FINANCE ACT 2024

Short title

This Act may be cited as the Finance Act 2024.

Gains Tax Act 1976 [Act 169], the Stamp Act 1949 [Act 378], the Petroleum (Income Tax) Act 1967 [Act 543], the Finance

Act 2012 [Act 742] and the Finance (No. 2) Act 2023 [Act 851]

are amended in the manner specified in Chapters II, III, IV, V,

VI and VII respectively.

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Commencement of amendments to the Income Tax Act 1967

The Income Tax Act 1967, which is referred to as the

“principal Act” in this Chapter, is amended in subsection 6(1)—

Schedule 2 to the Real Property Gains Tax Act 1976

prior to 1 January 2024, the date of acquisition of shares of the relevant company shall be deemed to be the date of acquisition of those shares as determined in accordance with subparagraph 34a(2) of Schedule 2

to that Act.”;

“(3)  Where, on the date of acquisition of the shares of the relevant company, the defined value referred to in paragraphs (2)(a), (b) and (c) is less than seventy-five per cent of the value of its total tangible asset and the relevant company subsequently acquires real property or shares of another controlled company, or both, resulting in the defined value of the real property or shares, or both, owned on the date of acquisition by the relevant company being not less than seventy-five per cent of the value of its total tangible asset

(hereinafter referred to as the “subsequent acquisition date”), the shares of the relevant company shall be deemed to be acquired on the subsequent acquisition date.”;

“paragraph 3(a)” the words “subsection (3)”;

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the words “subsequent acquisition date”;

and

“paragraph (3)(b)” the words “subsection (2)”;

“(4a)  Where subsection (2a) applies, the acquisition price of the real property company as determined under subparagraph 34a(3) of Schedule 2 to the

Real Property Gains Tax Act 1976 prior to 1 January 2024

shall be deemed to be the acquisition price of the shares of the relevant company.”; and

the following definition:

‘ “another controlled company” means a controlled company which owns real property situated in Malaysia (including any right or interest thereof) or shares in another controlled company, or owns both, where the defined value of the real property or shares, or both, is not less than seventy-five per cent of the value of its total tangible asset;’; and

the words “in relation to the relevant company or another controlled company,”.

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Amendment of section 34

6. Subsection 34(6) of the principal Act is amended—

“(h) an amount equal to the expenditure incurred by the relevant 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, information and communication technology or maintenance of a building designated as a heritage site by the Commissioner of Heritage under the

National Heritage Act 2005 [Act 645], and where the amount of expenditure is—

Provided that where a deduction has been made under this paragraph, no further deduction of the same amount shall be allowed under subsection 44(6).”; and

“(ha) an amount equal to the expenditure incurred by a company on the provision of infrastructure in relation to its business which is available for public use, and where the amount of expenditure is—

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Provided that where a deduction has been made under this paragraph, no further deduction of the same amount shall be allowed under subsection 44(6).”.

Amendment of section 44

7. Subsection 44(7) of the principal Act is amended in the definition of “organization”, in paragraph (k), by deleting the words “as defined in subsection 46(2)”.

Amendment of section 45a

8. Subsection 45a(1) of the principal Act is amended by substituting for the words “five thousand ringgit” the words

“six thousand ringgit”.

Amendment of section 46

9. Subsection 46(1) of the principal Act is amended—

and

‘ “parents or grandparents” ’; and

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the following subsubparagraph:

“(ca) “complete medical examination”

shall include any vaccination;”;

“six thousand ringgit” the words “seven thousand ringgit”;

“expenses” the words “or payment of fees for disease detection test”; and

“(ii) the purchase of self-testing medical device registered under the Medical

Device Act 2012 [Act 737] (not being used for the purposes of his own business), as evidenced by receipts of the purchase; or”;

“four thousand ringgit” the words “six thousand ringgit”;

“(k) an amount limited to a maximum of eight thousand ringgit deposited for each basis year for the years of assessment 2025, 2026 and 2027 by that individual for his child into the Skim Simpanan

Pendidikan Nasional account established under the

Perbadanan Tabung Pendidikan Tinggi Nasional

Act 1997 [Act 566]:

Provided that—

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Finance year shall be reduced by that withdrawal and regard shall be had only to the reduced amount subject to a maximum amount of eight thousand ringgit;

“until 2027”;

“Provided that for the purposes of this paragraph, “parents” shall be individuals resident in Malaysia; and”; and

“(v) expenses expended in that basis year by that individual—

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charging facility for his own vehicle and not being used for the purposes of his own business for each basis year for the years of assessment 2023, 2024, 2025, 2026

and 2027; or

Provided that—

Substitution of section 46b

10. The principal Act is amended by substituting for section 46b the following section:

“Deduction for individual on interest expended 46b.  (1)  Subject to this section, in the case of an individual who is a citizen and resident for the basis year for the relevant year, there shall be allowed for that relevant

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Finance year personal deduction in respect of interest expended in that basis year by the individual to finance the purchase of a residential property:

Provided that—

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A

X

B

C where

A is the total amount of deduction allowed under subsection (2) for that relevant year;

B is the total interest expended in the basis year for that relevant year by that individual; and

C is the total interest expended in the basis year for that relevant year by all such individuals.

