TAXATION 1

DIVIDEND, INTEREST, RENTAL & ROYALTY INCOME s 4(d)

DIVIDEND INCOME 1. Rental income assessed on receipt basis.

2. Advance rental – in the year of receipt
DEFINITION: Distribution of profit by the company to
shareholders Security deposit
Derived from: - Kalau deposit ni REFUNDABLE, it is not
Malaysia EXAMPTED taxable as it is not an income.
Foreign source EXAMPTED - Kalau deposit is NOT REFUNDABLE, it is
# CAPITAL APPRECIATION is not taxable # taxable.
- If it change, it will follow the one yg dia
change tu.
INTEREST INCOME Deductions of expenses
DEFINITION: compensation of the delay payment 1. Cost of repairs and maintenance of the
Interest income from money deposited from property
approved institutions will be Tax Exampted 2. Insurance premium on fire/burglary
3. Cost of supervision & rental collection
a) Bank or financed company approved under 4. Cost of obtaining tenant to replace the old
Banking and Financial Institution tenant
b) Bank licensed under Islamic Banking Act 5. Interest paid on loan facility
1983 6. Cost renewing rental agreement & other
c) Development financial institution under miscellaneous expenses
Development Financial Instituion Act 2002 7. Quit rent & assessment (cukai tanah, pintu,
d) Lembaga Tabung Haji establish under …)
Lembaga Tabung Haji Act 1995 8. Security services
e) Malaysia Building Society Berhad under 9. Repainting of rented premises.
Companies Act 1965
f) Co-operative society under Co-operative Expenses not allowable
Scocieties Act 1993 - Cost 0btaining the first tenant (these const
g) Borneo Mortgage Finance Berhad under incurred to create source of income)
Companies Act 1965
Temporary non-occupation
- Adjusted rental income negative, no taxable
RENTAL INCOME income.
DEFINITION: any sum paid for rhe use or occupation Capital allowance
of any premises or part thereof or for hiring of
anything. Include bothe movable (in/outside - When rental income is assessed under s 4(d),
Malaysia) & immovable (in Malaysia) all capital allowance under it cannot be
claimed under s 4(a).
2 classes:
Under s 4(a) Under s 4(d)
Provide NOT provide:
a) Maintainace a) Maintainace
services services
b) Support services b) Support services
Actively provided both
services

Rental assessment:
 TAXATION 1
DIVIDEND, INTEREST, RENTAL & ROYALTY INCOME s 4(d)

ROYALTY INCOME
DEFINITION: any sum paid as consideration for the
use or right to use.
Derivation
Subjected to tax in Malaysia if:
- Royalty income is dericed from Malaysia
- Received in Malaysia from outside Malaysia

Para 32C
- Performance approved by minister
Para 32D
- Income of RM 20 000 of any musical
composition
Para 32E
- Purposes of validation, moderation or
accreditation of franchised education
program