755 - FINANCE ACT 2013

Finance 1 laws OF MalaYsIa act 755 FInance act 2013 2 Laws of Malaysia A ct 755 Date of Royal Assent ... ... 27 December 2012 Date of publication in the Gazette ... ... ... 10 January 2013 Publisher’s copyright c Percetakan nasIOnal MalaYsIa berhad All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording and/or otherwise without the prior permission of Percetakan nasional Malaysia berhad (appointed Printer to the Government of Malaysia). Finance 3 laws OF MalaYsIa act 755 FInance act 2013 ARRANgemeNt of sectioNs chapter i PReLimiNARY section 1. short title 2. Amendment of Acts chapter ii part I AmeNDmeNts to the iNcome tAx Act 1967 3. commencement of amendments to the income tax Act 1967 4. Amendment of section 2 5. New section 4b 6. Amendment of section 6 7. Amendment of section 8 8. Amendment of section 21 9. Amendment of section 21a 10. Amendment of section 24 11. Amendment of section 25 12. Amendment of section 27 13. New section 34d 14. amendment of section 39 15. amendment of section 44 16. Amendment of section 44a 17. Amendment of section 46 18. Amendment of section 48 19. Amendment of section 60aa 4 Laws of Malaysia A ct 755 section 20. Amendment of section 60g 21. Amendment of section 60I 22. Amendment of section 65a 23. New section 75b 24. Amendment of section 77 25. Amendment of section 77a 26. Amendment of section 91 27. Amendment of section 103 28. Amendment of section 107b 29. Amendment of section 107c 30. New sections 109g and 109h 31. Amendment of section 111 32. Amendment of section 131 33. Amendment of schedule 1 34. Amendment of schedule 2 35. Amendment of schedule 3 36. Amendment of schedule 4 37. Amendment of schedule 6 38. Amendment of schedule 7a part II sAViNgs AND tRANsitioNAL 39. Application of this Part 40. Balance of allowances and adjusted loss of a person in respect of interest income chapter iii AmeNDmeNts to the stAmP Act 1949 41. commencement of amendments to the stamp Act 1949 42. Amendment of section 8 Finance 5 section 43. Amendment of section 9 44. New section 60a 45. Amendment of first schedule 46. Amendment of second schedule chapter iV AmeNDmeNts to the PetRoLeum (iNcome tAx) Act 1967 47. commencement of amendments to the Petroleum (income tax) Act 1967 48. Amendment of section 18 49. Amendment of section 39 50. Amendment of section 50 51. New section 57a 52. Amendment of section 66 53. New section 72a 54. Amendment of section 83 chapter V AmeNDmeNts to the ReAL PRoPeRtY gAiNs tAx Act 1976 55. commencement of amendments to the Real Property gains tax Act 1976 56. Amendment of section 2 57. Amendment of section 13 58. Amendment of section 14 59. Amendment of section 15 60. Amendment of section 19 61. Amendment of section 21b 62. Amendment of section 24 63. Amendment of schedule 1 64. Amendment of schedule 4 6 Laws of Malaysia A ct 755 Finance 7 laws OF MalaYsIa act 755 FInance act 2013 An Act to amend the income tax Act 1967, the stamp Act 1949, the Petroleum (income tax) Act 1967 and the Real Property gains tax Act 1976. [ ] enacted by the Parliament of malaysia as follows: chapter i PReLimiNARY short title 1. this Act may be cited as the finance Act 2013. amendment of acts 2. the income tax Act 1967 [Act 53], the stamp Act 1949 [Act 378], the Petroleum (income tax) Act 1967 [Act 543] and the Real Property gains tax Act 1976 [Act 169] are amended in the manner specified in chapters ii, iii, iV and V respectively. 8 Laws of Malaysia A ct 755 chapter ii part I AmeNDmeNts to the iNcome tAx Act 1967 commencement of amendments to the Income tax act 1967 3. (1) subparagraphs 4(a)(i) and (iii), paragraphs 4(b) and (c), sections 7 and 23, and paragraph 35(c) in relation to business trust come into operation on the coming into operation of the corresponding provisions of the capital markets and services (Amendment) Act 2012 [Act A1437] relating to business trust. (2) subparagraph 4(a)(ii), sections 20 and 22, and paragraph 35(a) come into operation on the coming into operation of this Act. (3) subparagraphs 4(a)(iv), (v) and (vi), sections 7, 8, 9, 14, 15, 23, 24, 25, 27, 28 and 29, paragraphs 33(b) and (c), and paragraphs 35(c), 35(f) and 37(a) in relation to limited liability partnership come into operation on the coming into operation of the Limited Liability Partnerships Act 2012 [Act 743]. (4) subparagraph 4(a)(vii), sections 5, 10, 13, 18, paragraphs 33(a) and (d), paragraphs 35(d) and (e), paragraphs 38(a), (b), (c), (d), (e), (g), (h) and (i), and sections 39 and 40 have effect for the year of assessment 2013 and subsequent years of assessment. (5) sections 6 and 30, and paragraph 33(e) come into operation on 1 January 2013. (6) sections 11, 12, 16, 26, 31, 32 and 34, paragraph 35(b), section 36 and paragraph 38(f) come into operation on 1 January 2014. (7) section 17 has effect for the years of assessment 2012, 2013, 2014, 2015, 2016 and 2017. (8) sections 19 and 21, and paragraph 37(b) have effect for the year of assessment 2012 and subsequent years of assessment. Finance 9 amendment of section 2 4. the income tax Act 1967, which is referred to as the “principal Act” in this chapter, is amended in section 2— (a) in subsection (1)— (i) by inserting after the definition of “business” the following definition: ‘ “business trust” has the same meaning assigned to it in the capital markets and services Act 2007[Act 671];’; (ii) in the definition of “central Bank”, by substituting for the words “central Bank of malaysia Act 1958 [Act 519]” the words “central Bank of malaysia Act 2009 [Act 701]”; (iii) in the definition of “company”, by inserting after the word “malaysia” the words “and a business trust”; (iv) by inserting after the definition of “lease” the following definition: ‘ “limited liability partnership” means a limited liability partnership registered under the Limited Liability Partnerships Act 2012 [Act 743];’; (v) in the definition of “partnership”, by inserting after the words “a partner in a partnership” the words “, a limited liability partnership”; (vi) in the definition of “person”, by inserting after the words “body of persons” the words “, a limited liability partnership”; and (vii) by inserting after the definition of “total income” the following definition: ‘ “treasury share” means a share of a company that was previously issued but was repurchased, redeemed or otherwise acquired by such company and not cancelled;’; 10 Laws of Malaysia A ct 755 (b) in subsection (9), by inserting after the words “shall exclude” the words “a business trust and”; and (c) by inserting after subsection (10) the following subsection: “(11) in relation to a business trust, any reference in this Act to shares or ordinary share capital, shareholders and dividend shall be read as including a reference to units or derivatives of units, unit holders and distributions, respectively.”