FINANCE ACT 2015

Finance LAWS OF MALAYSIA Act 773 FINANCE ACT 2015 1 2 Date of Royal Assent Laws of Malaysia Act 773 ... ... 29 December 2015 Date of publication in the Gazette ... ... ... 30 December 2015 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 LAWS OF MALAYSIA Act 773 FINANCE ACT 2015 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. Amendment of section 6 6. Amendment of section 24 7. Amendment of section 25 8. Amendment of section 33 9. Amendment of section 34 10. Amendment of section 39 11. Amendment of section 45a 12. Amendment of section 46 13. Amendment of section 47 14. Amendment of section 48 15. Amendment of section 60i 16. Amendment of section 83 17. Amendment of section 91 18. Amendment of section 107c 3 4 Laws of Malaysia Act 773 Section 19. Amendment of section 112 20. Amendment of section 120 21. Amendment of section 125 22. Amendment of section 152a 23. Amendment of section 154 24. Amendment of Schedule 1 25. Amendment of Schedule 3 26. Amendment of Schedule 6 27. Amendment of Schedule 7 28. Amendment of Schedule 7a 29. Amendment of Schedule 7b part II SAVING AND TRANSITIONAL PROVISIONS 30. Application of this Part 31. 108 balance 32. Amount in excess of 108 balance Chapter III AMENDMENTS TO THE PETROLEUM (INCOME TAX) ACT 1967 33. Commencement of amendments to the Petroleum (Income Tax) Act 1967 34. Amendment of section 2 35. Amendment of section 18 36. Amendment of section 39 37. Amendment of First Schedule 38. Amendment of Second Schedule Chapter IV AMENDMENTS TO THE REAL PROPERTY GAINS TAX ACT 1976 39. Commencement of amendments to the Real Property Gains Tax Act 1976 40. Amendment of section 2 Finance 5 Section 41. Amendment of section 29 42. Amendment of Schedule 2 43. Amendment of Schedule 4 Chapter V AMENDMENTS TO THE LABUAN BUSINESS ACTIVITY TAX ACT 1990 44. Commencement of amendments to the Labuan Business Activity Tax Act 1990 45. Amendment of section 22 46. Amendment of section 22a Chapter VI AMENDMENTS TO THE GOODS AND SERVICES TAX ACT 2014 47. Commencement of amendments to the Goods and Services Tax Act 2014 48. Amendment of section 13 49. Amendment of section 41 50. Amendment of section 43 51. Amendment of section 51 52. Amendment of section 69 53. Amendment of section 70 54. Amendment of section 86 55. Amendment of section 94 56. Amendment of section 122 Chapter VII AMENDMENTS TO THE PROMOTION OF INVESTMENTS ACT 1986 57. Commencement of amendments to the Promotion of Investments Act 1986 58. Amendment of section 2 59. New sections 29q and 29r 6 Laws of Malaysia Act 773 7 Finance LAWS OF MALAYSIA Act 773 FINANCE ACT 2015 An Act to amend the Income Tax Act 1967, the Petroleum (Income Tax) Act 1967, the Real Property Gains Tax Act 1976, the Labuan Business Activity Tax Act 1990, the Goods and Services Tax Act 2014 and the Promotion of Investments Act 1986. [ ] ENACTED by the Parliament of Malaysia as follows: Chapter I PRELIMINARY Short title 1. This Act may be cited as the Finance Act 2015. Amendment of Acts 2. The Income Tax Act 1967 [Act 53], the Petroleum (Income Tax) Act 1967 [Act 543], the Real Property Gains Tax Act 1976 [Act 169], the Labuan Business Activity Tax Act 1990 [Act 445], the Goods and Services Tax Act 2014 [Act 762] and the Promotion of Investments Act 1986 [Act 327] are amended in the manner specified in Chapters II, III, IV, V, VI and VII respectively. 8 Laws of Malaysia Act 773 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 (ii), paragraphs 10(a), (b) and (c) in respect of paragraphs 39(1)(o) and (p) of the Income Tax Act 1967, section 17, paragraphs 25(a) and (e), paragraph 28(a) and section 29 have effect for the year of assessment 2015 and subsequent years of assessment. (2) Sections 5, 6, 7, 8, 9 and 11, paragraphs 12(a), (b), (c) and (d) in respect of paragraph 46(1)(n) of the Income Tax Act 1967, sections 13, 14, 22 and 24, paragraphs 25(b), (c) and (d), paragraph 26(a), section 27 and paragraph 28(c) have effect for the year of assessment 2016 and subsequent years of assessment. (3) Subparagraph 4(a)(iii), paragraph 4(b), sections 15, 19, 20, 21 and 23, and paragraphs 26(b), (c) and (d), and Part II come into operation on the coming into operation of this Act. (4) Paragraph 28(b) has effect for the year of assessment 2016, 2017 and 2018. (5) Paragraph 10(c) in respect of paragraph 39(1)(q) of the Income Tax Act 1967, comes into operation on 1 January 2016. (6) Paragraph 12(d) in respect of paragraph 46(1)(o) of the Income Tax Act 1967, has effect for the year of assessment 2016 until the year of assessment 2020. (7) Section 16 has effect for the year ending 31 December 2016 and subsequent years. (8) Section 18 has effect for the year of assessment 2018 and subsequent years of assessment. Finance 9 Amendment of section 2 4. Section 2 of the Income Tax Act 1967, which is referred to as the “principal Act” in this Chapter, is amended— (a) in subsection (1)— (i) by inserting after the definition of “Inland Revenue Board of Malaysia” the following definition: ‘ “input tax” has the same meaning assigned to it in the Goods and Services Tax Act 2014 [Act 762];’; (ii) by inserting after the definition of “Minister” the following definition: ‘ “output tax” has the same meaning assigned to it in the Goods and Services Tax Act 2014;’; and (iii) by inserting after the definition of “stock in trade” the following definition: ‘ “sukuk” has the same meaning assigned to it in the Capital Markets and Services Act 2007;’; and (b) in subsection (8)— (i) by deleting the words “the Securities Commission,”; and (ii) by inserting after the words “Malaysia Co-operative Societies Commission” the words “, or approved or authorized by, or lodged with, the Securities Commission”. Amendment of section 6 5. Paragraph 6(1)(i) of the principal Act is amended by substituting for the words “five years from the year of assessment 2012 and in respect of subparagraph (b) of that Part for a period of five years commencing from the year of assessment 2007” the words “four years from the year of assessment 2016 and in respect of subparagraph (b) of that Part for the year of assessment 2016 and subsequent years of assessment”. 