FINANCE ACT 2009

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 693 FINANCE ACT 2009 As at 1 February 2018 2 FINANCE ACT 2009 Date of Royal Assent … … … … 6 January 2009 Date of publication in the Gazette … … … … 8 January 2009 … See Chap. VII of Act 719 Latest amendment made by Act 719 which came into operation on … … ... 3 LAWS OF MALAYSIA Act 693 FINANCE ACT 2009 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 6A 7. Amendment of section 7 8. Amendment of section 15 9. Amendment of section 15A 10. New section 15B 4 Laws of Malaysia Section 11. Amendment of section 25 12. Amendment of section 32 13. Amendment of section 34 14. Amendment of section 34A 15. Amendment of section 39 16. Amendment of section 44 17. Amendment of section 44A 18. Amendment of section 53 19. New section 53A 20. Amendment of section 54A 21. New section 77B 22. New section 91A 23. Amendment of section 93 24. Amendment of section 96 25. New section 97A 26. Amendment of section 98 27. Amendment of section 103 28. Amendment of section 104 29. Amendment of section 106 30. Amendment of section 107A 31. Amendment of section 107B 32. Amendment of section 107C 33. Amendment of section 109 34. Amendment of section 109B 35. Amendment of section 109D 36. Amendment of section 109E 37. New section 109F 38. Deletion of section 130 39. New section 138C 40. New section 140A ACT 693 Finance Section 41. Amendment of section 154 42. Amendment of Schedule 1 43. Amendment of Schedule 3 44. Amendment of Schedule 5 45. Amendment of Schedule 6 46. Amendment of Schedule 7A PART II SAVINGS AND TRANSITIONAL PROVISIONS 47. Application of this Part 48. Statement to Director General 49. Amount in excess of 108 balance 50. Set-off for tax deducted CHAPTER III AMENDMENTS TO THE STAMP ACT 1949 51. Commencement of amendments to the Stamp Act 1949 52. Amendment of section 2 53. Amendment of section 7 54. New section 11A 55. Amendment of section 12 56. Amendment of section 36 57. Amendment of section 37 58. Amendment of section 40 59. Amendment of section 48 60. New section 50A 61. Amendment of section 57 62. Amendment of section 59A 63. New sections 77A and 77B 5 6 Laws of Malaysia ACT 693 Section 64. Amendment of section 82 65. Amendment of First Schedule CHAPTER IV AMENDMENTS TO THE PETROLEUM (INCOME TAX) ACT 1967 66. Commencement of amendments to the Petroleum (Income Tax) Act 1967 67. Amendment of section 16 68. New section 41A 69. Amendment of Second Schedule 70. Amendment of Third Schedule CHAPTER V AMENDMENT TO THE LABUAN OFFSHORE BUSINESS ACTIVITY TAX ACT 1990 71. Commencement of amendment to the Labuan Offshore Business Activity Tax Act 1990 72. Amendment of section 3A 7 LAWS OF MALAYSIA Act 693 FINANCE ACT 2009 An Act to amend the Income Tax Act 1967, the Stamp Act 1949, the Petroleum (Income Tax) Act 1967 and the Labuan Offshore Business Activity Tax Act 1990. [ ] ENACTED by the Parliament of Malaysia as follows: CHAPTER I PRELIMINARY Short title 1. This Act may be cited as the Finance Act 2009. 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 Labuan Offshore Business Activity Tax Act 1990 [Act 445] are amended in the manner specified in Chapters II, III, IV and V respectively. 8 Laws of Malaysia ACT 693 CHAPTER II PART I AMENDMENTS TO THE INCOME TAX ACT 1967 Commencement of amendments to the Income Tax Act 1967 3. (1) Paragraph 45(a) has effect for the year of assessment 2008 and subsequent years of assessment. (2) Sections 4, 6, 7, 11, 12, 13, 14, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27, 29, 38, paragraphs 42(a) and (b), paragraphs 43(b), (c), (d), (e) and (f), paragraph 45(b), paragraphs 46(a), (c), (d), (f) and (g) and subparagraphs 46(e)(i) and (ii) have effect for the year of assessment 2009 and subsequent years of assessment. (3) Sections 8, 9, 26, 28, 30, 31, 33, 34, 35, 36, paragraph 43(a), section 44, paragraph 46(b) and sections 47, 48, 49 and 50 come into operation on the coming into operation of this Act. (4) Sections 5, 10, 15, 25, 37, 39, 40 and 41 and paragraph 42(d) come into operation on 1 January 2009. (5) Paragraph 42(c) has effect from 1 January 2009 to 31 December 2011. (6) Subparagraph 46(e)(iii) has effect for the year of assessment 2009 and 2010. (7) Section 32 has effect for the year of assessment 2010 and subsequent years of assessment. 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 by inserting after the definition of “aggregate income” the following definition: Finance 9 ‘ “amended return” means an amended return made in accordance with section 77B;’. Amendment of section 6 5. Subsection 6(1) of the principal Act is amended— (a) in paragraph (i), by substituting for the words “only for a period of five years commencing from the year of assessment 2007” the words “, in respect of subparagraphs (a) and (c) of that Part for a period of three years from the year of assessment 2009 and in respect of subparagraph (b) of that Part for a period of five years commencing from the year of assessment 2007”; (b) by substituting for the full stop at the end of paragraph (j) a semicolon; and (c) by inserting after paragraph (j) the following paragraph: “(k) subject to section 109F but notwithstanding any other provisions of this Act, income tax shall be charged for each year of assessment upon the income of a non-resident person charged under paragraph 4(f) at the appropriate rate as specified under Part XIII of Schedule 1.”. Amendment of section 6A 6. Subsection 6A(2) of the principal Act is amended by substituting for the words “three hundred and fifty” wherever they appear the words “four hundred”. 