Provided that where paragraph 45(2)(b) applies or where the husband has no total income, any amount expended by the husband shall be deemed to have been expended by the wife who has been allowed a deduction under section 45a.

means a house, condominium unit, apartment or flat which is built as a dwelling house.”.

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Amendment of section 47

11. Paragraph 47(1)(b) of the principal Act is amended by substituting for the words “five thousand ringgit” the words

“six thousand ringgit”.

Amendment of section 48

12. Paragraph 48(2)(b) of the principal Act is amended by substituting for the words “six thousand ringgit” the words

“eight thousand ringgit”.

Amendment of section 49

13. Subsection 49(1b) of the principal Act is amended by substituting for the words “three thousand ringgit” wherever appearing the words “four thousand ringgit”.

Amendment of section 107c

14. Subsection 107c(8) of the principal Act is amended in the proviso by substituting for the words “ninth month” the words

“eleventh month”.

Amendment of section 108

15. Section 108 of the principal Act is amended—

and

the following subsection:

“(2)  Where a dividend is paid, credited or distributed, whether in monetary form or otherwise, by a company to any of its shareholders which is an individual, either through direct shareholding or a nominee, and the dividend is deemed by virtue of section 14

to be derived from Malaysia, the company shall,

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upon paying, crediting or distributing the dividend, furnish the shareholders with a certificate setting forth in respect of the dividend—

Amendment of Schedule 1

16. Schedule 1 to the principal Act is amended by inserting after

Part XXI the following part:

“Part XXII

1.

Notwithstanding Part I, income tax shall be charged upon the income of an individual which consists of dividend paid, credited or distributed, whether in monetary form or otherwise, by a company, and the dividend is deemed by virtue of section 14 to be derived from Malaysia, in excess of one hundred thousand ringgit at the rate of 2 per cent on every ringgit of the chargeable income in respect of such dividend.

2.

In this Part, where the individual has income from a source other than dividend referred to in paragraph 1, the chargeable income of the individual referred to in that paragraph, shall be as prescribed by the Minister.”.

Amendment of Schedule 6

17. Paragraph 12b of Schedule 6 to the principal Act is amended—

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the following subparagraph:

“(2)  Any dividend paid, credited or distributed to an individual, whether in monetary form or otherwise, amounting to one hundred thousand ringgit or less where the company paying such dividend is not entitled to deduct tax under this

Act and any deduction in relation to such dividend shall be disregarded for the purpose of ascertaining the chargeable income of the individual.”.

Chapter III

AMENDMENTS TO THE REAL PROPERTY GAINS

TAX ACT 1976

Commencement of amendments to the Real Property Gains

Tax Act 1976

18. This Chapter comes into operation on 1 January 2025.

Amendment of section 3

19. The Real Property Gains Tax Act 1976, which is referred to as the “principal Act” in this Chapter, is amended in section 3—

“(2a)  For the purposes of this Act, the chargeable gain accruing on the disposal of chargeable asset for a year of assessment shall be—

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Amendment of section 7

20. Subsection 7(4) of the principal Act is amended—

“(a) there is an allowable loss in respect of a disposal, such allowable loss shall only be allowed as a deduction to reduce the chargeable gain of a person in the subsequent disposal of chargeable asset in the same year of assessment in which the disposal was made; and”; and

and

Amendment of section 11

21. Section 11 of the principal Act is amended by substituting for the words “total amount of his chargeable gains” the words

“amount of his chargeable gain accruing on each disposal of chargeable asset”.