. new section 4b 5. the principal Act is amended by inserting after section 4a the following section: “non-business income 4b. for the purpose of section 4, gains or profit from a business shall not include any interest that first becomes receivable by a person in the basis period for a year of assessment other than interest where subsection 24(5) applies.”. amendment of section 6 6. subsection 6(1) of the principal Act is amended— (a) by substituting for the full stop at the end of paragraph (k) a semicolon; and (b) by inserting after paragraph (k) the following paragraph: “(l) subject to section 109g but notwithstanding any other provisions of this Act, income tax shall be charged for a year of assessment upon the income of an individual consisting of a withdrawal of his contribution made to a private retirement scheme where the withdrawal is made by that individual before reaching the age of fifty-five (other than by reason of death or permanently leaving malaysia) at the appropriate rate as specified under Part xVi of schedule 1.”. Finance 11 amendment of section 8 7. section 8 of the principal Act is amended— (a) by inserting after subsection (1) the following subsection: “(1a) Notwithstanding subsection (1), for the purposes of this Act— (a) a limited liability partnership carrying on a business is resident in malaysia for the basis year for a year of assessment if at any time during that basis year the management and control of its business or of any one of its businesses, as the case may be, are exercised in malaysia; (b) any other limited liability partnership is resident in malaysia for the basis year for a year of assessment if at any time during that basis year the management and control of its affairs are exercised in malaysia by its partners; (c) a business trust is resident in malaysia for the basis year for a year of assessment if the trustee manager of that business trust is resident in malaysia and a trustee manager of a business trust is resident for the basis year for a year of assessment if— (i) the trustee manager in his capacity as such carries on such business trust in malaysia; and (ii) the management and control of the business of such business trust is exercised in malaysia.”; and (b) in subsection (2), by inserting after the word “company” wherever appearing the words “, limited liability partnership, business trust”. 12 Laws of Malaysia A ct 755 amendment of section 21 8. section 21 of the principal Act is amended— (a) in the shoulder note, by inserting after the word “company” the words “, limited liability partnership”; and (b) by inserting after the word “company” the words “, limited liability partnership”. amendment of section 21A 9. section 21a of the principal Act is amended— (a) in the shoulder note, by inserting after the word “company” the words “, limited liability partnership”; and (b) by inserting after the word “company” wherever appearing the words “, limited liability partnership” except in subsection (5). amendment of section 24 10. section 24 of the principal Act is amended in subsection (5), by substituting for the words “and the business is one which includes the regular lending of money” the words “of lending of money and the business is one which is licensed under any written law”. amendment of section 25 11. section 25 of the principal Act is amended— (a) in subsection (3), by substituting for the word “five” wherever appearing the word “four”; (b) in subparagraph (4)(a)(i), by substituting for the word “five” wherever appearing the word “four”; (c) in paragraph (4)(b), by substituting for the word “five” the word “four”; Finance 13 (d) in paragraph (4)(c), by substituting for the word “five” wherever appearing the word “four”; and (e) in the proviso to subsection (5), by substituting for the word “five” wherever appearing the word “four”. amendment of section 27 12. section 27 of the principal Act is amended— (a) in paragraph (2)(b), by substituting for the word “five” the word “four”; (b) in paragraph (2)(c), by substituting for the word “five” wherever appearing the word “four”; and (c) in the proviso to subsection (3), by substituting for the word “five” wherever appearing the word “four”. new section 34d 13. the principal Act is amended by inserting after section 34c the following section: “special deduction for expenditure on treasury shares 34d. (1) Notwithstanding section 33 but subject to this section, in ascertaining the adjusted income of a company from a business for the basis period for a year of assessment, a deduction shall be made from the gross income for that period any expenses incurred by that company in acquiring treasury shares. (2) the amount of deduction referred to in subsection (1)— (a) shall be the cost of acquiring the treasury shares which are transferred to its employee less any amount payable by that employee for such treasury shares; and (b) shall be allowed in the basis period for a year of assessment where the employee exercised his rights to acquire such treasury shares. 