FINANCE ACT 1984

Finance LAWS OF MALAYSIA REPRINT Act 309 FINANCE ACT 1984 Incorporating all amendments up to 1 January 2006 PUBLISHED BY THE COMMISSIONER OF LAW REVISION, MALAYSIA UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968 IN COLLABORATION WITH PERCETAKAN NASIONAL MALAYSIA BHD 2006 1 2 FINANCE ACT 1984 Date of Royal Assent ... ... ... … … 24 December 1984 Date of publication in the Gazette … ... 31 December 1984 PREVIOUS REPRINT First Reprint ... ... ... ... ... 2001 3 LAWS OF MALAYSIA Act 309 FINANCE ACT 1984 ARRANGEMENT OF SECTIONS CHAPTER I PRELIMINARY Section 1. Short title and commencement 2. Amendments of Acts and Ordinances CHAPTER II AMENDMENTS TO THE INCOME TAX ACT 1967 3. Commencement of amendments to the Income Tax Act 1967 4. Amendment of section 3A 5. Amendment of section 4A 6. Amendment of section 6A 7. Amendment of section 13 8. Amendment of section 15A 9. Amendment of section 36 10. Amendment of section 39 11. Amendment of section 44 12. Amendment of section 48 13. Amendment of section 54A 14. Amendment of section 109B 15. Amendment of Schedule 1 16. Amendment of Schedule 2 17. Amendment of Schedule 3 4 Laws of Malaysia ACT 309 Section 18. Amendment of Schedule 4 19. Amendment of Schedule 6 CHAPTER III AMENDMENTS TO THE SUPPLEMENTARY INCOME TAX ACT 1967 20. Commencement of amendments to the Supplementary Income Tax Act 1967 21. Amendment of section 13 CHAPTER IV AMENDMENTS TO THE REAL PROPERTY GAINS TAX ACT 1976 22. Commencement of amendments to the Real Property Gains Tax Act 1976. 23. Amendment of Schedule 5 CHAPTER V AMENDMENTS TO THE STAMP ORDINANCE 1949 24. Commencement of amendments to the Stamp Ordinance 1949 25. Amendment of section 2 26. Amendment of section 4 27. Amendment of section 19 28. Amendment of section 20 29. New section 20B 30. Amendment of section 21 31. Amendment of section 29 32. New section 29A 33. Amendment of the First Schedule CHAPTER VI AMENDMENTS TO THE STAMP ORDINANCE (SABAH) 34. Commencement of amendments to the Stamp Ordinance (Sabah) Finance 5 Section 35. Amendment of section 2 36. Amendment of section 4 37. Amendment of section 19 38. Amendment of section 20 39. New section 20B 40. Amendment of section 21 41. Amendment of section 29 42. New section 29A 43. Amendment of the First Schedule CHAPTER VII AMENDMENTS TO THE STAMP ORDINANCE (SARAWAK) 44. Commencement of amendments to the Stamp Ordinance (Sarawak) 45. Amendment of section 2 46. New sections 3C and 3D 47. Amendment of the First Schedule CHAPTER VIII AMENDMENTS TO THE ESTATE DUTY ENACTMENT 1941 48. Commencement of amendments to the Estate Duty Enactment 1941 49. Amendment of section 5 50. Amendment of section 9 51. Amendment of section 13 52. Amendment of section 23 CHAPTER IX AMENDMENTS TO THE ESTATE DUTY ORDINANCE (SABAH) 53. Commencement of amendments to the Estate Duty Ordinance (Sabah) 54. Amendment of section 7 55. Amendment of section 8 56. Amendment of section 17 6 Laws of Malaysia ACT 309 CHAPTER X AMENDMENTS TO THE ESTATE DUTY ORDINANCE (SARAWAK) Section 57. Commencement of amendments to the Estate Duty Ordinance (Sarawak) 58. Amendment of section 2 59. Amendment of section 4 CHAPTER XI AMENDMENTS TO THE FINANCE (ESTATE DUTY) ACT 1980 60. Commencement of amendments to the Finance (Estate Duty) Act 1980 61. Deletion of section 4 62. Amendment of the First Schedule 63. Amendment of the Second Schedule Finance 7 LAWS OF MALAYSIA Act 309 FINANCE ACT 1984 An Act to amend the Income Tax Act 1967, the Supplementary Income Tax Act 1967, the Real Property Gains Tax Act 1976, the Stamp Ordinance 1949, the Stamp Ordinance (Sabah), the Stamp Ordinance (Sarawak), the Estate Duty Enactment 1941, the Estate Duty Ordinance (Sabah), the Estate Duty Ordinance (Sarawak) and the Finance (Estate Duty) Act 1980 and to provide for matters connected therewith. [ ] BE IT ENACTED by the Seri Paduka Baginda Yang