Amendment of section 21

22. Section 21 of the principal Act is amended—

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the words “ninety days”; and

and

“(4)  Subject to subsection (3), where any tax due and payable on the service of a notice in accordance with subsection (1) or (2) has not been paid within thirty days after the service of that notice (or within such longer period as may be allowed by the

Director General) or where any tax due and payable under subsection (1a) has not been paid within the period of ninety days from the date of disposal, so much of the tax as is unpaid upon the expiration of the thirty days or that longer period, or upon the expiration of the ninety days, as the case may be, shall, without any further notice being served on him, be increased by a sum equal to ten per cent of the tax so unpaid, and that sum shall be recoverable as if it were tax due and payable under this Act:

Provided that—

Chapter IV

AMENDMENTS TO THE STAMP ACT 1949

Commencement of amendments to the Stamp Act 1949

23. (1) Sections 24, 26 and 27, and section 25 in relation to section 36cb of the Stamp Act 1949 come into operation on 1 January 2025.

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Act 1949 comes into operation on 1 January 2026.

Amendment of section 20a

24. The Stamp Act 1949, which is referred to as the

“principal Act” in this Chapter, is amended in section 20a—

“the same ad valorem duty as a conveyance on sale for the consideration, and with that duty only” the words “ad valorem duty as if it were a conveyance on sale”; and

the following subsection:

“(2)  Notwithstanding subsection (1), where an instrument is chargeable with a duty in respect of an exchange of any real property for any real property or upon the partition or division of any real property, and no consideration is paid or given, or agreed to be paid or given, the instrument shall be chargeable with the duty of ten ringgit only if—

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New sections 36ca and 36cb

25. The principal Act is amended by inserting after section 36c the following sections:

“Assessment and additional assessment in certain cases 36ca.  (1)  The Collector, where it appears to him that no or no sufficient assessment has been made on an instrument chargeable to duty, may in that year or within five years after the date the duty is paid or would have been paid make an assessment or additional assessment, as the case may be, in respect of that instrument in the amount or additional amount of duty payable or in the additional amount of duty in which, according to the best of the Collector’s judgment, the assessment with respect to that instrument ought to have been made.

Minimum amount of duty 36cb.  Notwithstanding any other provision of this Act, an amount of ten ringgit shall be imposed as duty for each instrument where the duty is less than ten ringgit except for cheque and contract note.”.

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Amendment of section 47a

26. Section 47a of the principal Act is amended by substituting for subsection (1) the following subsection:

“(1)  An instrument which is not stamped within the period specified in or under section 40, 43 or 47 may be stamped on payment of the unpaid duty and a penalty of—

Amendment of First Schedule

27. The First Schedule to the principal Act is amended—

Item

Description of Instrument

Proper Stamp Duty

“12

ASSIGNMENT:

See Charge

See Conveyance

RM100,000.00

RM100,000.00 but does not exceed

RM500,000.00

RM10.00

RM100.00

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Item

Description of Instrument

Proper Stamp Duty

RM500,000.00 but does not exceed

RM1,000,000.00

RM1,000,000.00

RM500.00

RM1,000.00

See Conveyance”;

“the conventional hire purchase and Syariah principles”

the words “any Syariah principles or conventional hire purchase”;

Duty”, by inserting after the words “Duty as in (a),”

the words “(aa),”;

Item

Description of

Instrument

Proper Stamp Duty

“(a) Without fine or premium when the average rent and other considerations calculated for a whole year—

For every RM250.00 or part thereof, when the lease is for a period—

Not exceeding one year

Exceeding one year but not exceeding three years

Exceeding three years but not exceeding five years

Exceeding five years or for any indefinite period

RM1.00

RM3.00

RM5.00

RM7.00

and

“Commissioner” the word “Collector”; and

”;

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Item

Description of Instrument

Proper Stamp Duty

“59

POWER OR LETTER OF ATTORNEY:

The same duty as a conveyance on sale

RM10.00

Exemption

For the sole purposes of appointment or authorizing any person to vote as proxy at a meeting of a Company or Association”.

Chapter V

AMENDMENT TO THE PETROLEUM (INCOME TAX)

ACT 1967

Commencement of amendment to the Petroleum (Income Tax)

Act 1967

28. This Chapter comes into operation on the coming into operation of this Act.

Amendment of First Schedule

29. The Petroleum (Income Tax) Act 1967 is amended in paragraph 3a of the First Schedule by substituting for subparagraph (4) the following subparagraph:

“(4)  Any amount deducted under subparagraphs (1) and (2) shall be disregarded for the purpose of ascertaining the adjusted income of the first-mentioned chargeable person.”.

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Chapter VI

AMENDMENT TO THE FINANCE ACT 2012

Commencement of amendment to the Finance Act 2012

30. This Chapter comes into operation on the coming into operation of this Act.

Amendment of section 3

31. The Finance Act 2012 is amended in subsection 3(4)

by substituting for the words “until the year of assessment 2025”

the words “until the year of assessment 2030”.

