FINANCE ACT 2021

Sections 7, 10, 11, 12, 15, 19 and 28, paragraph 9(b)

in relation to subparagraph 46(1)(h)(iii) of the Income Tax

Act 1967 and paragraph 9(c) have effect for the year of assessment 2022 and subsequent years of assessment.

Paragraph 5(b) in relation to paragraph 6(1)(p) of the

Income Tax Act 1967 and paragraph 26(b) in relation to Part XX of Schedule 1 to the Income Tax Act 1967 come into operation from 1 January 2022 until 30 June 2022.

Section 8 is deemed to have effect for the year of assessment 2019 and subsequent years of assessment.

Paragraphs 9(a), (d), (g) and (h) have effect for the years of assessment 2022 and 2023.

Paragraph 9(b) in relation to subparagraphs 46(1)(h)(i)

and (ii) of the Income Tax Act 1967 has effect for the year of assessment 2021 and subsequent years of assessment.

Paragraph 9(e) in relation to subparagraphs 46(1)(s)(i)

and (ii) of the Income Tax Act 1967 and paragraph 26(a) have effect for the year of assessment 2022.

Paragraph 9(e) in relation to subparagraph 46(1)(s)(iii) of the Income Tax Act 1967 and paragraph 9(f) have effect for the years of assessment 2021 and 2022.

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Amendment of section 5

in paragraph (n), by substituting for the full stop at the end of that paragraph a semicolon; and

by inserting after paragraph (n) the following paragraphs:

“(o) subject to section 109da but notwithstanding any other provisions of this Act, income tax shall be charged for each year of assessment upon the income of a unit holder other than an individual which consists of interest distributed or credited by a unit trust that is a retail money market fund referred to in subsection 61(1a) at the appropriate rate as specified under Part XIX of Schedule 1;

income tax shall be charged upon the income of a person who is a resident which is received in

Malaysia from outside Malaysia from 1 January 2022

until 30 June 2022 at the appropriate rate as specified under Part XX of Schedule 1.”.

Amendment of section 6d

in paragraph (q), by deleting the word “or” at the end of that paragraph;

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in paragraph (r), by substituting for the full stop at the end of that paragraph the words “; or”; and

by inserting after paragraph (r) the following paragraph:

“(s) any payment from which tax is deductible under section 107d, if tax has not been deducted therefrom and paid to the Director General in accordance with that section:

Provided that—

this paragraph shall not apply if the payer has paid the amount of tax and the increased sum due from him to the Government in accordance with subsection 107d(3); and

in subparagraph (f)(iii)—

by substituting for the words “years of assessment 2021 and 2022” the words “years of assessment 2022 and 2023”; and

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by substituting for paragraph (h) the following paragraph:

“(h) an amount limited to a maximum of one thousand ringgit expended or deemed expended under subsection (3) in that basis year by that individual on himself or on his wife or on his child, or in the case of a wife, on herself or on her husband or on her child, in respect of—

complete medical examination expenses as evidenced by receipts issued by a hospital or a medical practitioner registered with the Malaysian Medical Council;

in paragraph (n)—

by substituting for the words “two hundred and fifty ringgit” the words “three hundred and fifty ringgit”; and

in paragraph (c) of the proviso to paragraph (r), by substituting for the words “years of assessment 2020

and 2021” the words “years of assessment 2020 until 2023”;

by substituting for paragraph (s) the following paragraph:

“(s) an amount limited to a maximum of one thousand ringgit expended or deemed expended under subsection (3) in that basis year by that individual as evidenced by receipts on the amount expended—

for the payment of accommodation at the premises registered with the Commissioner of Tourism under the Tourism Industry

Act 1992 [Act 482];

f o r t h e p u r p o s e s o f subparagraphs (i) and (ii), the payment is made on or after 1 March 2020 but not later than 31 December 2022;

and

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f o r t h e p u r p o s e s o f subparagraph (iii), t h e purchase is made on or after 1 January 2021 but not later than 31 December 2022;”;

in paragraph (t)—

in paragraph (a) of the proviso, by substituting for the words “31 December 2020” the words

“31 December 2022”; and

in paragraph (u), by substituting for the full stop at the end of that paragraph the words “; and”; and

by inserting after paragraph (u) the following paragraph:

“(v) an amount limited to a maximum of two thousand and five hundred ringgit expended for each basis year for the years of assessment 2022 and 2023 by that individual for the payment of installation, rental, purchase including hire-purchase of equipment or subscription for use of electric vehicle charging facility for his own vehicle and not being used for the purposes of his own business as evidenced by receipts issued in respect of the payment on the amount expended.”.

