Explanation and TAX treatment for TAX267 and TAX317

No Particulars Explanation
.
1. Year of assessment for Budget 2019
Final Examination Dec Applicable to TAX267 and TAX317
2019 and Jun 2020

2. Individual tax reliefs and Please refer to Budget 2019

rebates

3. Computation of income tax Please refer to:

payable of a resident  PR 4/2018 Part I - Gifts contributions and
individual allowable deductions
 PR 5/2018 Part II – Computation of total income
and chargeable income
 PR 6/2018 Part III – Computation of income tax
and tax payable

4. Tax exemption on
employment income:
 Living accommodation Please refer to PR 3/2005
benefit provided for the
employee by the
employer (05.02.2009)

 Perquisites from Please refer to PR 2/2013

employment:

o Travelling Travelling allowance is exempted from tax up to a

allowance maximum amount of RM6,000 per year irrespective
of the period of employment in the assessment year.

Please refer to Para 8.2.1 PR 2/2013

o Childcare Childcare allowance is exempted from tax up to a
allowance maximum amount of RM2,400 per year irrespective
of the period of employment in the assessment year.

Please refer to Para 8.2.4 PR 2/2013

 Benefits in kind Please refer to PR 3/2013

 Gratuity Please refer to PR 9/2016

 Compensation for loss Please refer to PR 1/2012

of employment

5. Resident status of Please refer to PR 11/2017

individual
6. Business expenses:
 Drawings for business If the drawings have not yet recorded, the whole
amount (market value) will be added back to net
profit.

If the drawings have been recorded, the difference

between market value and the cost will be added
back to net profit.
 Leave passage Only yearly events are allowed for deduction.
Please refer to Para 7.8 PR 4/2015

 Entertainment Please refer to PR 4/2015

expenses
 Insurance premium Revoked as double deduction wef YA 2016
paid for the export or
import of cargo insured
with local insurance
companies

 Business expenses in Please refer to PR 3/2019

respect of disabled
person

 Tax deduction for Tax deduction will be given to employers who have
settlement of settled PTPTN loans on behalf of their employee
employee’s PTPTN subject to the following conditions:
loan a. Full-time employee
b. The amount is not recovered from the employees
c. Payment made between 1 January 2019 to 31
December 2019

Effective from 1 Jan 2019 – 31 Dec 2019

 Remuneration paid to Double deduction subject to the following conditions:

senior citizen or ex- a. Employers hiring the following categories of
convicts employees:
 Senior citizens who are above 60 years old or
 Ex-convicts;
b. Employment must be on a full-time basis;
c. Monthly remuneration does not exceed RM4,000.

Effective from YA 2019 to 2020

 Other categories of Please to MIA Budget Commentary 2019 pp. 106 -
double deduction 126
7. Interest income from late Treated as s 4(c) income.
payment of trade
receivables Please refer to Para 5.2 PR 3/2016
8. Income from letting of real Please refer to PR 12/2018
property
9. Tax exemption on rental 50% income tax exemption on rental income earned
income on residential by Malaysian resident individuals subject to the
homes received by following conditions:
 Malaysian individuals a. Rental income received not exceeding RM2,000
per month for each residential home.
b. The residential home must be rented under a
legal tenancy agreement between owner and
tenant.
c. Tax exemption is given for a maximum period of
3 consecutive years of assessment

Effective from YA 2018 to YA 2020

10. Unabsorbed business Unabsorbed business losses up to the YA 2018 shall
losses be deductible against the aggregate of statutory
incomes until the YA 2025. Any amount that has not
been deducted at the end of the YA 2025 shall be
disregarded.
(Carrying forward of losses limited to 7 years)

11. Capital allowances:

Unabsorbed capital No time limit for unabsorbed capital allowances

allowances (Refer to Amended Finance Bill 2018)

IBA – para 16B Please refer para 8 PR 3/2018

12. Basis period of a company Please refer to PR 8/2014

13. Amendment as per Budget Please refer to the appendices as per exam Dec
2019 to: 2019
 Company tax rate
 RPGT Rate
 Sales Tax and Service
Tax
14. WHT:
Special classes of income Amendment to the definition of special classes of
income: s 4A(ii) as follows:
“amounts paid in consideration of any advice given,
or assistance or services rendered in connection with
management or administration of any scientific,
industrial or commercial undertaking, venture, project
or scheme; or.” (Refer to Finance Act 2018)

Please refer to PR 11/2018 for treatment of special

classes of income (not PR 1/2014)
15. RPGT:
 Para 12, NGNL Wef 1/1/2019, no more restriction to holding period
within 5 years in NGNL

Conditions for NGNL:

 Transfer of real property as a gift
  To close family members between husband and
wife, parent and child, grandparent and
grandchild
 Donor is a Malaysian citizen
 Citizenship is determined at the time of the gift is
given
 Donor is relieved from RPGT
 Disposal price of the
donor:
o In NGNL situation DP is deemed equal to AP

o When the donor is DP is deemed disposed at market value

non-Malaysian
citizen
 Acquisition price of the Acquisition price paid by the donor
beneficiary: (+) Permitted expenses incurred by the donor
o In NGNL situation; (+) Incidental costs related to acquisition by the
OR beneficiary
o When the donor is (–) Capital receipts by the beneficiary
non-Malaysian
citizen
 Disposal in the 6th year Wef 1/1/2019, subject to RPGT:
and subsequent years  Individual (citizen/PR) 5%
 Individual (non-citizen/non-PR) 10%
 Companies 10%

 RPGT exemption Subject to the following conditions:

 Disposal by a Malaysian citizen;
 Disposal of low cost, medium low and affordable
residential homes;
 Consideration received at the price of
RM200,000 and below (refer PUA 360);
 In the 6th and subsequent years.

16. Sales Tax and Service Tax Starting exam Dec 2019, we will use Sales Tax Act
2018 and Service Tax Act 2018.

The coverage of Sales Tax excludes refund,

drawback, remission, sales tax facilities and bad
debts.

The coverage of Service Tax excludes credit

mechanism.

Early notification:
1. New syllabus for TAX267 will take effect from semester Sep 2020 – Dec 2020.
2. New syllabus for TAX317 will take effect from semester Mar 2021 – Jun 2021.