount of that unilateral relief which has been so given.

(6) Any order made under this section shall be laid before the Dewan Rakyat.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/132ATax information exchange arrangements

132A Tax information exchange arrangements

(1) If the Minister by statutory oredr declares that--

(a) arrangements specified in the order have been made by the Government with the government of any territory outside Malaysia with a view to the exchange of information forseeably relevant to the administration or assessment or collection or enforcement of the taxes under this Act or other taxes of every kind under any written law and any foreign tax of that territory; and

(b) it is expedient that those arrangements should have effect, then so long as the order remains in force, notwithstanding anything in any written law, those arrangements shall have effect in relation to tax under this ACt or other taxes of every kind under any written law. 

(2) No arrangement under this section can be made if the order in respect of an arrangement under section 132 is in force.

(3) Where any arrangements have effect by virtue of this section, section 138 shall not prevent the disclosure to a duly authorized servant or agent of the government with which the arrangements have been made of such information as is required to be disclosed under the arrangements.

(4) Any order made under this section shall be laid before the Dewan Rakyat.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/132B.Mutual administrative assistance arrangement

132B. Mutual administrative assistance arrangement

(1) Notwithstanding section 132 or 132A, if the Minister by statutory order declares that--

(a) arrangements specified in the order have been made by the Government with the government of any territory outside Malaysia with a view to the mutual administrative assistance in tax matters which includes simultaneous tax examinations, automatic exchange of information or tax administrations abroad; and

(b) it is expedient that those arrangements should have effect, then, so long as the order remains in force, notwithstanding anything in any written law, those arrangements shall have effect in relation to tax under this Act or other taxes of every kind under written law.

(2) Any order made under this section shall be laid before the Dewan Rakyat.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/133.Unilateral relief from double taxation

133. Unilateral relief from double taxation

Relief from double taxation in relation to tax under this Act and any foreign tax of any territory shall, where there is no order under section 132 in force in respect of that territory, be given in accordance with the appropriate provisions of Schedule 7:

Provided that no relief shall be given under this section in relation to tax payable under the laws of a province or other component part of that territory or tax levied by or on behalf of a municipality or other local body.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/133A.Special incentive relief

Part IXa SPECIAL INCENTIVE RELIEF

133A. Special incentive relief

Notwithstanding any other provisions of this Act, special incentive relief shall be given in accordance with Schedule 7A and Schedule 7B.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/134.The Director General and his staff

Part X SUPPLEMENTAL

Chapter 1--Administration

134. The Director General and his staff

(1) There shall be a Director General of Inland Revenue, who shall have the care and management of the tax.

(1A) The chief executive officer of the Inland Revenue Board of Malaysia appointed under subsection 6A(1) of the Inland Revenue Board of Malaysia Act 1995 shall be the Director General of Inland Revenue.

(1B) The deputy chief executive officers of the Inland Revenue Board of Malaysia appointed under subsection 6A(1A) of the Inland Revenue Board of Malaysia Act 1995 shall be the Deputy Directors General of Inland Revenue. 

(2) The Inland Revenue Board of Malaysia shall, after consulting the Director General of Inland Revenue, appoint, by notification in the Gazette --

(a) (Deleted by Act 742)

(b) State Directors, Directors, Deputy Directors, Principal Assistant Directors and Assistant Directors of Inland Revenue;

(c) Head of Revenue Solicitor, Deputy Revenue Solicitors, Senior Revenue Counsels and Revenue Counsels; and

(d) such other officers as may be necessary and expedient for the due administration of this Act, from amongst the employees of the Inland Revenue Board of Malaysia.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/135.Power of Minister to give directions to Director General

135. Power of Minister to give directions to Director General

The Minister may give to the Director General directions of a general character (not inconsistent with this Act) as to the exercise of the functions of the Director General under this Act; and the Director General shall give effect to any directions so given.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/136.Delegation of Director General's functions

136. Delegation of Director General's functions

(1) Any function of the Director General under this Act (not being a function exercisable by statutory order or a function exercisable under section 152) may be exercised by a Deputy Director General.

(2) Any officer appointed under paragraphs 134(2)(b) and (c), may exercise any function of the Director General under this Act (not being a function exercisable by statutory order or a function exercisable under section 152) except his function under section 44, subsection 137(1) and section 150.

(3) (Deleted by Act 644).

(4) (Deleted by Act 644).

(5) The Director General may by writing under his hand authorize any public officer or any employee of the Inland Revenue Board of Malaysia (subject to any exceptions or limitations contained in the authorization) to exercise or assist in exercising any function of the Director General under this Act which is exercisable under subsection (2) by the appointed officers.

(6) Where a public officer or any employee of the Inland Revenue Board of Malaysia exercises any of the Director General's functions by virtue of any provision of subsections (1) to (5), he shall do so subject to the general supervision and control of the Director General.

(7) The delegation by or under any provision of subsections (1) to (5) of the exercise of any function of the Director General shall not prevent the exercise of that function by the Director General himself.

(8) References in this Act to the Director General shall be construed, in relation to any case where a public officer or an employee of the Inland Revenue Board of Malaysia is authorized by any provision of subsections (1) to (5) to exercise the functions of the Director General, as including references to that officer or employee.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/137.Identification of officials

137. Identification of officials

(1) Any person exercising the right of access or the right to take possession conferred by section 80 shall carry a warrant in the prescribed form issued bythe Director General (or, in the case of a warrant issued to the Director General, by a Deputy Director General) which shall identify the holder and his office and shall be produced by the holder on demand to any person having reasonable grounds to make the demand.

(2) Where a person purporting to be a public officer or an employee of the Inland Revenue Board of Malaysia exercising functions under this Act produces a warrant in the form prescribed under subsection (1) or any written identification or authority, then, until the contrary is proved, the warrant, identification or authority shall be presumed to be genuine and he shall be presumed to be the person referred to therein.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/138.Certain material to be treated as confidential

138. Certain material to be treated as confidential

(1) Subject to this section, every classified person shall regard and deal with classified material as confidential; and, if he is an official, he shall make and subscribe before the prescribed authority a declaration in the prescribed form that he will do so.

(2) No classified material shall be produced or used in court or otherwise except--

(a) for the purposes of this Act or another tax law;

(b) in order to institute or assist in the course of a prosecution for any offence committed in relation to tax or in relation to any tax or duty imposed by another tax law; or

(c) with the written authority of the Minister or of the person or partnership to whose affairs it relates. 

(3) No official shall be required by any court--

(a) to produce or disclose classified material which has been supplied to him or another official otherwise than by or on behalf of the person or partnership to whose affairs it relates; or

(b) to identify the person who supplied that material. 

(4) Nothing in this section shall prevent--

(a) the production or disclosure of classified material to the Auditor-General (or to public officers under his direction and control) or the use of classified material by the Auditor-General, to such an extent as is necessary or expedient for the proper exercise of the functions of his office;

(b) the Director General from publicizing, from time to time in any manner as he may deem fit, the following particulars in respect of a person who has been found guilty or convicted of any offence under this Act or dealt with under subsection 113(2) or section 124--

(i) the name, address and occupation or other description of the person;

(ii) such particulars of the offence or evasion as the Director General may think fit;

(iii) the year or years of assessment to which the offence or evasion relates;

(iv) the amount of the income not disclosed;

(v) the aggregate of the amount of the tax evaded and penalty (if any) charged or imposed;

(vi) the sentence imposed or other order made:

Provided that the Director General may refrain from publicizing any particulars of any person to whom this paragraph applies if the Director General is satisfied that, before any investigation or inquiry has been commenced in respect of any offence or evasion falling under section 113 or 114, that person has voluntarily disclosed to the Director General or to any authorized officer complete information and full particulars relating to such offence or evasion. 