Amendment of section 49

in paragraph (1)(b), by inserting after the words

“Employees Provident Fund Act 1991 [Act 452]” the words

“, or a pensionable officer within the meaning of section 2 of the Pensions Act 1980”; and

in subsection (2), by inserting after the words

“subsection (1),” the words “other than voluntary contributions made by a self-employed person within the meaning of the Employees Provident Fund Act 1991 or a pensionable officer within the meaning of section 2

of the Pensions Act 1980,”.

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Amendment of section 50

in subparagraph (9)(a)(iii)—

by inserting after the words “in connection with the” the words “family fund,”; and

in subparagraph (9)(b)(iii)—

in subsubparagraph (A)—

by inserting after the words “in relation to the” the words “family fund,”; and

by inserting the word “or” at the end of that subsubparagraph;

by inserting after the words “in relation to the” the words “family fund,”; and

by substituting for the word “or” at the end of that subsubparagraph the word “and”; and

in subparagraph (9)(b)(iv), by inserting after the words

“in connection with his” the words “family business and”;

in subparagraph (10)(a)(iii)—

by inserting after the words “in connection with the” the words “family fund,”; and

in subparagraph (10)(b)(iii)—

in subsubparagraph (A)—

by inserting after the words “in relation to the” the words “family fund,”; and

by inserting the word “or” at the end of that subsubparagraph;

by inserting after the words “in relation to the” the words “family fund,”; and

by substituting for the word “or” at the end of that subsubparagraph the word “and”; and

in subparagraph (10)(b)(iv), by inserting after the words

“in connection with his” the words “family business and”;

by deleting subsection (10b);

by deleting subsection (11);

by deleting subsection (17); and

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by inserting after the deleted subsection (17) the following subsections:

“(17a)  Allowances under Schedule 3 shall only be available for deduction against the adjusted income of the shareholders’ fund of the takaful operator and the balance of such allowances shall not be available for deduction against the adjusted income of the family fund or general fund of the takaful operator.

The allowances under subsection (17a)

shall be in relation to any asset acquired under the shareholders’ fund of the takaful operator on or after 1 January 2022.

Notwithstanding paragraph 75 of Schedule 3, any unabsorbed allowances of the shareholders’ fund of the takaful operator shall only be available for deduction against the adjusted income for the basis period for a year of assessment and subsequent years of assessment in respect of the shareholders’ fund of the takaful operator.

Where in respect of any asset acquired prior to 1 January 2022, allowances under Schedule 3 which have been claimed or ought to have been claimed as deduction against the adjusted income of the family fund or general fund of the takaful operator, such allowances shall be claimed as deduction against the adjusted income of the family fund or general fund of the takaful operator until the whole amount of the allowances is claimed.”.

Amendment of section 61

any person who is assessable and chargeable to tax under this Act;

any person who is required under this Act to furnish a return; or

any person who is a citizen aged eighteen years old and above.

The tax identification number referred to in subsection (1)

shall be assigned by the Director General as he may determine.

Any person who has been assigned a reference number by the Director General in exercising his powers and functions under this Act on or before 1 January 2022 is deemed to have been assigned a tax identification number under this

Act and the reference number shall be the tax identification number of that person.”.

Amendment of section 77a

Where a financial institution is required to furnish bank account information in accordance with subsection (1), that financial institution shall not disclose to any person that such request was made to the financial institution.

In this section, “financial institution” means—

in paragraph (a), by inserting after the words “company,”

the words “limited liability partnership,”;

in paragraph (c), by inserting after the words “company,”

the words “limited liability partnership,”; and

in the proviso, by inserting after the words “company,”

the words “limited liability partnership,”.

New section 107d

give notice in writing to the payer requiring the payer to deduct and pay tax at some other rates or to pay or credit the payments without deduction of tax; or

under special circumstances, allow extension of time for tax deducted to be paid over.

Subsection (1) shall apply if the total sum of payments, whether in monetary form or otherwise, received by that agent, dealer or distributor from the payer in the immediately preceding basis year for a year of assessment arising from sales, transactions or schemes carried out by that agent, dealer or distributor is more than one hundred thousand ringgit.

