FINANCE ACT 2019

Finance LAWS OF MALAYSIA Act 823 FINANCE ACT 2019 1 2 Laws of Malaysia Act 823 Date of Royal Assent ... ... 30 December 2019 Date of publication in the Gazette ... ... 31 December 2019 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 823 FINANCE ACT 2019 ARRANGEMENT OF SECTIONS Chapter I PRELIMINARY Section 1. 2. Short title Amendment of Acts Chapter II AMENDMENTS TO THE INCOME TAX ACT 1967 3. Commencement of amendments to the Income Tax Act 1967 5. Amendment of section 6 4. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. Amendment of section 2 Amendment of section 6a Amendment of section 34 Amendment of section 44 Amendment of section 46 Amendment of section 74 Amendment of section 77b Amendment of section 91 Amendment of section 96 Amendment of section 100 Amendment of section 103 Amendment of section 104 Amendment of section 106 Amendment of section 109g Amendment of Schedule 1 Amendment of Schedule 3 Amendment of Schedule 6 3 4 Laws of Malaysia Act 823 Chapter III AMENDMENTS TO THE REAL PROPERTY GAINS TAX ACT 1976 Section 22. Commencement of amendments to the Real Property Gains Tax Act 1976 24. Amendment of Schedule 2 23. 25. 26. Amendment of section 21b Amendment of Schedule 3 Amendment of Schedule 5 Chapter IV AMENDMENT TO THE STAMP ACT 1949 27. 28. Commencement of amendment to the Stamp Act 1949 Amendment of First Schedule Chapter V AMENDMENTS TO THE PETROLEUM (INCOME TAX) ACT 1967 29. Commencement of amendments to the Petroleum (Income Tax) Act 1967 31. Amendment of section 44 30. 32. 33. 34. Amendment of section 39 Amendment of section 65a New section 65aa Amendment of section 83 Chapter VI AMENDMENT TO THE SALES TAX ACT 2018 35. 36. Commencement of amendment to the Sales Tax Act 2018 New Part IXa Chapter VII AMENDMENTS TO THE FINANCE ACT 2010 37. 38. Commencement of amendments to the Finance Act 2010 Amendments to the Finance Act 2010 Finance Chapter VIII AMENDMENT TO THE FINANCE ACT 2018 Section 39. 40. Commencement of amendment to the Finance Act 2018 Amendment of section 71 5 6 Laws of Malaysia Act 823 7 Finance LAWS OF MALAYSIA Act 823 FINANCE ACT 2019 An Act to amend the Income Tax Act 1967, the Real Property Gains Tax Act 1976, the Stamp Act 1949, the Petroleum (Income Tax) Act 1967, the Sales Tax Act 2018, the Finance Act 2010 and the Finance Act 2018. [ ] ENACTED by the Parliament of Malaysia as follows: Chapter I PRELIMINARY Short title 1. This Act may be cited as the Finance Act 2019. Amendment of Acts 2. The Income Tax Act 1967 [Act 53], the Real Property Gains Tax Act 1976 [Act 169], the Stamp Act 1949 [Act 378], the Petroleum (Income Tax) Act 1967 [Act 543], the Sales Tax Act 2018 [Act 806], the Finance Act 2010 [Act 702] and the Finance Act 2018 [Act 812] are amended in the manner specified in Chapters II, III, IV, V, VI, VII and VIII respectively. 8 Laws of Malaysia Act 823 Chapter II AMENDMENTS TO THE INCOME TAX ACT 1967 Commencement of amendments to the Income Tax Act 1967 3. (1) Paragraph 5(a) has effect from the year of assessment 2020 until the year of assessment 2025. (2) Section 6 has effect for the year of assessment 2019 and subsequent years of assessment. (3) Sections 4, 7, 8, 9, 14, 20 and 21, and paragraph 19(a) have effect for the year of assessment 2020 and subsequent years of assessment. (4) Paragraphs 5(b), 16(a) and 19(b), and sections 10, 11, 13, 15, 17 and 18 come into operation on 1 January 2020. (5) Section 12 and paragraph 16(b) come into operation on the coming into operation of this Act. 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 substituting for subsection (9) the following subsection: “(9) Any reference— (a) in subsection 107 c (4 a ), to a company which has a paid-up capital in respect of ordinary shares of two million five hundred thousand ringgit and less at the beginning of the basis period for a year of assessment; and (b) in paragraph 2a of Schedule 1 and paragraph 19a of Schedule 3, to a company which has a paid-up capital in respect of ordinary shares of two million five hundred thousand ringgit and less at the beginning of the basis period for a year of assessment and gross income from source or sources consisting of a business not exceeding fifty million ringgit for the basis period for that year of assessment, shall exclude a business trust and a company which is established for the issuance of asset-backed securities in a securitization transaction approved by the Securities Commission.”. Finance 9 Amendment of section 6 5. Subsection 6(1) of the principal Act is amended— (a) in paragraph (i), by substituting for the words “for a period of four years from the year of assessment 2016” the words “for a period of six years from the year of assessment 2020”; and (b) in paragraph (l), by substituting for the words “death or permanently leaving Malaysia” the words “death, permanently leaving Malaysia, healthcare or housing, for which such withdrawal shall be in compliance with the criteria as set out in the relevant guidelines of the Securities Commission”. Amendment of section 6a 6. Section 6a of the principal Act is amended— (a) in subsection (1), by substituting for the words “subsections (2) and (3)” the words “subsections (2), (2a) and (3)”; (b) by inserting after subsection (2) the following subsections: “(2 a ) A rebate shall be granted for a year of assessment in respect of departure levy which is charged and levied under the Departure Levy Act 2019 [Act 813] on any person who leaves Malaysia by air for the purpose of performing