(5) In this section--

"another tax law"

means any Ordinance wholly repealed by this Act, any written law relating to estate duty, film hire duty, payroll tax or turnover tax and any other written law declared by the Minister by statutory order to be another tax law for the purposes of this section;

"classified material"

means any return or other document made for the purposes of this Act and relating to the income of any person or partnership and any information or other matter or thing which comes to the notice of a classified person in his capacity as such;

"classified person"

means--

(a) an official;

(b) the Auditor-General and public officers under his direction and control;

(c) any person advising or acting for a person who is or may be chargeable to tax, and any employee of a person so acting or advising if he is an employee who in his capacity as such has access to classified material; or

(d) any employee of the Inland Revenue Board of Malaysia; 

"official"

means a person having an official duty under or employed in carrying out the provisions of this Act.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/∗138A.∗Public ruling

Part X SUPPLEMENTAL

Chapter 1a -- Ruling

*138A.^* Public ruling

(1) The Director General may at any time make a public ruling on the application of any provision of this Act in relation to any person or class of persons, or any type of arrangement.

(2) The Director General may withdraw, either wholly or partly, any public ruling made under this section.

(3) Notwithstanding any other provision of this Act, where a public ruling in subsection (1) applies to any person in relation to an arrangement and the person applies the provision in the manner stated in the ruling, the Director General shall apply the provision in relation to the person and the arrangement in accordance with the ruling.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/138B.Advance ruling

138B. Advance ruling

(1) Subject to this section or any rules prescribed under this Act, on the application made by any person, the Director General shall make an advance ruling on the application of any provision of this Act to the person and to the arrangement for which the ruling is sought.

(2) An application under subsection (1) shall be made in the prescribed form and shall contain particulars as may be required by the Director General.

(3) The Director General may at any time withdraw any advance ruling made under subsection (1) by giving a notice in writing of such withdrawal to the person to whom the ruling applies.

(4) Notwithstanding any other provision of this Act, where an advance ruling applies to any person in relation to an arrangement and the person applies the provision in the manner stated in the ruling, the Director General shall apply the provision in relation to the person and that arrangement in accordance with the ruling.

(5) An advance ruling on any of the provision of this Act shall apply to a person in relation to an arrangement if the provision is expressly referred to in the ruling and for the basis period for year of the assessment for which the ruling applies.

(6) A ruling made under subsection (1) does not apply to a person in relation to an arrangement if--

(a) the arrangement is materially different from the arrangement stated in the ruling;

(b) there was a material omission or misrepresentation in, or in connection with the application of the ruling;

(c) the Director General makes an assumption about a future event or another matter that is material to the ruling, and that assumption subsequently proves to be incorrect; or

(d) the person fails to satisfy any of the conditions stipulated by the Director General. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/138C.Advance Pricing Arrangement

138C. Advance Pricing Arrangement

(1) Subject to this section and any rules prescribed under this Act, on the application made to the Director General by any person who carries out a cross border transaction with an associated person--

(a) the Director General may enter into an advance pricing arrangement with that person; or

(b) in the case where section 132 applies, the competent authorities may enter into an advance pricing arrangement, in order to determine the transfer pricing methodology to be used in any future apportionment or allocation of income or deduction to ensure the arm's length transfer prices in relation to that transaction.

(2) An application under subsection (1) shall be made in the prescribed form and shall contain particulars as may be required by the Director General.

(3) The transactions referred to in subsection (1) shall be construed as a transaction between--

(a) persons one of whom has control over the other;

(b) individuals who are relatives of each other; or

(c) persons both of whom are controlled by some other person. 

(4) In this section, "relative" and "transaction" have the same meanings assigned to them under subsection 140(8).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/139.Controlled companies

Part X SUPPLEMENTAL

Chapter 2--Controlled companies and powers to protect the revenue in case of certain transactions

139. Controlled companies

(1) For the purposes of this Act, a person shall be taken to have control of a company--

(a) if he exercises or is able to exercise or is entitled to acquire control (whether direct or indirect) over the company's affairs and in particular, without prejudice to the generality of the preceding words, if he possesses or is entitled to acquire the greater part of the share capital or voting power in the company;

(b) if he possesses or is entitled to acquire either--

(i) the greater part of the issued share capital of the company;

(ii) such part of that capital as would, if the whole of the income of the company were in fact distributed to the members, entitle him to receive the greater part of the amount so distributed; or

(iii) such redeemable share capital as would entitle him to receive on its redemption the greater part of the assets which, in the event of a winding up, would be available for distribution among members; or

(c) if in the event of a winding up he would be entitled to the greater part of the assets available for distribution among members. 

(2) Where two or more persons together satisfy in respect of a company any of the conditions in subsection (l), they shall be taken to have control of the company.

(3) For the purposes of subsections (1) and (2) there shall be attributed to any person any rights or powers of a nominee for him, that is to say, any rights or powers which another person possesses on his behalf or may be required to exercise on his direction or behalf.

(4) Where the trustees of a trust are members of a controlled company, only one of those trustees shall be deemed to be a member thereof; and, where each of those trustees as such is a person of the kind mentioned in subsection (1) or (2), only one of those trustees shall be taken to be a person of that kind.

(5) For the purposes of subparagraph (1)(b)(iii) and paragraph (c), any person who is a loan creditor of a company (otherwise than in respect of any loan capital or debt issued or incurred by the company for money lent by him to the company in the ordinary course of a business of banking carried on by him) may be treated as a member, and the references to share capital may be treated as including loan capital.

(6) For the purposes of subsection (l) there may be attributed to any person all the rights and powers of any company of which he has, or he and associates of his have, control or any two or more such companies, or of any associate of his or any two or more associates of his, including those attributed to a company or associate under subsection (3) but not those attributed to an associate under this subsection; and such attributions shall be made under this subsection as will result in the company being treated as under the control of five or fewer persons, if it can be so treated.

(7) In this section--

"associate"

means, in relation to a person--

(a) a person in any of the following relationships to that person, that is to say, husband or wife, parent or remoter forebear, child or remoter issue, brother, sister and partner;

(b) the trustee or trustees of a settlement in relation to which that person is, or any such relative of his (living or dead) as is mentioned in paragraph (a) of this definition is or was, a settlor ("settlement" and "settlor" here having the same meaning as in section 65);

(c) where that person is interested in any shares or obligations of a company which are subject to any trust or are part of the estate of a deceased person, any other person interested therein; 

"member"

includes, in relation to a company, any person having a share or interest in the capital or income of the company, and for the purposes of subsection (1) a person shall be treated as entitled to acquire anything which he is entitled to acquire at a future date or will at a future date be entitled to acquire.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/140.Power to disregard certain transactions

140. Power to disregard certain transactions

(1) The Director General, where he has reason to believe that any transaction has the direct or indirect effect of--

(a) altering the incidence of tax which is payable or suffered by or which would otherwise have been payable or suffered by any person;

(b) relieving any person from any liability which has arisen or which would otherwise have arisen to pay tax or to make a return;

(c) evading or avoiding any duty or liability which is imposed or would otherwise have been imposed on any person by this Act; or

(d) hindering or preventing the operation of this Act in any respect, may, without prejudice to such validity as it may have in any other respect or for any other purpose, disregard or vary the transaction and make such adjustments as he thinks fit with a view to counter-acting the whole or any part of any such direct or indirect effect of the transaction.