di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows: C HAPTER I PRELIMINARY Short title and commencement 1. This Act may be cited as the Finance Act 1984 and shall have effect or be deemed to have effect as provided in this Act. Amendments of Acts and Ordinances 2. The Income Tax Act 1967 [Act 53], the *Supplementary Income Tax Act 1967 [Act 54], the Real Property Gains Tax Act 1976 [Act 169], the **Stamp Ordinance 1949 [Ord. 59 of 1949], the † Stamp Ordinance (Sabah) [Sabah Cap. 137], the †Stamp Ordinance (Sarawak) [Swk. Cap. 32], the ††Estate Duty Enactment 1941 *NOTE—The Supplementary Income Tax Act 1967 [Act 54] has since been repealed by the Finance Act 1993 [Act 497]–see subsection 16(1) of Chapter V of Act 497. **NOTE—The Stamp Ordinance 1949 [Ord.59 of 1949] has since been revised in January 1989 as the Stamp Act 1949 [Act 378]. †NOTE—The Stamp Ordinance (Sabah) [Sabah Cap. 137] and the Stamp Ordinance (Sarawak) [Swk. Cap. 32] has since been repealed by the Stamp (Amendment and Extension) Act 1989 [Act A723]–see the Schedule of Act A723. 8 Laws of Malaysia ACT 309 [F.M.S. 7 of 1941], the †† Estate Duty Ordinance (Sabah) [Sabah Cap. 42], the †† Estate Duty Ordinance (Sarawak) [Swk. Cap. 29] and the ††Finance (Estate Duty) Act 1980 [Act 224], are amended respectively in the manner specified in Chapters II, III, IV, V, VI, VII, VIII, IX, X and XI respectively. CHAPTER II AMENDMENTS TO THE INCOME TAX ACT 1967 Commencement of amendments to the Income Tax Act 1967 3. (1) Except for paragraph 4(b), sections 5, 7, 8, 13, 14, paragraph 15(b), sections 16, 18 and paragraph 19(g), the provisions of this Chapter shall have effect for the year of assessment 1985 and subsequent years of assessment. (2) Sections 16 and 18 shall be deemed to have come into force on 19 October 1984. (3) Sections 5, 8 and 14 shall be deemed to have come into force on 21 October 1983. (4) Paragraph 4(b), section 13, paragraphs 15(b) and 19(g) shall have effect for the year of assessment 1984 and subsequent years of assessment. (5) Section 7 shall be deemed to have come into force for a passage commencing on or after 19 October 1984. Amendment of section 3A 4. Section 3A of the Income Tax Act 1967, which in this Chapter is referred to as “the principal Act”, is amended— (a) by substituting for the words “one hundred thousand ringgit.” in paragraph (b) the words “three hundred thousand ringgit:”; and ††NOTE—The Estate Duty Enactment 1941 [F.M.S. 7 of 41], the Estate Duty Ordinance (Sabah) [Sabah Cap. 42], the Estate Duty Ordinance (Sarawak) [Swk. Cap. 29] and the Finance (Estate Duty) Act 1980 [Act 224] have since been repealed by the Finance Act 1992 [Act 476]–see subsection 46(1) of Act 476. Finance 9 (b) by inserting immediately below that section the following proviso: “Provided that this section shall not apply to income of a person under section 4A.”. Amendment of section 4A 5. Section 4A of the principal Act is amended by inserting immediately after the words “other payments” in paragraph (iii) the words “, not being payments of film rentals,”. Amendment of section 6A 6. Section 6A of the principal Act is amended by substituting for subsection (2) the following new subsection (2): “(2) A rebate shall be granted for a year of assessment in the following amounts: (a) sixty ringgit in the case of an individual who has been allowed a deduction under paragraph 46(a) for that year of assessment where his chargeable income for that year of assessment does not exceed ten thousand ringgit: Provided that a rebate of thirty ringgit shall be granted to a wife who has elected to be assessed separately in her name under subsection 45(4) as long as her chargeable income does not exceed ten thousand ringgit for that year of assessment; (b) thirty ringgit in the case of an individual who has been allowed a deduction under subsection 47(1) or (2) for that year of assessment where his chargeable income for that year of assessment does not exceed ten thousand ringgit.”