Section 2

by substituting for the words "this paragraph applies," in subparagraph (2) the words "subparagraph (1) applies,"; and

by inserting immediately after subparagraph (2), the following new subparagraphs (3), (4) and (5):

"（3）For the avoidance of doubt it is declared that—

any reference in section 108 to a company entitled to deduct tax from dividends includes a company entitled to declare itself a resident of Malaysia under paragraph 3 of Article VII of the Double Taxation Relief (Singapore) Order, 1968; and

any reference in section 108 (8) to repayment of tax includes payment of the Sabah credit, Sarawak credit or West Malaysian credit, as the case may be, which payment shall be deemed to have been made in the year of assessment in which the company became entitled to the credit.

Where any of the provisos to paragraphs 69 (1), 85 (1) and 109 (1) applies to a non-resident company, the payment to a transferee company of the Sabah credit, Sarawak credit or West Malaysian credit, as the case may be, to which the non-resident company would have been entitled but for that proviso, shall not be deemed to be a repayment of tax under section 108 (8).

For the purposes of subparagraph (4), a nonresident company refers to a company which is not resident in the basis year for each of the years of assessment up to and including the year of assessment in the basis year in which the transfer of assets mentioned in the provisos to paragraphs 69 (1), 85 (1) and 109 (1) takes place but does not include a company which is entitled to declare itself a resident of Malaysia under paragraph 3 of Article VII of the Double Taxation Relief (Singapore) Order 1968.".

Made the 21st June 1989.

[Perb. (8.80) 248/40/4-10 (18); PN.

($\mathrm{PU}^{2}$) 80/XIV.]

DAIM ZAINUDDIN Minister of Finance

(To be laid before the Dewan Rakyat pursuant to paragraph 2 (2) of Schedule 9 to the Income Tax Act 1967.)