14 Laws of Malaysia A ct 755 (3) for the purpose of subsection (2), the cost of acquiring treasury shares which are transferred to its employee shall be determined on the basis that the treasury shares acquired by the company at an earlier point in time are deemed to be transferred first. (4) Where any amount payable by an employee for any treasury shares transferred to him exceeds the cost to the company of acquiring the treasury shares transferred as provided under subsection (3), the amount of the excess shall be credited to an account to be kept by the company for the purpose of this section. (5) Where there is any balance in the account kept by the company under subsection (4) and any treasury shares are subsequently transferred by the company to any employee under subsection (1), the cost to the company of acquiring the treasury shares as determined under subsection (3) shall be reduced— (a) where the amount of the balance is equal to or exceeds the amount of the cost, to zero; or (b) where the amount of the balance is less than the amount of the cost, by the amount of the balance, and the amount of reduction shall be debited to the account. (6) for the purpose of this section, a company transfers treasury shares held by it to an employee when the employee acquires the legal and beneficial interest in the treasury shares. (7) Where a holding company transfers treasury shares held by it to any employee employed at any time by a subsidiary company of the holding company who has the right to acquire such shares— (a) no deduction shall be allowed to the holding company under subsection (1); (b) if any amount is paid or payable by the subsidiary company to the holding company for the transfer of the treasury shares, there shall be allowed to Finance 15 the subsidiary company, on the date of the transfer of the shares or of the payment to the holding company for the shares, whichever is the later, a deduction under subsection (1) for the amount, or an amount equal to the cost to the holding company of acquiring the treasury shares transferred to the employee of the subsidiary less any amount payable by that employee for the treasury shares, whichever is less.”. amendment of section 39 14. subsection 39(1) of the principal Act is amended— (a) by deleting the word “or” at the end of subparagraph (l) (vii); (b) in paragraph (m), by substituting for the full stop at the end of the paragraph the words “; or”; (c) by inserting after paragraph (m) the following paragraph: “(n) any remuneration or any similar payment paid to a partner of a limited liability partnership where such remuneration or payment is not specified or provided in the limited liability partnership agreement made in accordance with section 9 of the Limited Liability Partnerships Act 2012.”. amendment of section 44 15. section 44 of the principal Act is amended by inserting after subsection (5d) the following subsection: “(5e) Where a partnership or a company is converted into a limited liability partnership in accordance with section 29 or 30 of the Limited Liability Partnerships Act 2012, the amount ascertained under subsection 44(4) or (5) for any relevant year in respect of that partnership or company shall be allowed for the purposes of ascertaining the aggregate income of that limited liability partnership for a year of assessment following the relevant year.”. 16 Laws of Malaysia A ct 755 amendment of section 44A 16. Paragraph 44a(9)(a) of the principal Act is amended by substituting for the word “six” the word “five”. amendment of section 46 17. Paragraph 46(1)(k) of the principal Act is amended by substituting for the word “three” wherever appearing the word “six”. amendment of section 48 18. section 48 of the principal Act is amended— (a) in subparagraph (3)(a)(i), by substituting for the word “four” the word “six”; and (b) in subparagraph (3)(a)(ii), by substituting for the words “four thousand ringgit” the words “six thousand ringgit”. amendment of section 60AA 19. section 60aa of the principal Act is amended by inserting after subsection (15) the following subsection: “(15a) in arriving at the total income of an operator for a year of assessment— (a) the adjusted loss from a source or sources of an operator for that year of assessment other than from a source consisting of a family fund, shall be available as deduction against the aggregate statutory income (excluding the statutory income from a source consisting of a family fund) of an operator; and (b) any unabsorbed loss ascertained under subsection 44(4) or (5) for that year of assessment shall not be deducted against the statutory income of the family fund of the operator for the subsequent years of assessment.”. Finance 17 amendment of section 60g 20. the principal Act is amended in subsection 60g(6), in the definition of “foreign fund management company”, by substituting for the words “securities industry Act 1983 [Act 280]” the words “capital markets and services Act 2007 [Act 671]”. amendment of section 60i 21. subsection 60I(4) of the principal Act is amended by substituting for the words “the principles of mudharabah, musyarakah, ijarah or istisna’ ” the words “syariah principles”. amendment of section 65A 22. Paragraph 65a(a) of the principal Act is amended by inserting after the words “co-operative education trust fund” the words “or to a co-operative Development trust fund”. new section 75b 23. the principal Act is amended by inserting after section 75a the following section: “limited liability partnership and business trust 75b. (1) the responsibility for doing all acts and things required to be done— (a) by or on behalf of a limited liability partnership for the purposes of this Act shall lie jointly and severally— (i) with the compliance officer who is appointed amongst the partners of the limited liability partnership; or (ii) if no compliance officer is appointed as such, any one or all of the partners thereof; and (b) by or on behalf of a business trust for the purposes of this Act shall lie jointly and severally with the trustee manager of such business trust. 18 Laws of Malaysia A ct 755 (2) for the purpose of this section, “compliance officer” has the meaning assigned to it in section 27 of the Limited Liability Partnerships Act 2012.”