Friday, 11 November 2016

Malaysia: Group relief for companies clarified

Malaysia’s Inland Revenue Board (IRB) issued a public ruling on 22 August 2016 to explain and clarify the provisions of the Income Tax Act 1967 (ITA) relating to the tax treatment of group relief for companies that are resident and incorporated in Malaysia.

Group relief is available to all locally incorporated resident companies under the ITA. Group relief allows 70% of an adjusted loss (as defined under the ITA) incurred by one company (the surrendering company) in the basis period for a year of assessment (YA) to be surrendered to one or more related companies (the claimant companies) that have a positive defined aggregate income, to reduce the overall tax payable by the group of companies. “Defined aggregate income,” in relation to a YA, is the aggregate income of a claimant company for that year, reduced by deductions for current-year losses, expenditure on prospecting operations, qualifying preoperational business expenditure, approved donations, etc.

Source & more info: Deloitte