INCOME TAX ACT 1967

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 53 INCOME TAX ACT 1967 As at 21 May 2024 This text is ONLY AN UPDATED TEXT of the 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 INCOME TAX ACT 1967 First enacted … … … … 1967 (Act No. 47 of 1967) Revised … … … … 1971 (Act 53 w .e. f. 21 October 1971) Latest amendment made by Act A1706 which came into operation on … … … … See section Act A1706 PREVIOUS REPRINTS First Reprint … … … … 1980 Second Reprint … … … … 1993 Third Reprint … … … … 2002 Fourth Reprint … … … … 2006 1 of 3 LAWS OF MALAYSIA Act 53 INCOME TAX ACT 1967 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title and commencement 2. Interpretation PART II IMPOSITION AND GENERAL CHARACTERISTICS OF THE TAX 3. Charge of income tax 3A. (Deleted) 3B. Non-chargeability to tax in respect of offshore business activity 3C. (Deleted) 4. Classes of income on which tax is chargeable 4A. Special classes of income on which tax is chargeable 4B. Non-business income 4C. Gains or profits from a business arising from stock in trade parted with by any element of compulsion 5. Manner in which chargeable income is to be ascertained 6. Rates of tax 6A. Tax rebate 6B. (Deleted) 6C. (Deleted) 4 Laws of Malaysia ACT 53 Section 6D. Tax rebate for company or limited liability partnership 7. Residence: individuals 8. Residence: companies and bodies of persons 9. (Deleted) 10. (Deleted) 11. (Deleted) 12. Derivation of business income in certain cases 13. General provisions as to employment income 13A. (Deleted) 14. General provisions as to dividend income 15. Derivation of interest and royalty income in certain cases 15A. Derivation of special classes of income in certain cases 15B. Derivation of gains or profits in certain cases 15C. Derivation of gains or profits from the disposal of capital assets deriving value from real property in Malaysia 16. Voluntary pensions, etc. 17. Derivation of pensions, etc. PART III ASCERTAINMENT OF CHARGEABLE INCOME Chapter 1—Preliminary 18. Interpretation of Part III 19. Supplementary provisions for the interpretation of Part III Chapter 2—Basis years and basis periods 20. Basis years 21. Basis period of a person other than a company, limited liability partnership, trust body or co-operative society 21A. Basis period of a company, limited liability partnership, trust body or co-operative society Income Tax 5 Chapter 3—Gross income Section 22. Gross income generally 23. Interpretation of sections 24 to 28 24. Basis period to which gross income from a business is related 25. Basis period to which gross income from an employment is related 26. Basis period to which gross income in respect of dividend is related 27. Basis period to which gross income in respect of interest, etc., is related 28. Basis period to which gross income not provided for by sections 24 to 27 is related 29. Basis period to which income obtainable on demand is related 30. Special provisions applicable to gross income from a business 31. (Deleted) 32. Special provisions applicable to gross income from an employment Chapter 4—Adjusted income and adjusted loss 33. Adjusted income generally 34. Special provisions applicable to adjusted income from a business 34A. Special deduction for research and development expenditure 34B. Special deduction for contribution to an approved research institute or payment for use of services of an approved research institute or company 34C. Special provision applicable to adjusted income from a discount or premium 34D. Special deduction for expenditure on treasury shares 35. Stock in trade 36. Power to direct special treatment in the computation of business income in certain cases 37. (Deleted) 38. Special provisions applicable to adjusted income from an employment 38A. Limitation on deduction of entertainment expenses 39. Deductions not allowed 40. Adjusted loss 41. Ascertainment of adjusted income or adjusted loss from a business for an accounting period 6 Laws of Malaysia ACT 53 Chapter 5—Statutory income Section 42. Statutory income Chapter 6—Aggregate income and total income 43. Aggregate income 44. Total income 44A. Group relief for companies 44B. Carry-back losses Chapter 7—Chargeable income 45. Chargeable income and aggregation of husband’s and wife’s income 45A. Deduction for husband 46. Deduction for individual and Hindu joint family 46A. (Deleted) 46B. Deduction for individual on interest expended 47. Deduction for wife or former wife 48. Deduction for children 49. Deduction for insurance premiums 50. Application of section 49 where husband and wife are living together 51. Deduction must be claimed Chapter 8—Special cases 52. Modification of Part III in certain special cases 53. Trade associations 53A. Club, association or similar institution 54. Sea and air transport undertakings 54A. Exemption of shipping profits 54B. (Deleted) 55. Partnerships generally 56. Successive partnerships 57. Provisions applicable where partnership is a partner in another partnership Income Tax 7 Section 58. Income receivable by partnership otherwise than from partnership business 59. Partnership losses 60. Insurance business 60A. Reinsurance: chargeable income, reduced rate and exempt dividend 60AA. Takaful business 60AB. Chargeable income of life fund subject to tax 60B. (Deleted) 60C. Banking business 60D. (Deleted) 60E. (Deleted) 60F. Investment holding company 60FA. Investment holding company listed on Bursa Malaysia 60G. Foreign fund management company 60H. Closed-end fund company 60I. Company that establishes special purpose vehicle 61. Trusts generally 61A. Exemption of Real Estate Investment Trust of Property Trust Fund 62. Discretionary trusts 63. Trust annuities 63A. Special deduction for qualifying capital expenditure 63B. Special deduction for expenses 