Where the payer fails to pay any amount due from him under subsection (1), the amount which the payer fails to pay shall be increased by a sum equal to ten per cent of the amount which the payer fails to pay, and that amount and the increased sum shall be a debt due from the payer to the Government and shall be payable forthwith to the Director General.

Pursuant to this section, where any amount is paid to the Director General by the payer or recovered by the Director General from the payer—

Notwithstanding the foregoing subsections, where the amount due from the payer under subsection (1) is increased by a sum under subsection (3), the Director General may in

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his discretion for any good cause shown remit the whole or any part of that sum and, where the amount remitted has been paid, the Director General shall repay the same.

In this section, “agent”, “dealer” or “distributor” means any individual resident who is authorized by a company to act as its agent, dealer or distributor, and who receives payments, whether in monetary form or otherwise, from the company arising from sales, transactions or schemes carried out by him as its agent, dealer or distributor.”.

New section 109da

Where a unit trust, in this section referred to as the payer, distributes income which is derived from Malaysia to a unit holder, the payer shall upon distributing the income, deduct therefrom tax at the rate applicable to such income and shall within one month after distributing such income, render an account and pay the amount of that tax to the Director General:

Provided that the Director General may under special circumstances allow extension of time for tax deducted to be paid over.

Where the payer fails to pay any amount due from him under subsection (2), that amount which the payer fails to pay shall be increased by a sum equal to ten per cent of that amount, and the amount which the payer fails to pay

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and the increased sum shall be a debt due from the payer to the Government and shall be payable forthwith to the Director General.

Pursuant to this section, where any amount is paid to the Director General by the payer or recovered by the Director General from the payer—

Notwithstanding the foregoing subsections, where the amount due from the payer under subsection (2) is increased by a sum under subsection (3), the Director General may in his discretion for any good cause shown remit the whole or any part of that sum and, where the amount remitted has been paid, the Director General shall repay the same.

Section 110 shall apply mutatis mutandis to tax deducted under this section other than to tax deducted in respect of a non-resident unit holder.”.

Amendment of section 120

in paragraph (a), by substituting for the words “or 87”

the words “, 87 or subsection 106a(1)”; and

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in paragraph (d), by substituting for the words

“or subsection 153(1)” the words “, subsection 106a(2)

or 153(1)”.

Amendment of section 127

in Part I, in paragraph 2—

by renumbering the existing paragraph as subparagraph (1); and

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by inserting after Part XVIII the following parts:

“Part XIX

Notwithstanding Parts I, II and IV, income tax shall be charged for a year of assessment on the income of a unit holder other than an individual referred to in section 109da which is derived from Malaysia at the rate of 24 per cent of gross.

by substituting for paragraph 28 the following paragraph:

“28.  The income arising from sources outside Malaysia and received in Malaysia by any person who is not resident in Malaysia.”;

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in paragraph 33a, by substituting for subparagraph (2)

the following subparagraph:

“(2)  The exemption under subparagraph (1) shall not apply to—

interest paid or credited to a company in the same group; or

interest paid or credited by a special purpose vehicle to a company pursuant to the issuance of asset-backed securities lodged with the Securities Commission

Malaysia from 1 January 2022 where the company and the person who established the special purpose vehicle solely for the issuance of the asset-backed securities are in the same group.”;

in paragraph 33b—

in subsubsubparagraph (2)(b)(iii), by substituting for the full stop at the end of that subsubsubparagraph the words “; or”; and

by inserting after paragraph 36 the following paragraph:

“37.  In this Schedule, “special purpose vehicle” means a company incorporated under the Companies Act 2016 or a company incorporated under the Labuan Companies Act 1990

[Act 441] which has made an election under section 3a of the Labuan Business Activity Tax Act 1990 and established solely for the purpose of issuance of sukuk or debenture for asset-backed securities in a securitization transaction lodged with the Securities Commission Malaysia or approved by the Labuan Financial Services Authority.”.