. amendment of section 77 24. section 77 of the principal Act is amended— (a) in the shoulder note, by inserting after the word “company” the words “, limited liability partnership”; and (b) by inserting after the word “company” the words “, limited liability partnership”. amendment of section 77A 25. section 77a of the principal Act is amended— (a) in the shoulder note, by inserting after the word “company” the words “, limited liability partnership”; and (b) by inserting after the word “company” wherever appearing the words “, limited liability partnership”. amendment of section 91 26. section 91 of the principal Act is amended— (a) in subsection (1), by substituting for the word “six” the word “five”; (b) in the proviso to subsection (2), by substituting for the word “six” the word “five”; and (c) in subsection (4), by substituting for the word “six” the word “five”. amendment of section 103 27. section 103 of the principal Act is amended in paragraph (12)(a), by substituting for the words “or co-operative society” the words “, co-operative society or limited liability partnership”. Finance 19 amendment of section 107b 28. subsection 107b(1) of the principal Act is amended by substituting for the words “or co-operative society” the words “, co-operative society or limited liability partnership”. amendment of section 107c 29. section 107c of the principal Act is amended— (a) in subsection (1), by inserting after the word “company” the words “, limited liability partnership”; (b) in subsection (4), by inserting after the words “4a applies,” wherever appearing the words “limited liability partnership,”; (c) in subsection (7), by inserting after the word “company” the words “, limited liability partnership”; and (d) in subsection (8), by inserting after the word “company” wherever appearing the words “, limited liability partnership”. new sections 109g and 109h 30. the principal Act is amended by inserting after section 109f the following sections: “deduction of tax from income derived from withdrawal of contribution made to a private retirement scheme 109g. (1) Where a person (in this section referred to as “the payer”) makes payment to an individual (in this section referred to as “the recipient”) in relation to a withdrawal of contribution before reaching the age of fifty-five (other than by reason of death or permanently leaving malaysia) from a fund administered by that payer under a private retirement scheme, the payer shall upon paying the amount, deduct from that amount, tax at a rate applicable to such payment, 20 Laws of Malaysia A ct 755 and (whether or not tax is so deducted) shall within one month after paying the amount render an account and pay the amount of that tax to the Director general: Provided that the Director general may under special circumstances allow extension of time for the amount of tax deducted to be paid over. (2) Where the payer fails to pay any amount due from him under subsection (1), the amount which he fails to pay shall be increased by a sum equal to ten per cent of the amount which he fails to pay, and that amount and the increased sum shall be a debt due from him to the government and shall be payable forthwith to the Director general. (3) Where in pursuance of this section any amount is paid to the Director general by the payer or recovered by the Director general from the payer and if the payer has not deducted that amount in paying the amount under subsection (1) with respect to which that amount relates, the payer may recover that amount from the recipient as a debt due to the payer. (4) Notwithstanding the foregoing subsections, where the amount due from the payer under subsection (1) is increased by a sum under subsection (2), the Director general may in his discretion for any good cause shown remit the whole or any part of that sum and, where the amount remitted has been paid, the Director general shall repay the same. (5) in this section, “payer” refers to a private retirement scheme provider as approved under section 139q of the capital markets and services Act 2007 to provide and manage a private retirement scheme. appeal by the payer 109h. (1) A payer referred to in sections 109, 109b or 109f may, within thirty days (or any period extended by the Director general) from the date an amount is due to be made to the Director general under that section, appeal to the special commissioners by reason that such amount is not liable to be paid under this Act and the provision of this Act relating to appeals shall apply accordingly with any necessary modification. Finance 21 (2) Where an amount is due from the payer to a non-resident person, this section shall not apply or cease to apply if— (a) an appeal has been filed to the Special Commissioners by the non-resident person to whom the payer was liable to pay the amount of interest or royalty, or payment under section 4a or paragraph 4(f), of which the amount due under subsection (1) relates; (b) such payment to the non-resident made by the payer is disallowed as deduction under section 39 in arriving at the adjusted income of the payer; or (c) the amount due under subsection (1) has not been made to the Director general by the payer.”. amendment of section 111 31. subsection 111(2) of the principal Act is amended by substituting for the word “six” wherever appearing the word “five”. amendment of section 131 32. subsection 131(1) of the principal Act is amended by substituting for the word “six” the word “five”. amendment of schedule 1 33. schedule 1 to the principal Act is amended— (a) in Part i, by substituting for paragraph 1 the following paragraph: “1. except where paragraphs 1a, 2, 2a and 3 provide otherwise, income tax shall be charged for a year of assessment upon the chargeable income of every person at the following rates: Chargeable Income RM Rate of Income Tax for every ringgit of the first 5,000 0 per cent for every ringgit of the next 15,000 2 per cent 22 Laws of Malaysia A ct 755 Chargeable Income RM Rate of Income Tax for every ringgit of the next 15,000 6 per cent for every ringgit of the next 15,000 11 per cent for every ringgit of the next 20,000 19 per cent for every ringgit of the next 30,000 24 per cent for