(2) In exercising his powers under this section, the Director General may--

(a) treat any gross income from any source of any person either as the gross income and source of any other person or, where the gross income is that of a controlled company, as having been distributed to any member (within the meaning of subsection 139(7)) of that company;

(b) make such computation or recomputation of any gross income, adjusted income or adjusted loss, statutory income, aggregate income, total income or chargeable income of any person or persons as may be necessary to revise any person's liability to tax or impose any liability to tax on any person in accordance with his exercise of those powers; and

(c) make such assessment or additional assessment in respect of any person as may be necessary in consequence of his exercise of those powers, nullify a right to repayment of tax or require the return of a repayment of tax already made. 

(2A) In exercising his powers under this section, the Director General may require by notice any person to pay to him within the time specified in the notice the amount of tax that would be deducted by that person under this Act in consequence of his exercise of those powers.

(3) Without prejudice to the generality of the foregoing subsections, the powers of the Director General conferred by this section shall extend--

(a) to the charging with tax of any person or persons who but for any adjustment made by virtue of this section would not be chargeable with tax or would not be chargeable with tax to the same extent; and

(b) to the charging of a greater amount of tax than would be chargeable but for any such adjustment. 

(4) Where in accordance with this section the Director General requires from a person the return of the amount of a repayment of tax already made--

(a) the Director General shall give to that person a notice of that requirement and the notice shall be treated as a notice of assessment for the purposes of any appeal therefrom, Chapter 2 of Part VI applying with any necessary modifications; and

(b) that amount shall be deemed to be tax payable under an assessment and section 103 and the other provisions of Part VII shall apply accordingly. 

(5) Where in consequence of any adjustment made under this section an assessment is made, a right to repayment is refused or a return of a repayment of tax is required, particulars of the adjustment shall be given with the notice of assessment, with the notice refusing the repayment or with the notice requiring the return of a repayment, as the case may be.

(6) Transactions--

(a) between persons one of whom has control over the other;

(b) between individuals who are relatives of each other; or

(c) between persons both of whom are controlled by some other person, shall be deemed to be transactions of the kind to which subsection (1) applies if in the opinion of the Director General those transactions have not been made on terms which might fairly be expected to have been made by independent persons engaged in the same or similar activities dealing with one another at arm's length.

(7) Notwithstanding any other provision of this section, where a transaction to which this section relates consists of a settlement on a relative or on a relative and other persons, nothing in this section and no powers exercised thereunder shall affect the interests of the relative under the settlement.

(8) In this section--

"relative"

means a parent, a child (including a stepchild and a child adopted in accordance with any law), a brother, a sister, an uncle, an aunt, a nephew, a niece, a cousin, an ancestor or a lineal descendant;

"transaction"

means any trust, grant, covenant, agreement, arrangement or other disposition or transaction made or entered into orally or in writing (whether before or after the commencement of this Act), and includes a transaction entered into by two or more persons with another person or persons.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/140A.Power to substitute the price and disallowance of interest on certain transactions

140A. Power to substitute the price and disallowance of interest on certain transactions

(1) This section shall apply notwithstanding section 140 and subject to any rules prescribed under this Act.

(2) Subject to subsections (3) and (4), where a person in the basis period for a year of assessment enters into a transaction with an associated person for that year for the acquisition or supply of property or services, then, for all purposes of this Act, that person shall determine and apply the arm's length price for such acquisition or supply.

(3) Where the Director General has reason to believe that any property or services referred to in subsection (2) is acquired or supplied at a price which is either less than or greater than the price which it might have been expected to fetch if the parties to the transaction had been independent persons dealing at arm's length, he may in determination of the gross income, adjusted income or adjusted loss, statutory income, total income or chargeable income of the person, substitute the price in respect of the transaction to reflect an arm's length price for the transaction.

(4) Where the Director General, having regard to the circumstances of the case, is of the opinion that in the basis period for a year of assessment the value or aggregate of all financial assistance granted by a person to an associated person who is a resident, is excessive in relation to the fixed capital of such person, any interest, finance charge, other consideration payable for or losses suffered in respect of the financial assistance shall, to the extent to which it relates to the amount which is excessive, be disallowed as a deduction for the purposes of this Act.

(5) The transactions or the financial assistance referred to in subsection (2) or (4) respectively, shall be construed as a transaction or financial assistance between--

(a) persons one of whom has control over the other;

(b) individuals who are relatives of each other; or

(c) persons both of whom are controlled by some other person. 

(6) In this section, "relative" and "transaction" have the same meanings assigned to them under subsection 140(8).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/140B. Special provision applicable to loan or advances to director

140B. Special provision applicable to loan or advances to director

(1) Without prejudice to the generality of section 140A and subject to this section, where in a basis period for a year of assessment, a company makes any loan or advances of any money from the internal funds of the company to a person who is a director of that company, the company shall be deemed to have a gross income consisting of interest from such loan or advances for that basis period.

(2) For the purposes of subsection (1), the interest for the basis period for that year of assessment shall be the aggregate sum of interest for all calendar months in the basis period and the sum of interest for each calendar month shall be determined in accordance with the following formula:

1/12×A×B

(3) Where in respect of a loan or advances referred to under subsection (1), interest is charged by the company and the total amount of interest charged and payable by the director to that company for the basis period for a year of assessment--

(a) is more than the aggregate sum of interest under subsection (2) for that basis period, this section shall cease to apply; or

(b) is less than the aggregate sum of interest under subsection (2) for that basis period, this section shall apply and the total amount of interest which is charged and payable to the company for that basis period shall be disregarded. 

(4) For the purposes of this Act, "director" has the same meaning assigned to it under subsection 75A(2).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/141.Powers regarding certain transactions by non-residents

141. Powers regarding certain transactions by non-residents

(1) Where--

(a) a person who is not resident for the basis year for a year of assessment carries on a business with another person who is resident for that basis year (that person, that other person and that year of assessment being in this section referred to as the non-resident, the resident and the relevant year respectively); and

(b) it appears to the Director General that, owing to the close connection between the resident and the non-resident and to the substantial control exercised by the non-resident over the resident, the course of business between them can be and is so arranged that the business done by the resident in pursuance of his connection with the non-resident produces to the resident in relation to the basis period for the relevant year either no income or a smaller income than that which might be expected to arise from that business, the non-resident shall as regards the relevant year be taken to have a chargeable income and to be assessable and chargeable to tax thereon in the name of the resident by reference to the income which might be expected to arise from the business of the resident as if the resident were an agent of the non-resident.

(2) Where the true amount of the income from a business of the non-resident cannot be readily ascertained for the purposes of subsection (1)--

(a) the Director General may, if he thinks fit, assess and charge the non-resident for the relevant year on a fair and reasonable percentage of the turnover of the business done by the non-resident through or with the resident (the percentage being determined in each case with regard to the nature of the business); and

(b) the provisions of this Act relating to the delivery of returns or particulars by persons acting on behalf of others shall extend so as to require returns or particulars of the business done by the non-resident through or with the resident to be furnished by the resident in the same manner as returns or particulars of income are to be delivered by persons acting for persons who are not resident. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/142.Evidential provisions

Part X SUPPLEMENTAL

Chapter 3--Miscellaneous

142. Evidential provisions

(1) In a suit under section 106 the production of a certificate signed by the Director General giving the name and address of the defendant and the amount of tax due from him shall be sufficient evidence of the amount so due and sufficient authority for the court to give judgment for that amount.