Chapter VII

AMENDMENT TO THE FINANCE (NO. 2) ACT 2023

Commencement of amendment to the Finance (No. 2) Act 2023

32. This Chapter comes into operation on the same date and in the same manner as section 30 of the Finance (No. 2) Act 2023

comes into operation.

Amendment of section 30

33. Section 30 of the Finance (No. 2) Act 2023 is amended—

Accounting Standard”, by deleting the words

“Malaysia,”;

“(a) an Investment Fund, a Real Estate

Investment Vehicle or an Insurance

Investment Entity;”; and

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the following definition:

‘ “Marketable Transferable Tax Credit”

means a tax credit, other than a Qualified

Refundable Tax Credit, which can be used to reduce liability for a Covered Tax in the jurisdiction that issues the tax credit and the tax credit is transferable—

Transferable Tax Credit, the purchaser, who is unrelated to the originator, may transfer the tax credit to another unrelated purchaser under the same or similar conditions as would apply to the originator at a price that equals or exceeds eighty per cent of the net present value of the tax credit in the

Financial Year in which it purchases the tax credit;’;

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the following subsection:

“(2)  A Parent Entity’s Inclusion Ratio for a Low-Taxed

Constituent Entity for a Financial Year shall be determined in accordance with the following formula:

A

–

B

A where

A is the GloBE Income of the Low-Taxed

Constituent Entity for the Financial

Year; and

B is the amount of such income attributable to Ownership Interests held by other owners.”;

the following subsections:

“(2)  For the purposes of the Domestic

Top-up Tax, the Financial Accounting Net

Income or Loss of a Constituent Entity which is a member of a Multinational Enterprise

Group and located in Malaysia but not being a Permanent Establishment of a Main Entity shall be determined based on the financial statement of the Constituent Entity if—

Multinational Enterprise Group which are located in Malaysia have the same Financial Year as the Ultimate

Parent Entity of the Multinational

Enterprise Group; and

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Malaysia is a Permanent Establishment of a Main Entity, subsection (2) shall apply to the

Constituent Entity if, in addition to meeting the requirements in paragraphs 2(a) and (b), the Main Entity prepares separate financial statements for the Constituent Entity.

“approved company auditor” and “financial statement” have the meanings assigned to them in subsection 2(1) of the Companies

Act 2016.”;

“Qualified Refundable Tax Credits” the words

“and Marketable Transferable Tax Credits”;

“and” at the end of the paragraph;

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the following paragraph:

“(e) any amount of credit of a

Constituent Entity for the Financial

Year in respect of a Marketable

Transferable Tax Credit that is recorded as a reduction to the current tax expense.”; and

Refundable Tax Credit” the words “other than a Qualified Refundable Tax Credit and Marketable Transferable Tax Credit”;

and

the following paragraph:

“(c) any amount of credit or refund for Covered Taxes, except for a Qualified Refundable Tax Credit or Marketable Transferable Tax

Credit, to a Constituent Entity that is not treated as an adjustment to current tax expense in the financial accounts;”;

“adjustment” the words “under subsections (1) to (5)”;

the words “subsections 169(3) and (4) or subsection 181(1)”; and

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“amortisation,” the words “impairment loss”;

“paragraph” the word “section”;

“Transitional relief for the Substance-based Income

Exclusion

197.  (1)  For the purpose of applying subsection 180(4)

to a Financial Year beginning in the calendar year of 2025 and subsequent calendar years until the calendar year of 2032, the amount of payroll carve-out for each Financial Year shall be computed according to the following rate:

Financial Year beginning in the following calendar year

Rate 2025 9.6%

2026 9.4%

2027 9.2%

2028 9.0%

2029 8.2%

2030 7.4%

2031 6.6%

2032 5.8%

to a Financial Year beginning in the calendar year of 2025 and subsequent calendar years until the calendar year of 2032, the amount of tangible asset carve-out for each Financial Year shall be computed according to the following rate:

Financial Year beginning in the following calendar year

Rate 2025 7.6%

2026 7.4%

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Financial Year beginning in the following calendar year

Rate 2027 7.2%

2028 7.0%

2029 6.6%

2030 6.2%

2031 5.8%

2032 5.4%”;

“subsection (2)” the words “subsection (3)”;

“Where” the words “Subject to subsection (6), where”; and

“subsection (7)” the words “subsection (6)”; and

“(b) section 138 shall apply to this Part and the reference to “the income of any person or partnership”

in the definition of “classified material” in subsection 138(5) shall be construed as a reference to “the tax of any Constituent Entity”; and”.