every ringgit exceeding 100,000 26 per cent”; (b) in paragraph 2— (i) by substituting for the comma at the end of subparagraph (e) a semicolon; and (ii) by inserting after subparagraph (e) the following subparagraph: “(f) a limited liability partnership other than a limited liability partnership to which paragraph 2d applies.”; (c) by inserting after paragraph 2c the following paragraphs: “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: Chargeable Income RM Rate of Income Tax for every ringgit of the first 500,000 20 per cent for every ringgit exceeding 500,000 25 per cent 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 Finance 23 (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.”; (d) by substituting for Part iV the following Part: “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: Chargeable Income RM Rate of Income Tax for every ringgit of the first 30,000 0 per cent for every ringgit of the next 30,000 5 per cent for every ringgit of the next 40,000 10 per cent for every ringgit of the next 50,000 15 per cent for every ringgit of the next 100,000 20 per cent for every ringgit of the next 250,000 22 per cent for every ringgit of the next 250,000 24 per cent for every ringgit exceeding 750,000 25 per cent”; and (e) by inserting after Part xV the following Part: “Part xVi Notwithstanding Part i, income tax shall be charged for a year of assessment on any amount of contribution withdrawn by an individual from a private retirement scheme before that individual reaches the age of 55 (other than by reason of death or permanently leaving malaysia) at the rate of 8 per cent on every ringgit of that contribution withdrawn.”. 24 Laws of Malaysia A ct 755 amendment of schedule 2 34. subparagraph 15(a) of schedule 2 to the principal Act is amended by substituting for the word “five” wherever appearing the word “four”. amendment of schedule 3 35. schedule 3 to the principal Act is amended— (a) by deleting paragraph 26; (b) in paragraph 27, by substituting for the word “six” the word “five”; (c) in subparagraph 38(2), by substituting for the words “divisible profits of partnership” the words “divisible profits of partnership, or in relation to a limited liability partnership, means the right to a share of more than one-half of the capital contribution whether in cash or in kind of the limited liability partnership and in relation to business trust, means the right to not less than fifty per cent of residual profits of the business trust available for distribution, or not less than fifty per cent of any residual assets of the business trust available for distribution on a winding up”; (d) in paragraph 38a, by substituting for subparagraph (2) the following subparagraph: “(2) for the purpose of this paragraph— (a) “unit trust” has the same meaning assigned to it in section 61a; and (b) “company” means a company which holds not less than fifty per cent of residual profits of the unit trust available for distribution, or not less than fifty per cent of any residual assets of the unit trust available for distribution on a winding up.”; and (e) by inserting after paragraph 61 the following paragraph: “61A. (1) Notwithstanding paragraph 48 or 61, as the case may be, but subject to this paragraph, where in the basis period for a year of assessment an asset for which qualifying capital expenditure has been incurred is classified as asset held for sale in accordance with generally accepted accounting principles, such asset shall be deemed to have ceased to be used for the purposes of that paragraph. Finance 25 (2) Where subparagraph (1) applies and the asset is sold in the basis period the asset is classified as asset held for sale, the disposal value of the asset for the purposes of this schedule shall be an amount equal to its market value at the date it was classified as asset held for sale or the net proceeds of the sale, whichever is greater. (3) Where in the basis period for a year of assessment an asset for which qualifying capital expenditure has been incurred is classified as asset held for sale in accordance with generally accepted accounting principles, such asset shall be deemed to have ceased to be used for the purposes of paragraph 48 or 61, as the case may be, in the following basis period— (a) where the asset is sold in the following basis period; or (b) where the asset is not sold after the end of the following basis period. (4) for the purpose of subsection (3), the disposal value of the asset shall be— (a) in the case where the asset is sold in the following basis period, an amount equal to its market value at the end of the basis period such asset is held for sale or the net proceeds of the sale, whichever is greater; (b) in the case where the asset is not sold in the following basis period, the market value of the asset at the end of that following basis period. (5) Where paragraph (4) applies, in determining the residual expenditure of such asset for that following basis period, the total qualifying expenditure incurred by that person shall be reduced by an amount of annual allowance which would have been made to him for that following basis period as if the asset had been in use in that following basis period for the purpose of business of his. (6) Where an asset deemed ceased to be used in accordance with subparagraph (3)(b) is brought into use by the person in a business of his in a basis period for any year of assessment after the basis period the asset is deemed ceased to be used— (a) that person shall be deemed to have incurred qualifying capital expenditure for that asset equal to its market value at the date it is brought into use for the purpose of that business; and (b) no initial allowance shall be made to that person in relation to an asset under subparagraph (a). (7) in this paragraph, “market value” in the case of an industrial building, means the market value as determined by a valuation officer employed by the government.”; and 26 Laws of Malaysia A ct 755 (f) by inserting after paragraph 75a the following paragraph: “75AA. Where a partnership or a company is converted into a limited liability partnership in accordance with section 29 or 30 of the Limited Liability Partnerships Act 2012, any allowance or aggregate amount of allowances for a year of assessment which has not been so made to that partnership or company as ascertained under paragraph 75 shall be made to that limited liability partnership for the purposes of this schedule and section 42 for the following year of assessment.”