(2) In criminal or civil proceedings under this Act any statement purporting to be signed by the Director General or an authorized officer which forms part of or is annexed to the information, complaint or statement of claim, shall, until the contrary is proved, be evidence of any fact stated therein:

Provided that this subsection shall not apply to--

(a) a statement of the intent of the accused person or other defendant; or

(b) proceedings for an offence punishable by imprisonment. 

(3) A transcript of any particulars contained in a return or other document relating to tax, if it is certified under the hand of the Director General or an authorized officer to be a true copy of the particulars, shall be admissible in evidence as proof of those particulars.

(4) No statement made or document produced by or on behalf of any person shall be inadmissible in evidence against that person in any proceedings against him for an offence under section 112, 113 or 114, or for the recovery of any sum due by way of tax or penalty, by reason only of the fact that he was or may have been induced to make the statement or produce the document by any lawful inducement or promise proceeding from the Director General or an authorized officer.

(5) (a) Save as provided in paragraph (b) nothing in this Act shall--

(i) affect the operation of Chapter IX of Part III of the Evidence Act 1950 [Act 56]; or

(ii) be construed as requiring or permitting any person to produce or give to a court, the Special Commissioners, the Director General or any other person any document, thing or information on which by that Chapter or those provisions he would not be required or permitted to produce or give to a court.

(b) Notwithstanding any other written law, where any document, thing, matter, information, communication or advice consists wholly or partly of, or relates wholly or partly to, the receipts, payments, income, expenditure, or financial transactions or dealings of any person (whether an advocate and solicitor, his client, or any other person), it shall not be privileged from disclosure to a court, the Special Commissioners, the Director General or any authorized officer if it is contained in, or comprises the whole or part of, any book, account, statement, or other record prepared or kept by any practitioner or firm of practitioners in connection with any client or clients of the practitioner or firm of practitioners or any other person.

(c) Paragraph (b) shall also apply with respect to any document, thing, matter, information, communication or advice made or brought into existence before the commencement of that paragraph. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/142A.Admissibility of electronic record

142A. Admissibility of electronic record

(1) Notwithstanding any other written law, where in any proceedings under this Act an electronic record of--

(a) any prescribed form is furnished by way of electronic transmission under section 152A; or

(b) any other document is stored or received by or communicated to the Director General on an electronic medium or by way of electronic transmission, the electronic record or the copy or print-out of that electronic record shall be admissible as evidence of the facts stated or contained therein:

Provided that the record or the copy or print-out is--

(i) certified by the Director General to contain all or any information furnished, stored, communicated or received on an electronic medium or by way of electronic transmission under this section; or

(ii) otherwise authenticated in the manner provided in the Evidence Act 1950 for authentication of documents produced by computer. 

(2) Where the electronic record of any form prescribed under this Act or any other document, or a copy or print-out of that record is admissible under subsection (1), it shall be presumed, until the contrary is proved, that the record or the copy or print-out accurately reproduces the content of that form or document.

(3) For the purposes of this Act, "electronic medium" includes a data, text, image or any other information stored, received or communicated by means of electronic, magnetic, optical, imaging or any other data processing device.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/143.Errors and defects in assessments, notices and other documents

143. Errors and defects in assessments, notices and other documents

(1) No assessment, notice or other document purporting to be made or issued for the purposes of this Act shall be quashed or deemed to be void or voidable for want of form, or be affected by any mistake, defect or omission therein, if it is in substance and effect in conformity with this Act or in accordance with the intent and meaning of this Act and--

(a) in the case of an assessment, the person assessed or intended to be assessed or affected thereby is designated according to common intent and understanding; and

(b) in any other case, the person to whom it is addressed and any other person referred to therein are so designated. 

(2) An assessment purporting to be made or issued for the purposes of this Act shall not be impeached or affected by reason of a mistake therein as to--

(a) the name of a person charged to tax;

(b) the description of any income; or

(c) the amount of chargeable income assessed or tax charged, and a notice of assessment purporting to be so made or issued shall not be impeached or affected by any such mistake if it is served on the person in respect of whom the assessment was made or intended to be made (or served in accordance with subsection 67(5)) and contains in substance and effect the particulars contained in the assessment.

(3) Notwithstanding subsection (2), if the amount of tax charged by an assessment has been incorrectly calculated by reference to the amount of the chargeable income and the appropriate rate of tax applicable thereto, the amount of tax charged as shown in the assessment and the notice of assessment may, if the Director General so directs, be taken to be the amount of tax which ought to have been charged if it had been correctly calculated.

(4) A notice of tax payable purporting to be issued for the purposes of this Act shall not be impeached by reason of a mistake therein as to the name of the person liable to pay the tax if the notice is served on that person.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/144.Power to direct where returns, etc., are to be sent

144. Power to direct where returns, etc., are to be sent

The Director General may by statutory order direct that any information, return or document required to be supplied, sent or delivered to the Director General for the purposes of this Act shall, subject to any conditions contained in the order, be supplied, sent or delivered to such public officer or employee of the Inland Revenue Board of Malaysia or to such address as may be specified in the order.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/145.Service of notices

145. Service of notices

(1) Subject to any express provision of this Act, for the purposes of this Act notices may be served personally or by ordinary or registered post.

(2) A notice relating to tax which is sent by ordinary or registered post shall be deemed to have been served on the person (including a partnership) to whom it is addressed on the day succeeding the day on which the notice would have been received in the ordinary course of post if it is addressed--

(a) in the case of a company, partnership or body of persons having a registered office in Malaysia--

(i) to that registered office;

(ii) to its last known address; or

(iii) to any person authorized by it to accept service of process;

(b) in the case of a company, partnership or body of persons not having a registered office in Malaysia--

(i) to any registered office of the company, partnership or body (wherever that office may be situated);

(ii) to the principal place of business or other activity of the company, partnership or body (wherever that place may be situated); or

(iii) to any individual authorized (by or under the law of any place where the company, partnership or body is incorporated, registered or established) to accept service of process; and

(c) in the case of an individual, to his last known address. 

(3) Where a person to whom there has been addressed a registered letter containing a notice under this Act--

(a) is informed that there is a registered letter awaiting him at a post office but refuses or neglects to take delivery of the letter; or

(b) refuses to accept delivery of that registered letter when tendered, the notice shall be deemed to have been served upon him on the date on which he was informed that the letter was awaiting him or on which the letter was tendered to him, as the case may be.

(4) For the purposes of subsection (3) an affidavit by the officer in charge of a post office stating that to the best of his knowledge and belief--

(a) there has been delivered to the address appearing on a registered letter a post office notification informing the addressee that there is a registered letter awaiting him; or

(b) there has been tendered for delivery to the addressee a registered letter, shall, until the contrary is proved, be evidence that the addressee has been so informed or that that registered letter has been tendered to him, as the case may be.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/146.Authentication of notices and other documents

146. Authentication of notices and other documents

(1) Subject to subsection (2), every notice or other document issued, served or given for the purposes of this Act by the Director General or an authorized officer shall be sufficiently authenticated if the name and office of the Director General is printed, stamped or otherwise written thereon.

