Amendment Bills 2024, MIRB's Guidelines and MIRB's Response to the Joint Memorandum

The Income Tax (Amendment) Bill 2024 (“ITA Amendment Bill”) and Labuan Business Activity Tax (Amendment) Bill 2024 (“LBATA Amendment Bill”) have been tabled for first reading on 25 March 2024 and passed on 26 March 2024 in the Dewan Rakyat.

The amendments in the abovementioned Bills include amongst others, the following:

It is proposed that the relevant provisions relating to CGT be amended to provide more clarity in terms of the in-scope capital assets, chargeable person who is subject to the CGT under the ambit of Section 15C of the Income Tax Act, 1967 (“Section 15C shares”) and CGT rate on the disposal of Section 15C shares.  The proposals also refined the definition of “share” and the “defined value” for the purpose of determining whether the shares of a controlled company incorporated outside Malaysia are Section 15C shares.  

The proposals are effective on the coming into operation of the Income Tax (Amendment) Act 2024. 

Further to the above, the Malaysian Inland Revenue Board (“MIRB”) has:

• provided its response to the Joint Memorandum by the Professional Bodies on Issues Arising from 2024 Budget Speech and Finance (No. 2) Bill 2023 (“Joint Memorandum”) on 22 March 2024; and
• released its Guidelines on the Tax Treatment on Gains from the Disposal of Capital Assets Received from Outside Malaysia (“Foreign CGT Guidelines”) on 27 March 2024.

In this respect, we have updated our Tax Whiz, in red font, to reflect the amendments proposed in the ITA Amendment Bill as well as the notable points from the MIRB’s response to the Joint Memorandum and the Foreign CGT Guidelines.

Currently, a business that issue consolidated e-invoice is required to issue a printed receipt to buyers.  It is proposed in the ITA Amendment Bill that such receipt may be issued in any manner and not limited to printed form. 

Both ITA Amendment and LBATA Amendment Bills also propose to legislate the requirement for e-Commerce platform providers to issue a self-billed e-Invoice in accordance with the conditions and specifications as determined by the Director General of Inland Revenue.  

The above proposals are deemed to have come into operation on 1 January 2024. 

The ITA Amendment Bill proposes the definition of “revised estimate” to include the revision made in the 11th month with effect from the Year of Assessment (“YA”) 2024.  The proposal allows the 11th month revised ETP to be taken into account when making reference to the latest revision made in the 6th, 9th or 11th month, in determining the minimum ETP amount for the following YA, i.e. not less than 85% of the latest revised ETP for the immediately preceding YA.

Nevertheless, it is advisable to submit the 11th month revision before the submission of initial ETP for the following YA to avoid any administrative hindrance especially if the Company wishes to revise upwards, in order to avoid the breaching the abovementioned 85% threshold condition.

The Bills, MIRB’s Guidelines, MIRB’s response to the Joint Memorandum and the updated Tax Whiz can be accessed via the above links.