10 Laws of Malaysia Act 773 Amendment of section 24 6. Section 24 of the principal Act is amended— (a) in paragraph (1)— (i) in paragraph (b), by inserting after the word “rendered” the words “or to be rendered”; and (ii) in paragraph (c), by inserting after the word “dealt” the words “or to be dealt”; and (b) by inserting after subsection (1) the following subsection: “(1a) Except where subsection (1) applies, where in the relevant period, any sum is received by a relevant person in the course of carrying on a business in respect of any services to be rendered or the use or enjoyment of any property to be dealt with in the relevant period or in any following basis period, the sum shall be treated as the gross income of the relevant person from the business for the relevant period the sum is received notwithstanding that no debt is owing to the relevant person in respect of such services or such use or enjoyment.”. Amendment of section 25 7. Section 25 of the principal Act is amended— (a) by substituting for subsection (1) the following subsection: “(1) Subject to this section, where gross income from an employment is receivable in respect of any particular period, it shall, when received in the relevant period, be treated as the gross income of the relevant person for the relevant period.”; (b) by deleting subsections (2), (2a), (3), (4) and (5); and (c) in subsection (6), by substituting for the words “for the basis period for the year of assessment following the relevant year shall be treated as receivable” the words “for the basis period for the relevant year or for the basis period for the year of assessment following the relevant year, shall be treated as deemed to have been received”. Finance 11 Amendment of section 33 8. Section 33 of the principal Act is amended by inserting after subsection (4) the following subsection: “(5) For the purpose of subsection (4), where any sum payable for a basis period for a year of assessment is due to be paid in any following year of assessment— (a) a person shall notify the Director General in writing of the deduction in respect of the sum not later than twelve months from the end of the basis period for the year of assessment when the sum is due to be paid; and (b) upon receipt of the notice, the Director General may reduce the assessment that has been made in respect of such sum.”. Amendment of section 34 9. Section 34 of the principal Act is amended by inserting after subsection (7) the following subsection: “(7a) Where in the basis period for a year of assessment an amount in respect of any sum received by the relevant person which is treated as part of the gross income of the relevant person in accordance with subsection 24(1a) is refunded, such amount shall be deducted from the relevant gross income of the relevant person for the basis period for that year of assessment.”. 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 (m); (b) by substituting for the full stop at the end of paragraph (n) a semicolon; and 12 Laws of Malaysia Act 773 (c) by inserting after paragraph (n) the following paragraphs: “(o) any amount paid or to be paid in respect of goods and services tax as input tax by the person if he is liable to be registered under the Goods and Services Tax Act 2014 and has failed to do so, or if he is entitled under that Act to credit that amount as input tax; (p) any amount of output tax paid or to be paid under the Goods and Services Tax Act 2014 which is borne by the person if he is registered or liable to be registered under that Act; or (q) any remuneration or other income in respect of services performed or rendered in Malaysia by a public entertainer from which tax is deductible under section 109a, if tax has not been deducted therefrom and paid to the Director General in accordance with that section: Provided that— (i) this paragraph shall not apply if the payer has paid the amount of tax and the increased sum due from him to the Government in accordance with subsection 109(2); and (ii) where such amount of tax and the increased sum are paid after the due date for the furnishing of a return for a year of assessment that relates to such tax and the increased sum, the amount of tax and the increased sum so paid shall not prejudice the imposition of penalty under subsection 113(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.”. Finance 13 Amendment of section 45a 11. Section 45a of the principal Act is amended by substituting for the words “three thousand ringgit” the words “four thousand ringgit”. Amendment of section 46 12. Subsection 46(1) of the principal Act is amended— (a) in paragraph (f), by substituting for the word “five” the word “seven”; (b) by deleting the word “and” at the end of paragraph (l); (c) by substituting for the full stop at the end of paragraph (m) a semicolon; an