(2) Where this Act provides for a notice, certificate or other document to be under the hand of any officer, the notice, certificate or document shall be signed in manuscript by that officer.

(3) A notice, certificate or other document issued, made, served or given for the purposes of this Act and purporting to be signed in manuscript by the Director General or an authorized officer shall be presumed, until the contrary is proved, to have been so signed.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/147.Free postage

147. Free postage

All returns made under this Act and all remittances of tax (and any correspondence resulting from or connected with any such return or remittance) may, if posted in Malaysia in envelopes marked "Income Tax", be sent free of postage to the Director General or to an officer or address specified in an order made under section 144:

Provided that the Director General may in certain cases by notice in writing require any person to send any return, document or correspondence by registered post.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/148.Provisions as to approvals and directions given by Minister or Director General

148. Provisions as to approvals and directions given by Minister or Director General

Where by or under this Act there is conferred on the Minister or the Director General power to give an approval or direction of any kind (not being a power exercisable by statutory order)--

(a) an approval or direction given in the exercise of that power shall not be regarded as subsidiary legislation;

(b) that power shall be deemed to include--

(i) power to give any such approval or direction with retrospective effect;

(ii) power to vary or revoke any such approval or direction retrospectively or otherwise; and

(iii) power to give any such approval or direction subject to such conditions as the Minister or the Director General, as the case may be, may think fit to impose; and

(c) any such approval or direction shall take effect when it is given or, where the Minister or Director General, as the case may be, specifies a date on which it is to take effect, on that date. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/149.Annulment of rules and orders laid before the Dewan Rakyat

149. Annulment of rules and orders laid before the Dewan Rakyat

Where this Act provides for any rule or order to be laid before the Dewan Rakyat, the rule or order shall be laid before the Dewan as soon as may be after it has been made and, if the Dewan at or before the second meeting begun after the rule or order is laid before it resolves that the rule or order or any provision of it be annulled, the rule or order or that provision of it shall cease to have effect, without prejudice to anything previously done thereunder or the making of a new rule or order:

Provided that this section shall not apply to an order made under subsection 6(2).

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/150.Power to approve pension or provident fund, scheme or society

150. Power to approve pension or provident fund, scheme or society

The Director General may, subject to such conditions as he may think fit to impose, approve any pension or provident fund, scheme or society for the purposes of this Act.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/151.Procedure for making refunds and repayments

151. Procedure for making refunds and repayments

Where the Director General is authorized or required by this Act to make any refund or repayment, he shall certify the amount of the sum to be refunded or repaid and cause the refund or repayment to be made forthwith.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/152.Forms

152. Forms

(1) The Director General may, either by statutory order or in such other way as seems to him to be appropriate, prescribe such forms as are required by this Act to be prescribed and such other forms as he considers ought to be prescribed in connection with the operation of this Act, and may authorize the use of a suitable substitute for any form so prescribed:

Provided that this subsection shall not apply to the form of declaration to be prescribed for the purposes of subsection 138(1).

(2) Where in order to comply with any provision of this Act a person is required to use a prescribed form, he shall not be regarded as complying with that provision unless he uses all reasonable diligence to procure and use--

(a) a printed copy of the form as prescribed under subsection (1); or

(b) a copy of any substitute for the form authorized under subsection (1), being a printed copy unless the authorization provides otherwise. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/152A.Electronic medium

152A. Electronic medium

(1) The Director General may allow any form prescribed under this Act to be furnished by any person or by any class of persons on an electronic medium or by way of an electronic transmission.

(2) For the purposes of subsection (1), the conditions and specifications under which any prescribed form is to be furnished shall be as determined by the Director General.

(3) For the purposes of subsection (1), a person may authorize in writing a tax agent to furnish on his behalf any form prescribed under this Act in the manner provided for in subsection (1).

(4) A form prescribed under this Act furnished in accordance with subsection (3) on behalf of any person shall be presumed to have been furnished on that person's authority, until the contrary is proved, and the person shall be deemed to be cognizant of its contents.

(5) Where subsection (3) applies--

(a) the person who authorizes the tax agent shall make a declaration in the form prescribed under this Act stating that--

(i) the tax agent is authorized to furnish the form to the Director General on his behalf; and

(ii) the information provided by him to the tax agent for the preparation of the form is true and correct;

(b) the tax agent shall make a declaration in the form furnished in accordance with subsection (1) stating that--

(i) the form is prepared in accordance with the information given by the person; and

(ii) he has received a declaration made by the person under paragraph (a);

(c) the person shall keep and retain in safe custody the form being the hard copy of the form so furnished and that copy shall be made under processes and procedures which are designed to ensure that the information contained in the form shall be the only information furnished in accordance with this section;

(d) the hard copy shall be signed by the person; and

(e) the hard copy in paragraph (c) and the declaration made under paragraph (a) shall be kept and retained for a period of seven years from the end of the year of assessment in which the return is furnished. 

(6) Any form referred to in subsection (1) is deemed to have been furnished by a person to the Director General on the date on which acknowledgement of receipt of the form is transmitted electronically to the Director General to the person.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/∗153.∗Restriction on persons holding themselves out as tax agents, tax consultants, etc.

*153.^* Restriction on persons holding themselves out as tax agents, tax consultants, etc.

(1) No person holding himself out as a tax agent, a tax consultant or a tax adviser (or under any other like description) shall be permitted to act in Malaysia on behalf of any person for any of the purposes of this Act unless he is a tax agent as defined in this section:

Provided that--

(a) where a company, body of persons or partnership so holds itself out in any calendar year, then, if at the time of the holding out any employee of the company, member of the body or partner in the partnership (whether or not that employee, member or partner is in Malaysia) is a tax agent as so defined--

(i) it shall be sufficient for the purposes of this subsection if there is present in Malaysia for a period or periods in that year amounting in all to more thanone hundred and eighty two days an employee, member or partner, as the case may be (not being necessarily the same employee, member or partner throughout that period or those periods) who is such a tax agent; and

(ii) the company, body or partnership in question shall not be guilty of a contravention of this section unless after the end of that year it is shown to have failed to comply with subparagraph (i);

(b) nothing in this subsection shall be construed as restricting an advocate in the lawful practice of his profession. 

(2) In this section (and in section 120 in so far as it relates to this section) "person" includes partnership.

(3) For the purposes of this Act, "tax agent" means any professional accountant or person, approved by the Minister.

(4) An application for an approval under subsection (3) or for a renewal of such approval shall be made to the Minister.

(5) A fee as may be prescribed by the Minister by an order published in the Gazette shall be paid on the application for an approval or renewal of an approval under subsection (4).

(6) An approval or renewal of an approval under this section shall be valid for--

(a) a minimum period of twenty-four months beginning from the date of such approval or renewal; or

(b) any other period as approved by the Minister which shall not be less than twenty-four months beginning from the date of such approval or renewal. 

