Malaysia legislation
Section 38
Section 38
The Second Schedule to the principal Act is amended—
(a)
by inserting after paragraph 2a the following paragraph:
“2b. For the purposes of paragraph 1, the qualifying expenditure incurred by a chargeable person shall not include any amount paid or to be paid in respect of goods and services tax as input tax by a chargeable person if the chargeable person is liable to be registered under the Goods and Services Tax Act 2014 and has failed to do so, or if the chargeable person is entitled under that Act to credit that amount as input tax.”;
(b)
by inserting after paragraph 40 the following paragraph:
“40a. (1) Notwithstanding any other provisions of this
Schedule, where any part of an asset of a chargeable person from a business ceases to be used for purposes of a business of his in a basis period for a year of assessment due to replacement with a new part and that new part is depreciated separately in accordance with the generally accepted accounting principles, that part of an asset is deemed to have been disposed of in that basis period for that year of assessment.
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(2)
The qualifying expenditure of the part of the asset disposed shall be taken to be the amount determined for the new part being depreciated separately in accordance with the generally accepted accounting principles.
(3)
The residual expenditure under paragraph 46 in respect of the part of the asset disposed shall be the qualifying expenditure of the part of an asset disposed reduced by the amount of allowance that have been made or would have been made under this Schedule to that chargeable person prior to the disposal of that part of the asset.
(4)
The provisions of this Schedule shall apply to the new part of an asset referred to under subparagraphs (1) and (2).”;
and
(c)
by inserting after paragraph 45 the following paragraph:
“45a. (1) Where in the basis period for a year of assessment a chargeable person has incurred qualifying expenditure in relation to an asset and the input tax on the asset is subject to any adjustment made under the Goods and Services Tax Act 2014, the amount of such expenditure in relation to that asset shall be adjusted in the basis period for the year of assessment in which the period of adjustment relating to the asset as provided under the Goods and Services Tax Act 2014 ends.
(2)
In the event the adjustment of the amount of the qualifying expenditure made under subparagraph (1) results in—
(a)
an additional amount, such amount shall be deemed to be part of the qualifying expenditure incurred, and the residual expenditure under paragraph 46 in relation to the asset shall include that additional amount; or
(b)
a reduced amount, the qualifying expenditure incurred and the residual expenditure under paragraph 46 shall be reduced by such amount, and if the amount of the allowance made or ought to have been made under this
Schedule exceeds the residual expenditure, the excess shall be part of the statutory income of that chargeable person from a source consisting of a business in the basis period the adjustment is made.
(3)
The excess amount referred to in subsubparagraph 2(b)
shall not exceed the total amount of allowances given under this
Schedule.
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(4)
Notwithstanding subparagraph (2), where a chargeable person has incurred the qualifying expenditure in relation to an asset, and the asset is disposed of at any time during the period of adjustment specified under the Goods and Services Tax
Act 2014, the adjustment to such expenditure shall be made in the basis period for the year of assessment in which the disposal is made.
(5)
Paragraphs 22 and 23 shall apply for the purpose of the adjustment referred to in subparagraph (4).”.