PETROLEUM (INCOME TAX) ACT 1967

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 543 PETROLEUM (INCOME TAX) ACT 1967 As at 1 January 2026 This text is ONLY AN UPDATED TEXT of the Petroleum (Income Tax) Act 1967 by the Attorney General’s Chambers. Unless and until reprinted pursuant to the powers of the Commissioner of Law Revision under subsection 14(1) of the Revision of Laws Act 1968 [Act 1], this text is NOT AN AUTHENTIC TEXT. 2 PETROLEUM (INCOME TAX) ACT 1967 First enacted … … ... 1967 (Act No. 45 of 1967) Revised … … ... 1995 (Act 543 w.e.f. 11 January 1996) Latest amendment made by Act 875 which came into operation on … … ... See Section 41 of Act 875 PREVIOUS REPRINTS First Reprint …………… 2002 Second Reprint …………… 2006 3 LAWS OF MALAYSIA Act 543 PETROLEUM (INCOME TAX) ACT 1967 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title, extent and commencement 2. Interpretation PART II IMPOSITION OF THE TAX 3. Charge of petroleum income tax 4. Manner in which chargeable income is to be ascertained PART III ASCERTAINMENT OF CHARGEABLE INCOME Chapter 1—Basis periods 5. Basis periods Chapter 2—Gross income 6. Ascertainment of gross income 7. Natural gas and casinghead petroleum spirit sold, and crude oil sold and refined in Malaysia 8. Crude oil sold and exported 4 Laws of Malaysia ACT 543 Section 9. Crude oil exported otherwise than on sale 10. Chargeable petroleum delivered to refinery or gas processing plant 11. (Repealed) 12. Casinghead petroleum spirit injected into crude oil 13. Miscellaneous receipts 13A. Receipts from disposal of assets vesting in Petroliam Nasional Berhad or the Malaysia-Thailand Joint Authority 14. Sums recovered on account of debts, and debts released Chapter 3—Adjusted income and adjusted loss 15. Deduction in respect of outgoings and expenses 16. Deduction in respect of irrecoverable debt, contribution to approved scheme, intangible drilling expenses, certain capital expenditure and royalty 17. Stock in trade 18. Deductions not allowed 19. Adjusted loss Chapter 4—Statutory income and assessable income 20. Statutory income 21. Assessable income Chapter 5—Chargeable income 22. Chargeable income Chapter 6—Special treatment 22A. Power to direct special treatment in the computation of income from petroleum operations in certain cases PART IV ASCERTAINMENT OF CHARGEABLE TAX 23. Chargeable tax Petroleum (Income Tax) 5 Section 24. (Repealed) 25. (Repealed) 26. (Repealed) PART V PERSONS CHARGEABLE 27. Chargeability of tax on chargeable person and persons responsible on his behalf 28. Power to appoint agent 29. Vicarious responsibility and chargeability PART VI RETURNS 30. Return of income 30A. Return on expenditure during exploration period 30B. Amendment of return 30C. Amendment of return on expenditure during exploration period 31. Power to call for specific returns and production of books 32. Power to call for the statement of bank accounts, etc. 33. Power of access to buildings and documents, etc. 34. Power to call for information 34A. Duty to keep records 34B. Duty to issue electronic invoice 35. Power to call for further returns 36. Returns deemed to be made with due authority 37. Change of address 6 Laws of Malaysia ACT 543 PART VII ASSESSMENTS AND APPEALS Chapter 1—Assessments Section 38. Assessments generally 39. Assessments and additional assessments in certain cases 39A. Deemed assessment on the amended return 40. Form and making of assessments, and notice of assessment 40A. Composite assessment 41. Finality of assessment 41A. Notification of non-chargeability Chapter 2—Appeals 42. The Special Commissioners and the Secretary 43. Right of appeal 44. Extension of time for appeal 45. Review by Director General 46. Disposal of appeals 47. Reference to the Price Review Committee PART VIII COLLECTION AND RECOVERY OF TAX 48. Payment of tax 48A. Tax payable notwithstanding institution of proceedings under any other written law 49. Recovery by suit 49A. Estimate of tax payable and payment by instalments 50. Refund of overpayments 50A. Fund for Tax Refund Petroleum (Income Tax) PART IX OFFENCES AND PENALTIES Section 51. Failure to furnish return 52. Incorrect returns 53. Wilful evasion 54. Obstruction of officers 55. Breach of confidence 56. Offences by officials 57. Unauthorized collection 57A. Failure to keep records 57B. Failure to issue electronic invoice 58. Other offences 59. Additional provisions as to certain offences 60. Tax payable notwithstanding institution of proceedings 61. (Deleted) 62. Power to compound offences 63. Power to abate or remit penalties 64. Recovery of penalties imposed under Part IX 64A. Jurisdiction of subordinate court PART X REMISSION AND OTHER RELIEF 65. Remission of tax 65A. Double taxation arrangements 65AA. International obligations 65B. Exemption to give effect to agreements in overlapping areas 65C. Exemption from tax: general 66. Relief in respect of error or mistake 66A. Relief other than in respect of error or mistake 7 8 Laws of Malaysia ACT 543 PART XI SUPPLEMENTAL Chapter 1—Administration Section 67. The Director General 67A. Power to issue guidelines 68. Power of Minister to give directions to Director General 69. Delegation of Director General’s functions 70. Identification of officials 71. Certain material to be treated as confidential Chapter 1A—Ruling 71A. Advance Pricing Arrangement 71B. Public ruling Chapter 2—Powers to protect the revenue in case of certain transactions 72. Power to disregard certain transactions 72A. Power to substitute the price and disallowance of interest on certain transactions Chapter 3—Miscellaneous 73. Evidential provisions 74. Errors and defects in assessments, notices and other documents 75. Power to direct where returns, etc., are to be sent 76. Service of notices 