(7) An approval granted by the Minister before 24 October 1986 shall lapse on 31 December 1987 unless a renewal of such approval is obtained under this section by that date.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/154.Power to make rules

154. Power to make rules

(1) The Minister may make rules--

(a) providing for the deduction and payment of tax at the source in respect of income from any employment and income of the kind mentioned in paragraph 4(e) and for the recovery of tax which has or should have been so deducted;

(b) prescribing, except where subsection 152(1) applies, anything required by this Act to be prescribed;

(c) implementing or facilitating the operation of an arrangement having effect under section 132 or 132A;

(d) regulating the practice and procedure in appeals to the Special Commissioners and the Special Commissioners' own procedure;

(e) requiring any person chargeable to tax who intends to leave Malaysia to produce a certificate that he has paid all tax and other sums due from him under this Act or that the Director General does not object to his departure, and preventing any such person from leaving Malaysia if he fails to produce such a certificate;

(ea) prescribing penalties for any contravention or failure to comply with any of the provisions of any rules made under this section:

Provided that no such penalty shall exceed the penalty prescribed under section 120; 

(eb) providing for the scope and procedure applied in relation to any ruling made under section 138A or 138B, or to any arrangement under section 138C;

(ec) prescribing fees charged in relation to any ruling made under section 138B;

(ed) implementing and facilitating the operation of section 140A;

(f) for facilitating generally the operation of this Act. 

(2) Any rules made under subsection (1) shall be laid before the Dewan Rakyat.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/154A.Power to enter into an agreement with regard to tax liability

154A. Power to enter into an agreement with regard to tax liability

(1) Notwithstanding any other provisions of this Act, the Government may enter into an agreement with any person with regard to ascertainment of his adjusted income or adjusted loss or tax chargeable on him where such agreement is, in the opinion of the Minister, just and equitable or in the interest of the Government or any State Government.

(2) Any such agreement may include--

(a) provision for disallowing (wholly or in part) outgoings or expenses which but for the agreement would have been allowed as a deduction; or

(b) provision for forgoing (wholly or in part) by any person of his entitlement to any relief or credit due to him under the Act. 

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/155.Repeals

155. Repeals

(1) The Acts and Ordinances specified in Schedule 8 are hereby repealed, to the extent therein specified, with effect from 1 January 1968.

(2) All subsidiary legislation made under any Ordinance wholly repealed by subsection (1) is hereby revoked with effect from 1 January 1968.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53,,/156.Transitional and saving provisions

156. Transitional and saving provisions

Subject to section 127A, the transitional and saving provisions in Schedule 9 shall have effect notwithstanding section 155 or any other provision of this Act.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/Schedule 1

Schedule 1

[Section 6]

Rates of Tax

Part I

1. Except where paragraphs 1A, 2, 2A, 2D, 3 and 4 provide otherwise, income tax shall be charged for a year of assessment upon the chargeable income of every person at the following rates:

1A. Except where paragraph 2 provides otherwise, income tax shall be charged for a year of assessment on the chargeable income of a person (other than a company) not resident for the basis year for that year of assessment at the rate of 25 per cent on every ringgit of the chargeable income.

2. Subject to paragraph 3, income tax shall be charged for a year of assessment on the chargeable income of--

(a) a company other than a company to which paragraph 2A applies;

(b) (Deleted by Act 578);

(c) a trust body;

(d) an executor of an estate of a deceased individual who was domiciled outside Malaysia at the time of his death;

(e) a receiver with respect to whom subsection 68(4) applies;

(f) a limited liability partnership other than a limited liability partnership to which paragraph 2D applies, at the rate of 25 per cent for the year of assessment 2015 and 24 per cent for the subsequent years of assessment on every ringgit of the chargeable income.

2A. Subject to paragraphs 2B, 2C and 3, income tax shall be charged for a year of assessment on the chargeable income of a company resident and incorporated in Malaysia which has a paid-up capital in respect of ordinary shares of two million five hundred thousand ringgit and less at the beginning of the basis period for a year of assessment at the following rates:

2B. The provisions of paragraph 2A shall not apply to a company referred to in that paragraph if more than--

(a) fifty per cent of the paid up capital in respect of ordinary shares of the company is directly or indirectly owned by a related company;

(b) fifty per cent of the paid up capital in respect of ordinary shares of the related company is directly or indirectly owned by the first mentioned company; or

(c) fifty per cent of the paid up capital in respect of ordinary shares of the first mentioned company and the related company is directly or indirectly owned by another company. 

2C. For the purpose of paragraph 2B, "related company" means a company which has a paid up capital in respect of ordinary shares of more than two million and five hundred thousand ringgit at the beginning of the basis period for a year of assessment.

2D.Subject to paragraphs 2E, 2F and 3, income tax shall be charged for a year of assessment on the chargeable income of a limited liability partnership resident in Malaysia which has a total contribution of capital (whether in cash or in kind) of two million five hundred thousand ringgit and less at the beginning of the basis period for a year of assessment at the following rates:

2E.The provisions of paragraph 2D shall not apply to a limited liability partnership referred to in that paragraph if more than--

(a) fifty per cent of the capital contribution (whether in cash or in kind) of the limited liability partnership is directly or indirectly contributed by a company;

(b) fifty per cent of the paid up capital in respect of ordinary shares of the company is directly or indirectly owned by the limited liability partnership; or

(c) fifty per cent of the capital contribution (whether in cash or in kind) of the limited liability partnership and fifty per cent of the paid up capital in respect of ordinary shares of the company is directly or indirectly owned by another company. 

2F. The company referred to in paragraph 2E, other than another company referred to in subparagraph 2E(c), shall have a paid up capital in respect of ordinary shares of more than two million and five hundred thousand ringgit at the beginning of the basis period for a year of assessment.

3. Income tax shall be charged for a year of assessment on the chargeable income of an insurer from inward re-insurance business or off-shore insurance business at the rate of 5 per cent on every ringgit of the chargeable income.

4. Income tax shall be charged for a year of assessment on the chargeable income of an operator from inward re-takaful business or off-shore takaful business at the rate of 5 per cent on every ringgit of the chargeable income.

Part II

Notwithstanding Part I, income tax shall be charged on the following income at the following rates--

Part III

(Deleted by Act 451)

Part IV

Notwithstanding Part I, income tax shall be charged for a year of assessment upon the chargeable income of every co-operative society at the following rates--

Part V

Notwithstanding Part I and Part II, income tax shall be charged on the income of a non-resident person consisting of--

(i) amounts paid in consideration of services rendered by the person or his employee in connection with the use of property or rights belonging to, or the installation or operation of any plant, machinery or other apparatus purchased from, such person;

(ii) amounts paid in consideration of technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme; or

(iii) rent or other payments made under any agreement or arrangement for the use of any moveable property, which is derived from Malaysia at the rate of 10% of gross.

Part VI

Notwithstanding Part I, income tax shall be charged on the income of an individual resident in Malaysia consisting of interest (other than interest exempt under this Act or any order made thereto) accruing in or derived from Malaysia and received from a person referred to in section 109C at the rate of .. .. .. .. .. .. .. .. .. .. .. .. .. 5% of gross.

Part VII

(Deleted by Act 624)

Part VIII

Notwithstanding Part I and Part II, income tax shall be charged on the chargeable income of a life fund, other than income arising from life re-insurance business and inward life re-insurance business, of a resident or non-resident insurer at the rate of .. .. .. 8 per cent.

Part IX

Notwithstanding Part I, income tax shall be charged on the chargeable income of a foreign fund management company in relation to the source consisting of the provision of fund management services to foreign investors as referred to in section 60g at the rate of .. .. .. 10 per cent.