. Amendment of section 13 7. Subsection 13(1) of the principal Act is amended by substituting for the proviso in subparagraph (b)(ii) the following new proviso: “Provided that— (a) the benefit or amenity enjoyed under this subparagraph is confined to the employee and members of his immediate family; and 10 Laws of Malaysia ACT 309 (b) (i) the tickets are issued by a national carrier of Malaysia; or (ii) where the leave passage is taken by way of an organized or group tour which includes a destination serviced by a national carrier of Malaysia, the furthest destination serviced by a national carrier along that route to and from Malaysia in that tour must be undertaken on a national carrier of Malaysia on tickets issued by such a national carrier.”. Amendment of section 15A 8. Section 15A of the principal Act is amended by inserting immediately after the words “other payments” in paragraph (c) the words “, not being payments of film rentals,”. Amendment of section 36 9. Section 36 of the principal Act is amended by substituting for subsection (1) the following new subsection (1): “(1) Notwithstanding any other provision of this Part, where the Director General is satisfied that there is a need for some treatment in computing— (a) the gross income from a business with respect to— (i) a hire-purchase transaction; (ii) a transaction under which a debt is payable by instalments; (iii) a lease transaction in respect of moveable property; or (iv) any other transaction involving a debt or stock in trade; and (b) the adjusted income from the business, Finance 11 he may give directions and formulate regulations to be published in the Gazette for special treatment with respect to any such transaction, either in relation to a particular business or in relation to any business having any such transaction: Provided that no such directions and regulations shall have effect in relation to a business for any year of assessment with respect to which an assessment wholly or partly relating to income from that business has become final and conclusive or is the subject of an appeal which has been sent forward to the Special Commissioners.”. Amendment of section 39 10. Subsection 39(1) of the principal Act is amended— (a) by deleting the word “or” at the end of paragraph (i); (b) by substituting for the full stop at the end of paragraph (j) a semicolon and the word “or”; and (c) by inserting immediately after paragraph (j) the following new paragraph (k): “(k) any sum paid by way of rentals in respect of a motor vehicle, (other than a lorry, truck, bus, mini bus, van, station wagon or taxi cab licensed or permitted, by the appropriate authority, for commercial transportation of goods or passengers) in excess of twenty-five thousand ringgit: Provided that the maximum amount of deduction of rentals in respect of such motor vehicle in the year of assessment and subsequent years of assessment shall not in the aggregate exceed twentyfive thousand ringgit in respect of the said motor vehicle.”. Amendment of section 44 11. Subsection 44(6) of the principal Act is amended by inserting immediately after the words “a State Government” the words “a local authority”. 12 Laws of Malaysia ACT 309 Amendment of section 48 12. Section 48 of the principal Act is amended by substituting for paragraph (2)(a) the following new paragraph (a): “(a) in respect of children falling under paragraphs (1)(a) to (c)— (i) for the first child in order of age, six hundred and fifty ringgit; (ii) for the second child in order of age, seven hundred and fifty ringgit; and (iii) for the third, fourth and fifth child in order of age, eight hundred ringgit for each child;”. Amendment of section 54A 13. Section 54A of the principal Act is amended— (a) by substituting for subsection (1) the following new subsection (1): “(1) S