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Amendment of Schedule 7a

in paragraph 2b—

in subparagraph (a), by substituting for the words

“and 2022” the words “, 2022, 2023 and 2024”;

by substituting for the words “and 2022”

the words “, 2022, 2023 and 2024”; and

by deleting the word “or” at the end of that subparagraph;

by substituting for the words “year of assessment 2022” the words “years of assessment 2022, 2023 and 2024”; and

by substituting for the full stop at the end of that subparagraph the words “; or”;

and

ends in the year of assessment 2023, an allowance under paragraph 1 or 1a shall be given in respect of capital expenditure incurred by the company in the basis period for the year of assessment 2024.”;

in paragraph 4b, by inserting after the words “paragraph 2”

the words “or 2b”; and

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by inserting after paragraph 4b the following paragraph:

“4c.  Notwithstanding paragraph 4, so much of the allowance or allowances as cannot be given to a person as ascertained under that paragraph which relates to capital expenditure incurred after the end of the period of fifteen consecutive years of assessment referred to in paragraph 2b until the year of assessment 2024—

shall only be given to that person in accordance with paragraph 4 for a period of seven consecutive years of assessment and that period commences immediately following the year of assessment 2024; and

any amount of the allowance or aggregate amount of the allowance at the end of that period which has not been given to that person, by reason of insufficiency or absence of statutory income from his business for that period, shall be disregarded for the purposes of this

Schedule.”.

a disposer under Part II of Schedule 5, the acquirer shall, in relation to disposal within a period of three years after the acquisition date of the chargeable asset, retain the whole of that money or a sum

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not exceeding five per cent of the total value of the consideration, whichever is the less, and whether or not that amount is so retained, the acquirer shall within a period of sixty days after the date of such disposal pay that amount to the Director General;

or

a disposer under Part III of Schedule 5, the acquirer shall retain the whole of that money or a sum not exceeding seven per cent of the total value of the consideration, whichever is the less, and whether or not that amount is so retained, the acquirer shall within sixty days after the date of such disposal pay that amount to the Director General.”.

Amendment of section 32

by inserting after the word “tax” the words “, sums or debt”; and

by substituting for the words “not exceeding five thousand ringgit” the words “not less than two hundred ringgit and not more than twenty thousand ringgit”.

New section 57b

in paragraph 3, by substituting for subsubparagraph 3(1)(b)

the following subsubparagraph:

“(b) (i) the transfer of assets between spouses; or

in subparagraph 33(d), by inserting after the word

“paragraph” the words “34 or”.

Amendment of Schedule 4

relating to the disposal of shares—

A x C

—

B where

A is the number of shares deemed to be a chargeable asset under paragraph 34 or 34a of Schedule 2 disposed;

B is the total number of issued shares deemed to be a chargeable asset in relation to shares deemed to be chargeable asset under paragraph 34 or 34a of Schedule 2;

C is ten thousand;

or ten per cent of the chargeable gain, whichever is greater.”.

Amendment of Schedule 5

in Part I, in the column Rate of tax, by substituting for the words “5 per cent” the word “Nil” appearing in the fourth line; and

in Part II, by substituting for the words “society registered under the Societies Act 1966 [Act 335]” the words

“body of persons registered under any written law in Malaysia”.

no valid notice of appeal against the assessment has been given under section 39 within the time specified by that section;

the assessment has been determined on appeal and there is no right of further appeal; or

a valid notice of appeal against the assessment has been given but the appellant dies before the hearing of the appeal by the High Court is commenced or completed and no personal representative of the estate of the deceased appellant applies to the High Court within two years after his death to proceed with or complete the hearing.

Nothing in subsection (1) shall prejudice the application of section 36b or 50a.”.

Amendment of section 37

in subsection (4), by substituting for the word “If”

the words “Subject to subsection (4a), if”; and

by inserting after subsection (4) the following subsection:

“(4a)  Nothing in this section shall operate to compel the Collector to refund the excess amount of duty which may have been paid in conformity with the erroneous assessment, together with any fine or penalty which may have been paid unless the assessment has become final and conclusive in accordance with section 36d.”.

Amendment of section 57

in paragraph (c), by deleting the word “or” at the end of that paragraph;

in paragraph (d), by substituting for the full stop at the end of that paragraph a semicolon; and

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by inserting after paragraph (d) the following paragraphs:

“(e) to obtain a review of an assessment in a case where section 38a applies; or

to obtain a refund of duty paid in a case where section 57, 58 or 80b, or subsection 21(7), 39(4)

or 80(3) applies.”.

New section 77c

For every RM1,000 or fractional part of

RM1,000 of the value of any shares or stock

RM1.50

For every RM1,000 or fractional part of RM1,000 of the value of any marketable securities

RM1.00”.

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