Part X

1. Notwithstanding Part I--

(a) and subject to paragraphs (b) and (c), income tax shall be charged for a year of assessment on the income of a unit holder other than a unit holder which is a resident company consisting of income distributed to the unit holder referred to in section 109D which is derived from Malaysia at the rate of 10% of gross;

(b) and subject to paragraph (c), income tax shall be charged for a year of assessment on the income of a unit holder which is a non-resident company consisting of income distributed to the unit holder referred to in section 109D which is derived from Malaysia at the rate of 26% of gross for the year of assessment 2008 and 25% of gross for the subsequent years of assessment; and

(c) and income tax shall be charged for a year of assessment on the income of a unit holder which is a foreign institutional investor consisting of income distributed to the unit holder referred to in section 109D which is derived from Malaysia at the rate of 10% of gross. 

2. In this Part, "institutional investor" means a pension fund, collective investment scheme or such other person approved by the Minister.

Part XI

Notwithstanding Part I, income tax shall be charged on the income of--

(a) a participant other than a participant which is a resident company consisting of income distributed to that participant referred to in section 109e which is derived from Malaysia at the rate of ... ... ... 8% of gross; and

(b) a participant which is a non-resident company consisting of income distributed to that participant referred to in section 109E which is derived from Malaysia at the rate of ... ... ... 26% of gross for the year of assessment 2008 and 25% of gross for the subsequent years of assessment. 

Part XII

Notwithstanding Part I and Part II, income tax shall be charged on the chargeable income of a family fund referred to in section 60AA, other than income arising from family solidarity re-takaful business and inward family solidarity re-takaful business, of a resident or non-resident operator at the rate of ... ... ... 8 per cent.

Part XIII

Notwithstanding Parts I and II but subject to Parts X, XI and XII, income tax shall be charged on the income of a non-resident person consisting of gains or profits falling under paragraph 4(f) which is derived from Malaysia at the rate of 10% of gross.

Part XIV

1. Notwithstanding Part I, income tax shall be charged for a year of assessment on the chargeable income of an individual who is a knowledge worker and residing in a specified region in respect of having or exercising employment with a person who is carrying on a qualified activity in a specified region at the rate of 15 per cent on every ringgit of that chargeable income.

2. In this Part--

(a) the knowledge worker, qualified activity and specified region referred to in paragraph 1; and

(b) where the individual has income from a source other than the employment referred to in paragraph 1 or where subsection 45(2) applies, the chargeable income of the individual referred to in that paragraph, shall be as determined by the Minister by rules made under this Act.

Part XV

1. Notwithstanding Part I, income tax shall be charged for a specified year of assessment on the chargeable income of an approved individual under the Returning Expert Programme in respect of having or exercising employment with a person in Malaysia at the rate of 15 per cent on every ringgit of that chargeable income.

2. In this Part--

(a) an approved individual and the specified year of assessment referred to in paragraph 1; and

(b) where the individual has income from a source other than the employment referred to in paragraph 1 or where subsection 45(2) applies, the chargeable income of the individual referred to in that paragraph, shall be as determined by the Minister by rules made under this Act.

Part XVI

Notwithstanding Part I, income tax shall be charged for a year of assessment on the total amount received by an individual in respect of withdrawal from a deferred annuity or a private retirement scheme where such withdrawal is made before that individual reaches the age of 55 (other than by reason of permanent total disablement, serious disease, mental disability, death or permanently leaving Malaysia) at the rate of 8 per cent on every ringgit of that contribution withdrawn.

Unannotated Statutes of Malaysia - Principal Acts/INCOME TAX ACT 1967 Act 53/INCOME TAX ACT 1967 ACT 53/Schedule 2

Schedule 2

[Section 34]

Deductions for Capital Expenditure on Mines

Qualifying mining expenditure

1. Subject to paragraph 2, qualifying mining expenditure for the purposes of this Schedule is expenditure which is incurred in connection with the working of a mine or in preparation for the working of a mine--

(a) on the acquisition of the mine or rights in or over the mine;

(b) on searching for, on discovering and testing or on winning access to deposits of minerals;

(c) on the construction of any works or buildings which, when the mine ceases to be worked, are likely to be of little or no value to any person except in connection with the working of another mine; or

(d) on development, general administration or management before the production of minerals begins or during any period when minerals are not being produced. 

2. Where a deduction has been made under section 44 pursuant to Schedule 4 (or under any corresponding provision of any of the repealed laws as defined in Schedule 9) in respect of any expenditure, and that expenditure has not been added to any aggregate income under paragraph 43(1)(c) pursuant to subparagraph 5(a) of Schedule 4, that expenditure shall be deemed not to be qualifying mining expenditure for the purposes of this Schedule.

Deductions for qualifying mining expenditure

3. Subject to this Schedule, where the business of a person consists or mainly consists of the working of a mine with or without other mines (that business and that person being in this Schedule referred to as the relevant business and the operator respectively) and the operator has incurred qualifying mining expenditure in relation to that mine, then, in the ascertainment of the adjusted income of the operator for the basis period for a year of assessment from the relevant business there shall be allowed pursuant to this Schedule as a deduction under section 34 from the gross income for that period from the relevant business an amount arrived at by dividing the residual expenditure at the end of that period by the residual life at the beginning of that period.

4. (1) The operator shall, when he commences working a mine which forms part of the relevant business and thereafter from time to time as may be necessary, furnish to the Director General a written statement containing an estimate of the life of the mine by reference to the number of years during which the winning and obtaining of minerals from the mine may be expected to continue and setting out the calculations on which that estimate is based; and the Director General, by reference to that estimate or, where no or no proper or sufficient statement has been furnished under this paragraph, by reference to a similar estimate made by him to the best of his judgment shall from time to time as he thinks appropriate fix a figure of the number of years of the life of the mine, and that number shall constitute the estimated life of the mine for the purposes of this Schedule:

Provided that, if the commencement of working was before 1 January 1968, this subparagraph shall not apply as regards that commencement but shall otherwise apply from time to time as may be necessary.

(2) Except where any provision of paragraph 15 applies, a change in the estimated life of a mine shall not affect a deduction which has been or could have been made under section 34 pursuant to this Schedule in ascertaining adjusted income from the relevant business for the basis period for a year of assessment if that basis period ended before the change.

5. Where in a case to which section 41 applies it is necessary as regards a mine to ascertain a deduction under section 34 pursuant to this Schedule in relation to an accounting period of more or less than twelve months--

(a) the residual expenditure at the end of that period shall be divided by the residual life at the beginning of that period; and

(b) the resulting figure shall be increased or decreased in the same proportion as the length of that accounting period bears to a period of twelve months and shall then constitute the amount of the deduction. 

Transfer of mine, etc.

6. Paragraphs 7 to 14 shall apply in relation to any particular mine forming part of the relevant business with respect to which the operator has incurred qualifying mining expenditure, and in those paragraphs--

"consideration" means consideration (not being in the nature of or representing income) which is monetary or non-monetary or both;

"the mine" means the particular mine in question;

"mining asset" means either the mine or an asset on or for which the operator has incurred qualifying mining expenditure in connection with or in preparation for the working of the mine;

"other property" means property which is not a mining asset;

"value" means--

(a) in relation to monetary consideration, the amount of the consideration;

(b) in relation to non-monetary consideration, the market value of the consideration at the time of the transaction to which the consideration relates. 

