Malaysia legislation
Section 16
Section 16
(2)
There shall be deducted in the case of any debt owing to the relevant chargeable person the amount of which has been included in
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the relevant gross income or in the gross income of the relevant chargeable person for the basis period for a year of assessment prior to the year of assessment to which the relevant period relates—
(a)
if at the end of the relevant period the debt is reasonably estimated in all the circumstances of the case to be wholly irrecoverable, an amount equal to the amount of the debt;
(b)
if at the end of the relevant period the debt is reasonably estimated in all the circumstances of the case to be partly irrecoverable, an amount equal to so much of the debt as is estimated to be irrecoverable, the deduction being in either case reduced by the amount of any deduction made under this subsection in respect of the debt for the basis period for a year of assessment prior to the year of assessment to which the relevant period relates.
(3)
Where in the relevant period the relevant chargeable person has made a contribution to an approved scheme in respect of an employee of the relevant chargeable person, then—
(a)
if the employee’s remuneration as determined under the rules, regulations, by-laws or constitution of that scheme for the period for which the contribution is made (that period being a period which coincides with or overlaps the relevant period) is deductible as a whole (or in parts aggregating the whole), in computing the adjusted income for any basis period or periods for a year or years of assessment, there may be deducted from the relevant gross income an amount equal to the contribution or nineteen per cent of the employee’s remuneration as so determined for the period for which the contribution is made, whichever is the less;
(b)
if only a part or parts of that remuneration is or are so deductible, there may be deducted from the relevant gross income an amount equal to so much of the contribution or of that percentage of the remuneration (whichever of those amounts is the less) as bears to the whole of the contribution or to that percentage of the remuneration, as the case may
Petroleum (Income Tax)
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be, the same proportion as that part or the aggregate of those parts, as the case may be, bears to the whole of that remuneration:
Provided that, where on the first establishment of a scheme of the kind referred to above a special contribution is made thereto in the relevant period by the relevant chargeable person whereby any of its employees engaged in activities relating to the production of the relevant gross income or gross income of the relevant chargeable person for any basis period for a year of assessment (that basis period being prior to the relevant period) may qualify for the benefits under that scheme, the Director General may when approving that scheme authorize deductions in respect of that special contribution of such amounts (being amounts which in total are equal to or less than the special contribution) from the gross income of the relevant chargeable person for the basis periods for such years of assessment as he thinks fit.
(4)
There shall be deducted from the relevant gross income all intangible expenses for drilling exploration, appraisal and development wells, whether productive or unproductive, incurred by the relevant chargeable person during the relevant period in exploration, development or production areas.
(5)
There may be deducted from the relevant gross income such amounts in respect of capital expenditure as may be allowed for the relevant period pursuant to the First Schedule.
(6)
There shall be deducted from the relevant gross income an amount equal to the cash payment made by the relevant chargeable person on petroleum which is won in the relevant period.
(7)
(Deleted by Act A353).
(7A)
There shall be deducted from the relevant gross income an amount equal to the amount of expenditure incurred by the relevant chargeable person in the relevant period on the provision of any equipment, or on the alteration or renovation of premises necessary to assist any disabled person employed by him in the production of his gross income.
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(7B)
There shall be deducted from the relevant gross income an amount equal to the amount of expenditure incurred by the relevant chargeable person in the relevant period on the provision of services, public amenities and contributions to a charity or community project pertaining to education, health, housing, conservation or preservation of environment, enhancement of income of the poor, infrastructure and information and communication technology, approved by the Minister:
Provided that where a deduction has been made under this paragraph, no further deduction of the same amount shall be allowed under subsection 22(1).
(7BA) An amount equal to the expenditure incurred by a chargeable person on the provision of infrastructure in relation to his business which is available for public use, subject to the prior approval of the
Minister:
Provided that where a deduction has been made under this paragraph, no further deduction of the same amount shall be allowed under subsection 22(1).
(7C)
There shall be deducted from the relevant gross income an amount equal to the expenditure incurred not being capital expenditure on land, premises, buildings, structures or works of a permanent nature or on alterations, additions or extensions thereof or in the acquisition of any rights in or over any property, by the relevant chargeable person in the relevant period on the provision and maintenance of a child care centre for the benefit of persons employed by him in his business.
(7D)
There shall be deducted from the relevant gross income an amount equal to the amount of expenditure incurred by the relevant chargeable person in the relevant period in establishing and managing a musical or cultural group approved by the Minister.
(7E)
There shall be deducted from the relevant gross income an amount equal to the amount of expenditure incurred by the relevant chargeable person in the relevant period for sponsoring any arts or cultural activity approved by the Ministry of Information,
Communication and Culture:
Petroleum (Income Tax)
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Provided that the amount deducted shall not exceed two hundred thousand ringgit.
(7F)
There shall be deducted from the relevant gross income an amount equal to the amount of the expenditure incurred by the relevant chargeable person in the relevant period on the provision of a scholarship to a student for any course of study leading to an award of a diploma, or degree (including a degree at a Masters or Doctorate level) or the equivalent of a diploma or degree undertaken at a higher educational institution established or registered under the laws regulating such establishment or registration in Malaysia or authorized by any order made under section 5A of the Universities and University
Colleges Act 1971 [Act 30]:
Provided that the scholarship—
(a)
shall only be given to a student—
(i)
who is receiving full-time instruction at such higher educational institution;
(ii)
who has no means of his own; and
(iii)
the total monthly income of whose parents or guardian, as the case may be, does not exceed five thousand ringgit; and
(b)
shall not include payments other than payments required by such higher educational institution relating to the course of study, and educational aids and reasonable cost of living expenses during the student’s period of study at such higher educational institution.
(7G)
There shall be deducted from the relevant gross income an amount equal to the amount of the expenditure, not being capital expenditure, incurred by the relevant chargeable person in the relevant period for the purposes of obtaining certification for recognized quality systems and standards and evidenced by a certificate issued by a certification body as determined by the Minister:
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Provided that the expenditure incurred in the relevant period shall be deemed to be incurred by the relevant chargeable person in the basis period for the year of assessment in which the certificate is issued.
(7H)
There shall be deducted from the relevant gross income an amount equal to the expenditure incurred by the relevant chargeable person in the relevant period on the provision of practical training in
Malaysia, in relation to his business, to an individual who is—
(a)
resident in the basis year for a year of assessment; and
(b)
not an employee of that person.
(8)
Where any deduction in respect of any matter is capable of being made under this section, no deduction in respect of that matter shall be made under section 15.
Stock in trade