. amendment of schedule 4 36. subparagraph 15(b) of schedule 4 to the principal Act is amended by substituting for the word “six” the word “five”. amendment of schedule 6 37. schedule 6 of the principal Act is amended— (a) by inserting after paragraph 12b the following paragraph: “12c. Any profit paid, credited or distributed to partners by a limited liability partnership.”; and (b) by inserting after paragraph 20 the following paragraph: “20A. Any income of a life insurer or takaful operator from an investment made out of a life fund or family fund in respect of a deferred annuity established in accordance with the Retirement savings standards approved by the central Bank of malaysia.”. amendment of schedule 7A 38. schedule 7a of the principal Act is amended— (a) in subparagraph 1(b), by deleting after the words “subparagraph 8(a)” the words “or (b)”; Finance 27 (b) by deleting paragraph 1c; (c) in paragraph 2, by substituting for the words “1, 1a or 1c” the words “1 or 1a”; (d) in paragraph 2a, by substituting for the words “1, 1a or 1c” the words “1 or 1a”; (e) in paragraph 3, by substituting for the words “1, 1a or 1c” the words “1 or 1a”; (f) in paragraph 6, by substituting for the word “six” the word “five”; (g) by deleting subparagraph 8(d); (h) by deleting subparagraph 9(g); and (i) by deleting subparagraph 9(gg). PARt ii sAViNgs AND tRANsitioNAL application of this Part 39. Where there is any inconsistency between any provision of this Part and any provision of the principal Act, the provision of the principal Act shall be void to the extent of the inconsistency. balance of allowances and adjusted loss of a person in respect of interest income 40. (1) the amount of adjusted loss of a person in respect of interest from a source consisting of a business for year of assessment 2012 as ascertained under subsection 44(4) or (5) prior to the coming into operation of sections 5 and 10 of this Act— (a) shall for the year of assessment 2013 be deducted in accordance with subsection 43(2) of the principal Act against the aggregate statutory income of that person from a source consisting of a business; or 28 Laws of Malaysia A ct 755 (b) where there is no aggregate statutory income from that source consisting of a business for the year of assessment 2013, the amount shall be deducted against the adjusted income of that person from a source other than a source consisting of a business for the year of assessment 2013 and subsequent years of assessment until the amount is fully deducted. (2) the amount of allowance in respect of interest from a source consisting of a business which has not been so made to a person for year of assessment 2012 as ascertained under paragraph 75 of schedule 3 to the principal Act prior to the coming into operation of sections 5 and 10 of this Act— (a) shall for the year of assessment 2013 be made to that person for the purposes of the schedule and section 42 of the principal Act from any source consisting of a business of that person; or (b) where the person has no source consisting of a business for a year of assessment 2013, the amount of allowance shall be deducted against the adjusted income of that person from a source other than a source from a business for the year of assessment 2013 and subsequent years of assessment until the amount is fully deducted. chapter iii AmeNDmeNts to the stAmP Act 1949 commencement of amendments to the stamp act 1949 41. this chapter commences on the coming into operation of this Act. amendment of section 8 42. the stamp Act 1949, which is referred to as the “principal Act” in this chapter, is amended in section 8, by inserting after subsection (5) the following subsections: “(6) the collector or any person authorized by him in writing may, at all reasonable times, inspect any books, records and documents kept by him in connection with the issue of such licence. Finance 29 (7) for the purpose of subsection (6), the authorized person shall keep and retain the books, records and documents in connection with the issue of such licence for a period of seven years from the year in which such licence is issued. (8) Any authorized person who fails to comply with the conditions imposed in the licence under subsection (2) shall be liable to a fine of not less than four thousand ringgit and not more than ten thousand ringgit.”. amendment of section 9 43. the principal Act is amended by substituting for section 9 the following section: “authorized person to compound instrument 9. (1) subject to this section, the collector may authorize— (a) any banker, dealer or insurer to compound for the payment of duty on unstamped cheques, contract notes or policies of insurance drawn or drawn up and issued on forms to be supplied or adopted by the said banker, dealer or insurer; (b) the Registrar of companies to compound for the payment of duty on unstamped Articles of Association and memorandum of Association lodged with the said Registrar; and (c) the principal officer of tenaga Nasional Berhad to compound for the payment of duty on the unstamped tNB electricity supply form issued and supplied by the tenaga Nasional Berhad. (2) the said authorized persons shall levy upon or charge to the person to whom such instruments referred to in subsection (1) are issued the stamp duty mentioned in the first schedule. (3) the said authorized person shall pay on the 1st day of each calendar month in each year to the collector the amount due and collected thereon as duties on such unstamped 30 Laws of Malaysia A ct 755 instruments and where he fails to pay the amount on each date specified or within fourteen days immediately thereafter, he shall in