7. Subject to paragraph 8--

(a) where the operator transfers a mining asset for a consideration, the value of the consideration shall be deemed to be recovered expenditure in relation to the mine and to be received by the operator at the date of the transfer;

(b) where the operator receives any consideration for the granting of any right in or over the mine or any part thereof, the value of the consideration shall be deemed to be recovered expenditure in relation to the mine and the operator; and

(c) where the operator receives any amount or property by way of compensation, recoupment or otherwise for any qualifying mining expenditure (being expenditure of a kind which does not produce a mining asset) incurred by him in connection with or in preparation for the working of the mine, that amount or the market value of that property at the time of its receipt shall be deemed to be recovered expenditure in relation to the mine and the operator. 

8. Where the operator transfers a mining asset together with any other property, then--

(a) if the transfer is made for an undivided consideration and the operator and the transferee are able to agree how much of the value of the consideration should be treated as given for the mining asset and for the other property respectively, they shall within three months of the transfer jointly furnish the Director General with a written statement showing the apportionment of the consideration as so agreed and, subject to subparagraph (c), the part of that value apportioned to the mining asset shall be deemed to be recovered expenditure in relation to the mine and to be received by the operator at the date of the transfer;

(b) if the transfer is made for separate considerations, the operator shall within three months of the transfer furnish the Director General with a written statement showing the value of each consideration and, subject to subparagraph (c), the value of the consideration shown in that statement for the mining asset shall be deemed to be recovered expenditure in relation to the mine and to be received by the relevant person at the date of the transfer; and

(c) if the Director General is not satisfied with the apportionment mentioned in subparagraph (a) or with any value shown in the statement mentioned in subparagraph (b), or if there is a failure to furnish a statement in accordance with either of those subparagraphs, the Director General shall determine to the best of his judgment the value of the consideration for the mining asset, and the value so determined shall be deemed to be recovered expenditure in relation to the mine and to be received by the operator at the date of the transfer. 

9. Where there is a transfer by the operator of a mining asset (with or without any other property) together with a grant by the operator of a right of the kind mentioned in subparagraph 7(b), then, for the purposes of paragraph 8--

(a) the grant shall be treated as forming part of the transfer of that asset; and

(b) the right shall be treated as forming part of that asset, 

and that paragraph shall apply accordingly with any necessary modifications.

10. Where the operator transfers a mining asset (with or without other property) either--

(a) for an undivided consideration (as regards that asset and that other property, if any) together with an amount or property of the kind mentioned in subparagraph 7(c); or

(b) for separate considerations (as regards that asset and that other property, if any) together with an amount or property of that kind, paragraph 8 shall apply with any necessary modifications.

11. For the purposes of paragraphs 7 to 10--

(a) if any consideration consists partly of money and partly of non-monetary property, the value of the monetary part of the consideration and the value of the non-monetary part thereof shall, whenever necessary, be aggregated or aggregated and apportioned, as the case may require;

(b) if the subject matter of a transfer consists of two or more mines or of a right in or over two or more mines, any amount apportioned under those paragraphs to those mines shall be divided and apportioned to each of those mines in the proportion that the residual expenditure in relation to each of those mines at the date of the transfer bears to the total of the residual expenditure in relation to those mines. 

12. Where the operator transfers the mine and at the date of the transfer the residual expenditure ascertained immediately before that date exceeds the difference between--

(a) the total amount of all the operator's recovered expenditure received on or before that date; and

(b) the total amount of all his recovered expenditure received prior to that date, the amount of the excess shall be allowed pursuant to this Schedule under section 34 as a deduction from his gross income from the relevant business for the basis period (being the basis period appropriate to the relevant business for a year of assessment) in which the transfer was made.

13. (1) Where the operator has incurred expenditure in relation to the transfer to him of the mine and any other matter or thing appertaining to the mine, that expenditure shall be treated as qualifying mining expenditure incurred by the operator in respect of the mine.

(2) (Deleted by Act A226).

14. Where in relation to the mine there takes place a transaction as a result of which an amount would (but for this paragraph) fall to be treated under any provision of paragraphs 6 to 13 as recovered expenditure of the operator in relation to the mine and--

(a) the operator is a person over whom the other party to the transaction has control;

(b) that other party is a person over whom the operator has control;

(c) some other person has control over both the operator and that other party;

(d) the transaction takes place pursuant to a scheme of reconstruction or amalgamation of companies; or

(e) the Director General is of the opinion that the transaction is or forms part of a transaction to which section 140 applies, the residual expenditure referable to the mine or any other mining asset immediately before the date of that first-mentioned transaction shall be deemed in the hands of the operator to be recovered expenditure received at that date and in the hands of that other party to be qualifying mining expenditure incurred at that date; and paragraphs 6 to 13 shall not apply in relation to that first-mentioned transaction.

Cessation of Working

15. Where in the basis period for a year of assessment the operator permanently ceases to work a mine (otherwise than upon his death of the transfer of the mine by him to any other person), recovered expenditure received by him after the date of the cessation of working shall (notwithstanding any provision of paragraphs 7 to 10) be treated as if it had been received on that date and--

(a) if he so elects, the deductions to be made under section 34 in respect of amounts allowed pursuant to this Schedule in computing his adjusted income from the relevant business for that basis period and for the basis period for each of the four immediately preceding years of assessment (or, if he commenced to work the mine in the basis period for one of those four years other than the earliest thereof, for that first-mentioned basis period and for the basis period being a basis period in which the mine was worked by him for each of the preceding years of assessment) shall be computed as regards each such basis period as if the reference in paragraph 3 to the residual life at the beginning of the basis period were a reference to what the residual life would be if the estimated life were taken to be equal to the number of complete years from the beginning of the first such basis period to the date of cessation of working; and

(b) such repayments of tax and assessments shall be made as are necessary to give effect to this paragraph. 

Supplemental provisions

16. Where two or more separate and distinct sets of mining operations are carried on over a source of minerals and none of those sets of operations is carried on contiguously to another of those sets of operations, each of those sets of operations shall be treated for the purposes of this Schedule as being carried on in the working of a separate mine:

Provided that, where a deduction has been given under section 34 in respect of any amount allowed pursuant to this Schedule for qualifying mining expenditure in respect of any such separate mine, no amount shall be allowed pursuant to this Schedule for that expenditure in respect of any other such separate mine and that expenditure shall not be treated as qualifying mining expenditure incurred in respect of that other mine.

17. (1) A person shall not be treated as working a mine for the purposes of this Schedule unless he is actively engaged in working the mine and his gross income from a business of his includes the proceeds of sale of minerals won or obtained by working the mine.

(2) A person is not actively engaged in working a mine within the meaning of subparagraph (1) if he has sublet the mine or authorized any other person to work the mine on payment of a premium, rent or tribute (by whatever name called).

18. Where--

(a) the relevant business consists of or includes the working of a mine; and

(b) the working of that mine begins at any time in the basis period appropriate to the relevant business for a year of assessment, the number of years of the life of the mine at the time when the working of that mine began shall, in ascertaining the residual life for the purposes of paragraph 3, be deemed to be the number of years of the life of the mine at the beginning of that period.

19-21. (Deleted by Act A226)).

22. In this Schedule--

"estimated life", in relation to a mine, means the figure of the number of years of the life of the mine fixed from time to time by the Director General under subparagraph 4(1) as the estimated life of the mine;

"recovered expenditure" means any amount ascertained in accordance with paragraphs 6 to 11 or paragraph 14 to be recovered expenditure in relation to any particular mine forming part of the relevant business;

"residual expenditure", in relation to any particular mine forming part of the relevant business and to any particular date, means the total qualifying mining expenditure incurred in respect of that mine before the date by the operator, reduced by the amount of--