Malaysia legislation
Section 18
Section 18
(a)
any disbursements or expenses not being money wholly and exclusively laid out or expended for the purpose of producing the gross income;
(b)
any capital withdrawn or any sum employed or intended to be employed as capital;
(c)
any amount in respect of any payment to any pension, provident, savings, widows and orphans or other similar fund or society which is not an approved scheme;
(d)
(Deleted by Act A353);
(e)
rent of, or cost of repairs to, any premises or any part thereof not used for the purpose of his petroleum operations;
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(f)
the depreciation of any premises, buildings, structures, works of a permanent nature, plant, machinery or fixtures;
(g)
any expenditure incurred in relation to petroleum operations, being expenditure which is qualifying expenditure for the purposes of the First Schedule or the
Second Schedule and which but for this paragraph would be deductible in ascertaining the adjusted income;
(h)
interest, royalty, services, technical advice, assistance, rent or other payments made under any agreement or arrangement for the use of moveable property derived from
Malaysia or contract payment to a non-resident contractor from which tax is deductible under the provisions of the law for the time being in force in Malaysia relating to income tax, if tax has not been deducted therefrom and paid to the
Director General in accordance therewith:
Provided that—
(i)
this paragraph shall not apply if the payer has paid the amount of deduction of tax and the increased amount which is equal to ten per cent of that deduction which are due and payable under the provisions of that law;
and
(ii)
where such tax is deducted or such amount is paid after the due date for the furnishing of a return for a year of assessment that relates to such payment, the tax or amount so paid shall not prejudice the imposition of penalty under subsection 52(2) if a deduction on such payment is made in such return or is claimed in the information given to the Director
General in arriving at the adjusted income of the payer;
(i)
(Deleted by Act A381);
(j)
any amount of chargeable tax payable under this Act;
Petroleum (Income Tax)
(k)
any amount of income tax or of any identical or substantially similar tax;
(l)
(Deleted by Act 619);
(m)
any sum paid by way of rentals in respect of a motor vehicle, other than a motor vehicle licensed by the appropriate authority for commercial transportation of goods or passengers, in excess of fifty thousand ringgit:
Provided that if the motor vehicle has not been used by any person for any purpose prior to the rental and the total cost of the motor vehicle does not exceed one hundred and fifty thousand ringgit, any sum paid by way of rental in excess of one hundred thousand ringgit:
Provided further that the maximum amount of deduction in respect of the rentals of such motor vehicle in the year of assessment and subsequent years of assessment shall not in the aggregate exceed fifty thousand ringgit or one hundred thousand ringgit, as the case may be, in respect of that motor vehicle;
(n)
a sum equal to fifty percent of any expenses incurred in the provision of entertainment including any sums paid to an employee of that chargeable person for the purpose of defraying expenses incurred by that employee in the provision of entertainment:
Provided that this paragraph shall not apply to the expenses incurred in the provision of entertainment to his employees except where such provision is incidental to the provision of entertainment for others;
(o)
notwithstanding the proviso to paragraph (n), any expenditure incurred in the provision of a benefit or amenity to an employee consisting of a leave passage within or outside Malaysia;
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(p)
any amount paid or to be paid in respect of goods and services as input tax by the chargeable person if he is liable to be registered under the *Goods and Services Tax Act 2014
and has failed to do so, or if he is entitled under that Act to credit that amount as input tax; or
(q)
any amount of output tax paid or to be paid under the
*Goods and Services Tax Act 2014 which is borne by the chargeable person if he is registered or liable to be registered under the Act.
(1A)
Notwithstanding any other provisions of this Act, where a person is required under section 34 to furnish to the Director General any information within the time specified in a notice or such other time as may be allowed by the Director General, and that information concerns wholly or in part a deduction claimed by that person in arriving at the adjusted income of that person from any source for the basis period for a year of assessment, no deduction from the gross income from that source for that period shall be allowed in respect of such claim if the person fails to provide such information within the time specified in that notice or such extended time as may be allowed by the Director General.
(2)
It is hereby declared that section 15 except in so far as it relates to expenses of the kind specified in paragraphs (1)(a) to (e) thereof, is not an express provision of this Act within the meaning of this section.
(3)
Paragraph (1)(h) shall not apply if for a year of assessment a person is exempt under section 65C or the Promotion of Investments
Act 1986 [Act 327], in respect of all income of that person from all sources not being exemption on income equal to capital expenditure incurred.
*NOTE—The Goods and Services Tax Act 2014 [Act 762] has since been repealed by the Goods and Services Tax (Repeal) Act 2018 [Act 805] which comes into operation on 1 September 2018–see section 3 of Act 805.
Petroleum (Income Tax)
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Adjusted loss