addition to the amount due pay a further amount of two hundred ringgit or ten per centum of the amount due whichever is the greater and any amount due shall be recoverable as a debt due to the government. (4) the said authorized person shall deposit with the collector, as security for the due payment to the collector of any moneys payable under subsection (2), such sum, if any, as the minister of finance may direct. (5) instruments in respect of which payment of duty by way of composition has been made under this section, notwithstanding any other provision of this Act, shall be deemed to be duly stamped. (6) Where any person has been authorized to compound for the payment of duty on unstamped instrument as mentioned under paragraph 1(a), (b) or (c), the collector or any person authorized by him in writing, may, at all reasonable times, inspect any stocks of unstamped instrument held by such person and any books, records and documents kept by him in connection with the issue of such instrument. (7) for the purpose of subsection (6), the person mentioned in subsection (1) shall keep and retain the books, records and documents in connection with the issue of such Articles of Association and memorandum of Association for a period of seven years from the year in which such Articles of Association and memorandum of Association are issued.”. new section 60A 44. the principal Act is amended by inserting after section 60 the following section: “Failure to frank documents 60A. Any authorized person who, being required by law to frank any instruments, fails to do so within thirty days from the date the instrument is executed shall be liable to a fine of not less than two hundred ringgit and not more than two thousand ringgit.”. Finance 31 amendment of First schedule 45. the first schedule to the principal Act is amended in subitem 22(6) by substituting for the words “principle of Al Bai Bithamin Ajil” the word “principles”. amendment of second schedule 46. the second schedule to the principal Act is amended by inserting after item 22 the following item: “23 memorandum of sale Registrar of high court”. chapter iV AmeNDmeNts to the PetRoLeum (iNcome tAx) Act 1967 commencement of amendments to the Petroleum (Income tax) act 1967 47. (1) sections 48, 51, 53 and 54 come into operation on the coming into operation of this Act. (2) sections 49, 50 and 52 come into operation on 1 January 2014. amendment of section 18 48. the Petroleum (income tax) Act 1967, which is referred to as the “principal Act” in this chapter, is amended in section 18— (a) in paragraph (1)(h), by substituting for the proviso to that paragraph the following proviso: “Provided that— (i) this paragraph shall not apply if the payer has paid the amount of deduction of tax and the increased amount which is equal to ten 32 Laws of Malaysia A ct 755 per cent of that deduction which are due and payable under the provisions of that law; and (ii) where such tax is deducted or such amount is paid after the due date for the furnishing of a return for a year of assessment that relates to such payment, the tax or amount so paid shall not prejudice the imposition of penalty under subsection 52(2) if a deduction on such payment is made in such return or is claimed in the information given to the Director general in arriving at the adjusted income of the payer;”; and (b) by inserting after subsection (2) the following subsection: “(3) Paragraph (1)(h) shall not apply if for a year of assessment a person is exempt under section 65c or the Promotion of investments Act 1986 [Act 327], in respect of all income of that person from all sources not being exemption on income equal to capital expenditure incurred.”. amendment of section 39 49. section 39 of the principal Act is amended— (a) in subsection (1), by substituting for the word “six” the word “five”; (b) in paragraph (2)(b), by substituting for the word “six” the word “five”; and (c) in subsection (4), by substituting for the word “six” the word “five”. amendment of section 50 50. subsection 50(2) of the principal Act is amended by substituting for the word “six” the word “five”. Finance 33 new section 57A 51. the principal Act is amended by inserting after section 57 the following section: “Failure to keep records 57A . any person who, without reasonable excuse, contravenes subsection 34a(1), (2), (3), (4) or (5) shall be guilty of an offence and shall, on conviction, be liable to a fine of not less than three hundred ringgit and not more than ten thousand ringgit or to imprisonment for a term not exceeding one year or to both.”. amendment of section 66 52. subsection 66(1) of the principal Act is amended by substituting for the word “six” the word “five”. new section 72A 53. the principal Act is amended by inserting after section 72 the following section: “Power to substitute the price and disallowance of interest on certain transactions 72A . (1) this section shall apply notwithstanding section 72 and subject to any rules prescribed under this Act. (2) subject to subsection (3) where a chargeable person in the basis period for a year of assessment enters into a transaction with another person for that year for the acquisition or supply of property or services, then, for all purposes of this Act, that chargeable 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 34 Laws of Malaysia A ct 755 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, assessable income or chargeable income of the chargeable 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 a chargeable person who is a resident, is excessive in relation to the fixed capital of such chargeable 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 transactions or financial assistance between— (a) companies one of which has control over the other; or (b) companies both of which are controlled by some other person. (6) in this section, “transaction” has the same meaning assigned to it in subsection 72(7).”