77. Authentication of notices and other documents 78. Free postage 79. Provisions as to approvals and directions given by Minister or Director General 80. Annulment of rules and orders laid before House of Representatives 81. Procedure for making refunds and repayments Petroleum (Income Tax) Section 82. Forms 82A. Electronic medium 83. Power to make rules 84. Any other law not applicable FIRST SCHEDULE SECOND SCHEDULE THIRD SCHEDULE 9 11 LAWS OF MALAYSIA Act 543 PETROLEUM (INCOME TAX) ACT 1967 An Act to impose a tax upon income from the winning of petroleum in Malaysia, to provide for the assessment and collection thereof and for purposes connected therewith. [28 September 1967] 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: PART I PRELIMINARY Short title, extent and commencement 1. (1) This Act may be cited as the Petroleum (Income Tax) Act 1967. (2) This Act shall extend throughout Malaysia. (3) This Act shall have effect for the year of assessment 1968 and subsequent years of assessment. Interpretation 2. (1) In this Act, unless the context otherwise requires— 12 Laws of Malaysia ACT 543 “adjusted income” means adjusted income ascertained in accordance with this Act; “adjusted loss” means adjusted loss ascertained in accordance with this Act; “approved scheme” means the Employees Provident Fund or any pension or provident fund, scheme or society approved by the Director General under any written law relating to income tax; “assessable income” means assessable income ascertained in accordance with this Act; “assessment” means any assessment or additional assessment made under this Act; “authorized officer” means, within the scope of his authority— (a) an officer authorized by subsection 69(1) or (2) to exercise any function of the Director General; or (b) an officer authorized under subsection 69(5) to exercise or assist in exercising any such function; “barrel” means 42 U.S. gallons or 9702 cubic inches, being equivalent to 34.9726 Imperial gallons; “basis period”, in relation to a chargeable person and a year of assessment, means such basis period, if any, as is ascertained in accordance with section 5; “building” includes any structure erected on land (not being plant or machinery); “cash payment” means such payment as may be made by Petroliam Nasional Berhad under section 4 of the Petroleum Development Act 1974 [Act 144]; “casinghead petroleum spirit” means any liquid hydrocarbons obtained in Malaysia from natural gas by separation or by any chemical Petroleum (Income Tax) 13 or physical process but before the same has been refined or otherwise treated; “chargeable income” means chargeable income ascertained in accordance with this Act; “chargeable person” means— (i) Petroliam Nasional Berhad, (ii) Malaysia-Thailand Joint Authority, (iii) in relation to each petroleum agreement, any other person carrying on petroleum operations thereunder, severally; “chargeable petroleum”, in relation to a chargeable person, means petroleum won or obtained by that chargeable person from his petroleum operations; “chargeable tax” means chargeable tax ascertained in accordance with and imposed by this Act; “company” means a body corporate and includes any body of persons established with a separate legal identity by or under the laws of a place outside Malaysia; “crude oil” means any oil won in Malaysia including oil extracted by destructive distillation from bituminous shales or other stratified deposits either in its natural state or after the extraction of water, sand or other foreign substance therefrom but before any such oil has been refined or otherwise treated; “Director General” means the Director General of Inland Revenue referred to in section 67; “disposal” and “disposed of”, in relation to petroleum owned by a chargeable person, mean respectively— 14 Laws of Malaysia ACT 543 (a) delivery, without sale, of that petroleum to a refinery for refining by or on behalf of that chargeable person, and (b) delivered, without sale, to a refinery for refining by or on behalf of that chargeable person; “electronic invoice” has the meaning assigned to it in the Income Tax Act 1967 [Act 53]; “entertainment” includes— (a) the provision of food, drink, recreation or hospitality of any kind; or (b) the provision of accommodation or travel in connection with or for the purpose of facilitating entertainment of the kind mentioned in paragraph (a), by a chargeable person or an employee of his, with or without any consideration paid whether in cash or in kind, in promoting or in connection with petroleum operations carried on by that chargeable person; “Inland Revenue Board of Malaysia” means the Inland Revenue Board of Malaysia established under the Inland Revenue Board of Malaysia Act 1995 [Act 533]; “input tax” has the meaning assigned to it in the *Goods and Services Tax Act 2014 [Act 762]; “Joint Development Area” has the meaning assigned thereto by the Malaysia-Thailand Joint Authority Act 1990 [Act 440]; “Malaysia” means the territories of the Federation of Malaysia, the territorial waters of Malaysia and the sea-bed and subsoil of the territorial waters and the airspace above such areas, and includes any area extending beyond the limits of the territorial waters of Malaysia, *NOTE—The Goods and Services Tax Act 2014 [Act 762] has since been repealed by the Goods and Services Tax (Repeal) Act 2018 [Act 805] which comes into operation on 1 September 2018–see section 3 of Act 805. Petroleum (Income Tax) 15 and the sea-bed and subsoil of any such area, which has been or may hereafter be designated under the laws of Malaysia as an area over which Malaysia has sovereign rights or jurisdiction for the purposes of exploring and exploiting the natural resources, whether living or non-living; “market value”