63C. Special treatment on rent from the letting of real property of a Real Estate Investment Trust or Property Trust Fund 63D. Income of a unit trust from the letting of real property is not income from a business 64. Estates under administration 65. Settlements 65A. Co-operative Societies 65B. Incentive scheme Chapter 9—Gains or profits from the disposal of capital asset 65C. Interpretation of Chapter 9 8 Laws of Malaysia ACT 53 Section 65D. Application of Chapter 9 65E. Gains or profits from the disposal of capital asset 65F. Disposal and acquisition of capital asset PART IV PERSONS CHARGEABLE 66. Personal chargeability: general principle 66A. Tax identification number 67. Vicarious responsibility and chargeability 68. Power to appoint agent 69. Incapacitated persons 70. Non-residents 71. Masters of ships and captains of aircraft 72. Hindu joint families 73. Trustees 74. Executors 75. Companies and bodies of persons 75A. Director’s liability 75B. Limited liability partnership and business trust 76. Rulers and Ruling Chiefs PART V RETURNS 77. Return of income by a person other than a company, limited liability partnership, trust body or co-operative society 77A. Return of income by every company, limited liability partnership, trust body or co-operative society 77B. Amendment of return 77C. Deduction of tax as final tax 78. Power to call for specific returns and production of books 79. Power to call for statement of bank accounts, etc. Income Tax 9 Section 80. Power of access to buildings and documents, etc. 81. Power to call for information 82. Duty to keep records and give receipts 82A. Duty to keep documents for ascertaining chargeable income and tax payable 82B. Duty to provide information and furnish documents for ascertaining chargeable income and tax payable 82C. Duty to issue electronic invoice 83. Return by employer 83A. Duty to furnish particulars of payment made to an agent, etc. 84. Return concerning persons other than the maker of the return 85. Return by occupiers 86. Return by partnership 87. Power to call for further return 88. Returns deemed to be made with due authority 89. Change of address PART VI ASSESSMENTS AND APPEALS Chapter 1—Assessments 90. Assessments generally 91. Assessments and additional assessments in certain cases 91A. Deemed assessment on the amended return 92. Advance assessments 93. Form and making of assessments 94. Record of assessments 95. Discharge of double assessments 96. Notice of assessment 96A. Composite assessment 97. Finality of assessment 97A. Notification of non-chargeability 10 Laws of Malaysia ACT 53 Chapter 2—Appeals Section 98. The Special Commissioners and the Secretary 99. Right of appeal 100. Extension of time for appeal 101. Review by Director General 102. Disposal of appeals PART VII COLLECTION AND RECOVERY OF TAX 103. Payment of tax 103A. (Deleted) 103B. Tax payable notwithstanding institution of proceedings under any other written law 104. Recovery from persons leaving Malaysia 105. Refusal of customs clearance in certain cases 106. Recovery by suit 106A. Power to call for bank account information for purpose of making garnishee order application 107. Deduction of tax from emoluments and pensions 107A. Deduction of tax from contract payment 107B. Payment by instalments 107C. Estimate of tax payable and payment by instalments for companies 107D. Deduction of tax from payment made to agent, etc. 108. Non-deduction of tax from dividend 109. Deduction of tax from interest or royalty in certain cases 109A. Application of sections 109 and 110 to income derived by a public entertainer 109B. Deduction of tax from special classes of income in certain cases derived from Malaysia 109C. Deduction of tax from interest paid to a resident 109D. Deduction of tax on the distribution of income of a unit trust 109DA. Deduction of tax on distribution of income of unit trust to unit holder other than individual Income Tax 11 Section 109E. Deduction of tax on the distribution of income of a family fund, etc. 109F. Deduction of tax from gains or profits in certain cases derived from Malaysia 109G. Deduction of tax from income derived from withdrawal of a deferred annuity or a private retirement scheme 109H. Appeal by the payer 110. Set-off for tax deducted 110A. (Deleted) 110B. Set-off for tax charged on actuarial surplus 110C. Set-off for tax charged on actuarial surplus under takaful business 111. Refund of over-payments 111A. (Deleted) PART VIIA FUND FOR TAX REFUND 111B. Establishment of Fund for Tax Refund 111C. Non applicability of section 14A of the Financial Procedure Act 1957 111D. Compensation for over-payment of tax PART VIII OFFENCES AND PENALTIES 112. Failure to furnish return or give notice of chargeability 112A. Failure to furnish country-by-country report 113. Incorrect returns 113A. Incorrect returns, information returns or reports 113B. Failure to furnish contemporaneous transfer pricing documentation 114. Wilful evasion 115. Leaving Malaysia without payment of tax 116. Obstruction of officers 117. Breach of confidence 118. Offences by officials 119. Unauthorized collection 12 Laws of Malaysia ACT 53 Section 119A. Failure to keep records 119B. Failure to comply with rules made under paragraph 154(1)(c) on mutual administrative assistance 120. Other offences 121. Additional provisions as to offences under sections 113, 115, 116, 118 and 120 122. Tax, etc., payable notwithstanding institution of proceedings 123. (Deleted) 124. Power to compound offences and abate or remit penalties 125. Recovery of penalties imposed under Part VIII 126. Jurisdiction of subordinate court PART IX EXEMPTIONS, REMISSION AND OTHER RELIEF 127. Exemptions from tax: general 127A. Cessation of exemption 128. (Deleted) 129. Remission of tax 129A. Other relief 130. (Dele