10 Laws of Malaysia ACT 693 Amendment of section 7 7. Section 7 of the principal Act is amended by inserting after subsection (1A) the following subsection: “(1B) Notwithstanding subsection (1), where a person who is a citizen and— (a) is employed in the public services or service of a statutory authority; and (b) is not in Malaysia at any day in the basis year for that particular year of assessment by reason of— (i) having and exercising his employment outside Malaysia; or (ii) attending any course of study in any institution or professional body outside Malaysia which is fully-sponsored by the employer, he is deemed to be a resident for the basis year for that particular year of assessment and for any subsequent basis years when he is not in Malaysia.”. Amendment of section 15 8. Paragraph 15(a) of the principal Act is amended by substituting for the words “or a State Government” the words “, a State Government or a local authority”. Amendment of section 15A 9. Subparagraph 15A(i) of the principal Act is amended by substituting for the words “or a State Government” the words “, a State Government or a local authority”. Finance 11 New section 15B 10. The principal Act is amended by inserting after section 15A the following section: “Derivation of gains or profits in certain cases 15B. Gross income in respect of gains or profits to which paragraph 4(f) applies shall be deemed to be derived from Malaysia— (a) if responsibility for the payment of such gains or profits lies with the Government, a State Government or a local authority; (b) if responsibility for the payment of such gains or profits lies with a person who is a resident for that basis year; or (c) if the payment of such gains or profits is charged as an outgoing or expense in the accounts of a business carried on in Malaysia.”. Amendment of section 25 11. Section 25 of the principal Act is amended— (a) in subsection (1), by inserting after the words “subsection (1A)” the words “or (2A)”; (b) in subsection (2), by substituting for the words “section 3 and subsection (5)” the words “section 3 and subsections (2A) and (5)”; (c) by inserting after subsection (2) the following subsection: “(2A) Where gross income from an employment in relation to director’s fee or bonus is receivable in respect of 12 Laws of Malaysia ACT 693 the whole or part of the relevant period, that gross income shall, when received in any relevant period, be treated as the gross income of the relevant person for the second mentioned relevant period.”; and (d) in subsection (3), by substituting for the words “or (2)” the words “, (2) or (2A)”. Amendment of section 32 12. Section 32 of the principal Act is amended— (a) in subparagraph (1A)(b)(i), by substituting for the words “Bursa Malaysia” the words “any stock exchange”; and (b) by inserting after subsection (3) the following subsection: “(4) For the purposes of this section, the amount of gross income from the employment mentioned in paragraphs (2)(a), (b) and (3)(c) shall not include the amount of gross income in respect of any right to acquire shares in a company ascertained under subsection (1A).”. Amendment of section 34 13. Paragraph 34(6)(h) of the principal Act is amended by inserting after the words “housing,” the words “conservation or preservation of environment, enhancement of income of the poor,”. Amendment of section 34A 14. Section 34A of the principal Act is amended— (a) in subsection (1)— Finance 13 (i) by substituting for the words “research—” the words “research approved by the Minister.”; and (ii) by deleting paragraphs (a) and (b); (b) in subsection (2), by substituting for the words “paragraph (1)(a)” the words “subsection (1)”; and (c) by deleting subsection (3). Amendment of section 39 15. Paragraph 39(1)(j) of the principal Act is amended by inserting after the words “section 109B” the words “or 109F”. Amendment of section 44 16. Section 44 of the principal Act is amended— (a) in subsection (6), by substituting for the proviso the following proviso: “Provided that the amount to be deducted from the aggregate income for the relevant year in respect of any gift of money made to any institution or organization approved for the purposes of this section by the Director General shall not exceed— (a) in the case of a person other than a company, seven per cent of the aggregate income of that person in the relevant year; or (b) in the case of a company, ten per cent of the aggregate income of that company in the relevant year.”; 14 Laws of Malaysia ACT 693 (b) in subsection (11B), by substituting for the proviso the following proviso: “Provided that the amount to be deducted pursuant to this subsection shall not exceed— (a) in the case of a person other than a company, the difference between the amount of seven percent of the aggregate income of that person in the relevant year and the total amount that has been deducted pursuant to the proviso to subsections (6) and (11C) for that relevant year; or (b) in the case of a company, the difference between the amount of ten per cent of the aggregate income of that company in the relevant year and the total amount that has been deducted pursuant to the proviso to subsections (6) and (11C) for that relevant year.”; and (c) in subsection (11C), by substituting for the proviso the following proviso: “Provided that the amount to be deducted pursuant to this subsection shall not exceed— (a) in the case of a person other than a company, the difference between the amount of seven percent of the aggregate income of that person in the relevant year and the total amount that has been deducted pursuant to the proviso to subsections (6) and (11B) for that relevant year; or (b) in the case of a company, the difference between the amount of ten per cent of