. amendment of section 83 54. subsection 83(1) of the principal Act is amended by inserting after paragraph (b) the following paragraph: “(ba) implementing and facilitating the operation of section 72a;”. Finance 35 chapter V AmeNDmeNts to the ReAL PRoPeRtY gAiNs tAx Act 1976 commencement of amendments to the real Property Gains tax act 1976 55. (1) section 56 and paragraph 63(c) come into operation on the coming into operation of the Limited Liability Partnerships Act 2012 [Act 743]. (2) sections 57, 58, paragraph 59(c), section 61, paragraphs 63(a) and (b), and section 64 come into operation on the coming into operation of this Act. (3) Paragraphs 59(a) and (b), sections 60 and 62 come into operation on 1 January 2014. amendment of section 2 56. the Real Property gains tax Act 1976, which is referred to as the “principal Act” in this chapter, is amended in subsection 2(1)— (a) in the definition of “person”, by inserting after the words “body of persons” the words “, limited liability partnership”; and (b) by inserting after the definition of “land” the following definition: ‘ “limited liability partnership” means a limited liability partnership registered under the Limited Liability Partnerships Act 2012 [Act 743];’. amendment of section 13 57. section 13 of the principal Act is amended by inserting after subsection (5) the following subsections: “(6) A person who disposes of a chargeable asset and is required to make a return under this section may furnish to the Director general together with the return a notification in the prescribed form that such disposal is not subject to tax or exempt from the payment of tax under this Act. 36 Laws of Malaysia A ct 755 (7) for the purpose of section 21b, the notification referred to in subsection (6) shall be served to the acquirer within sixty days from the date of the disposal.”. amendment of section 14 58. section 14 of the principal Act is amended by inserting after subsection (4) the following subsection: “(5) Where pursuant to section 21b, an acquirer fails to retain and remit the amount required under that section, and the failure is by reason of an incorrect or wrong notification furnished to him under section 13, there shall be included in the assessment made in respect of the person who furnished such notification, a sum equal to ten per cent of the tax payable by that person.”. amendment of section 15 59. section 15 of the principal Act is amended— (a) in subsection (1), by substituting for the word “six” the word “five”; (b) in subsection (3), by substituting for the word “six” the word “five”; and (c) by inserting after subsection (3) the following subsection:

“(4) Where pursuant to section 21b and subject to subsection 14(5), an acquirer fails to retain and remit the amount required under that section, and the failure is by reason of an incorrect or wrong notification furnished to him under section 13, there shall be included in the assessment made in respect of the person who furnished such notification, a sum equal to ten per cent of the tax payable by that person.”. Finance 37 amendment of section 19 60. subsection 19(1) of the principal Act is amended by substituting for the word “six” the word “five”. amendment of section 21b 61. section 21b of the principal Act is amended by inserting after subsection (4) the following subsection: “(5) this section shall not apply if a notice of non-chargeability under section 13 is served to the acquirer within sixty days after the date of the disposal.”. amendment of section 24 62. subsection 24(3) of the principal Act is amended by substituting for the word “six” the word “five”. amendment of schedule 1 63. schedule 1 to the principal Act is amended— (a) by inserting after subparagraph 5(1) the following subparagraph: “(1a) Notwithstanding anything contrary to this Act or any other written law, any person who is a director of a company during the period in which tax or debt is liable to be paid by that company shall be jointly and severally liable for such tax or debt that is due and payable and shall be recoverable under section 23 from that director.”; (b) by inserting after subparagraph 5(3) the following subparagraph: “(4) for the purposes of subparagraph (1a), “director” means any person who— (a) is occupying the position of director (by whatever named called), including any person who is concerned in the management of the company’s business; and 38 Laws of Malaysia A ct 755 (b) is, either on his own or with one or more associates, the owner of, or able directly or through the medium of other companies or by any other indirect means to control, more than fifty per cent of the ordinary share capital of the company. (5) for the purposes of subsubparagraph (4)(b), “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; (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.”; and (c) by inserting after paragraph 5 the following paragraph: “5A. (1) the compliance officer who is appointed amongst the partners of the limited liability partnership or if no compliance officer is appointed as such, by any partners thereof, shall be jointly and severally assessable and chargeable with the tax payable by the limited liability partnership under this Act. (2) subparagraphs 5(2) and (3) shall apply with such modifications and adaptations as may be necessary under this paragraph. (3) in this paragraph, “compliance officer” shall have the same meaning assigned to it by section 27 of the Limited Liability Partnerships Act 2012.”. amendment of schedule 4 64. schedule 4 to the principal Act is amended in paragraph 2— (a) by substituting for the words “which is not or was not part of a larger chargeable asset at the time of the disposal:” the words “or where the chargeable asset is Finance 39 partly disposed, the amount to be allowed in respect of such disposal shall be ascertained in accordance with the following formula: A x c B where A is part of the area of the chargeable asset disposed; B is the total area of the chargeable asset; c is ten thousand or ten percent of the chargeable gain whichever is greater.”; and (b) by deleting the proviso. DICETAK OLEH PERCETAKAN NASIONAL MALAYSIA BERHAD, KUALA LUMPUR BAGI PIHAK DAN DENGAN PERINTAH KERAJAAN MALAYSIA