umrah or other religious pilgrimage and shall be evidenced by the boarding pass and— (a) in the case of umrah, a copy of the visa issued by the embassy of the Kingdom of Saudi Arabia; or 10 Laws of Malaysia Act 823 (b) in the case of any other religious pilgrimage, a written verification by a religious body recognised by the Committee for the Promotion of Inter Religious Understanding and Harmony Among Adherents, Prime Minister’s Department. (2b) For the purpose of subsection (2a), the rebate— (a) shall be granted for not more than two times in respect of the departure levy paid for the purpose of performing umrah or other religious pilgrimage; and (b) shall not be granted in respect of the departure levy paid for the purpose of performing hajj.”; and (c) in subsection (4), by substituting for the words “subsections (2) and (3)” the words “subsections (2), (2a) and (3)”. Amendment of section 34 7. Subsection 34(6) of the principal Act is amended— (a) in paragraph (h), by substituting for the words “infrastructure and information and communication technology” the words “infrastructure, information and communication technology or maintenance of a building designated as a heritage site by the Commissioner of Heritage under the National Heritage Act 2005 [Act 645]”; and (b) in the proviso to paragraph (k), by substituting for the words “seven hundred thousand ringgit” the words “one million ringgit”. Amendment of section 44 8. Section 44 of the principal Act is amended— (a) in paragraph (1)(d), by substituting for the words “or (11c)” the words “, (11c) or (11d)”; Finance 11 (b) in subsection (6), by substituting for the proviso to that subsection 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, organization or fund approved for the purposes of this section by the Director General shall not exceed ten per cent of the aggregate income of that person in the relevant year.”; (c) by substituting for subsection (6b) the following subsection: “(6b) Where any institution, organization, appropriate religious authority, body or public university is aggrieved by the decision of the Director General in respect of an application made under subsection (6) or (11d), the institution, organization, appropriate religious authority, body or public university may, within thirty days after being informed of the decision, appeal to the Minister and the Minister may make any decision as he considers fit.”; (d) in subsection (11b), by substituting for the proviso to that subsection the following proviso: “Provided that the amount to be deducted pursuant to this subsection shall not exceed the difference between the amount of ten per cent 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), (11c) and (11d) for that relevant year.”; (e) in subsection (11c), by substituting for the proviso to that subsection the following proviso: “Provided that the amount to be deducted pursuant to this subsection shall not exceed the difference between the amount of ten per cent 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), (11b) and (11d) for that relevant year.”; and 12 Laws of Malaysia Act 823 (f) by inserting after subsection (11c) the following subsections: “(11 d ) There shall be deducted pursuant to this subsection from the aggregate income of a relevant person for the relevant year reduced by any deduction falling to be made for that year in accordance with subsection (1) an amount equal to any gift of money in the form of— (a) wakaf made by him in the basis period for that year to any appropriate religious authority established under any written law, body established by that appropriate religious authority or public university allowed by that appropriate religious authority to receive wakaf; or (b) endowment made by him in the basis period for that year to a public university: Provided that— (a) the wakaf or endowment is made for the purpose of achieving the objective of establishment of the appropriate religious authority, body or public university; (b) the appropriate religious authority, body or public university is approved by the Director General for the purposes of this section on the application of the appropriate religious authority, body or public university concerned; and (c) the amount to be deducted pursuant to this subsection shall not exceed the difference between the amount of ten per cent 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), (11b) and (11c). (11e) For the purpose of subsection (11d), “public university” means a higher educational institution having the status of a University established under the Universities and University Colleges Act 1971 [Act 30] and the Universiti Teknologi MARA established under the Universiti Teknologi MARA Act 1976 [Act 173].”. Finance 13 Amendment of section 46 9. Subsection 46(1) of the principal Act is amended— (a) by substituting for paragraph (g) the following paragraph: “(g) medical expenses expended or deemed expended under subsection (3) in that basis year by that individual— (i) on himself if he is undergoing treatment for a serious disease or on his wife or child who is undergoing treatment for a serious disease, or in the case of a wife, on herself if she is undergoing treatment for a serious disease or on her husband or child who is undergoing treatment for a serious disease; or (ii) on himself if he is undergoing fertility treatment or on his wife who is undergoing fertility treatment, or in the case of a wife, on herself if she is undergoing fertility treatment or on her husband