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8/6/2019 Malaysia Funds Mtg Taxation 2010
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© 2010 KPMG Tax Services Sdn. Bhd., a Malaysia partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All
rights reserved.
MalaysiaTaxation
FUNDS AND FUND MANAGEMENT 2010
3.1 Taxation of funds
Dividend income
Unit trust
For Malaysian taxation purposes, a unit trust (except for approved Real Estate
Investment Trusts (REITs) or Property Trust Funds (PTFs)) is treated as an
investment holding entity.
With effect from the year of assessment 2008, a single tier income tax system
has replaced the imputation system. There are transitional provisions that allow
taxpayers to utilize their existing dividend franking credits up ti ll the end of theyear 2013.
Under the imputation system, a Malaysian resident company is required to
deduct tax at the prevailing corporate tax rate on taxable dividends paid to its
shareholders. This tax is already accounted for through the tax paid by the
company on its taxable profits which is accumulated as dividend franking
credits (Section 108 credits).
When shareholders receive taxable dividends, they are entitled to a tax credit
for the tax already paid by the company in respect of the income. Those credits
are then used to offset the shareholder’s tax liability.
Under the single tier system, profits are only taxed at the company level and
dividends received by shareholders are exempt from tax.
The following types of dividend income are also exempt from tax:
• Tax exempt dividends received from companies enjoying tax incentives (or
which had previously enjoyed tax incentives) which are paid out of exempt
income; or
• Dividend income received from sources outside Malaysia (foreign source)
and remitted to Malaysia (except where the recipient is a resident companycarrying on the business of banking, insurance or sea or air transport).
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© 2010 KPMG Tax Services Sdn. Bhd., a Malaysia partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All
rights reserved.
Closed-end fund companies
Under the single tier system, dividends received from resident companies are
exempt from tax. In addition, tax exempt dividends received from companies
enjoying/previously enjoyed tax incentives which are paid out of exempt
income and foreign-sourced dividends received by closed end fund companies
are also exempt from tax. Where the payer company pays franked dividends
during the transitional period, such dividend income would be subject to tax at
the prevailing corporate tax rate (unless exemption is granted to the closed-end
fund company). The corresponding Section 108 credits attached to the
dividends received may then be used to offset the closed-end fund company’s
tax liability.
Approved unit trust
Income of an approved unit trust would be exempted from tax pursuant to the
Income Tax Exemption (No 12) Order 1985. An approved unit trust is one which
is approved by the Minister of Finance where not less than 90 percent of the
investments are in government securities and the remainder in commercial
papers.
Interest income
Unit trust
Interest income received is assessed and charged to tax (the prevailing rate is
25 percent) unless exemption is granted to the unit trust. The tax rate of 25
percent will also apply to, amongst others, a trust body. However, certain
interest income earned from the following sources is exempt from tax:
• any savings certificates, issued by the government;
• securities or bonds issued or guaranteed by the government;
• debentures or Islamic securities, other than convertible loan stock,
approved by the Securities Commission;
• Islamic securities originating from Malaysia, other than convertible loan
stock issued in any currency other than Ringgit Malaysia and approved by
the Securities Commission or the Labuan Financial Services Authority;
• Bon Simpanan Malaysia issued by Bank Negara Malaysia;
• interest income derived from Malaysia and paid or credited by any bank or
financial institution licensed under the Banking and Financial Institutions
Act 1989 or the Islamic Banking Act 1983; or
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rights reserved.
• bonds and securities issued by Pengurusan Danaharta Nasional Berhad.
Foreign-sourced interest income received by the unit trust in Malaysia is also
exempted from tax.
Closed-end fund companies
Interest income received is subject to the corporate tax rate (the prevailing rate
is 25 percent) unless exemption is granted to the closed-end fund company.
However, interest income received by a listed closed-end fund company from
the following sources is exempt from tax:
• any savings certificates, issued by the government;
• securities or bonds issued or guaranteed by the government;
• debentures or Islamic securities, other than convertible loan stock,
approved by the Securities Commission;
• Islamic securities originating from Malaysia, other than convertible loan
stock issued in any currency other than Ringgit Malaysia and approved by
the Securities Commission or the Labuan Financial Services Authority;
• Bon Simpanan Malaysia issued by Bank Negara Malaysia;
• bonds and securities issued by Pengurusan Danaharta Nasional Berhad.
Foreign-sourced interest income received by the closed-end fund companies in
Malaysia is also exempted from tax.
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© 2010 KPMG Tax Services Sdn. Bhd., a Malaysia partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All
rights reserved.
Approved unit trust
As highlighted in the section regarding dividend income, income (which would
include interest income) received by an approved unit trust would be exempted
from tax pursuant to the Income Tax Exemption (No12) Order 1985.
REITs/PTFs
Interest income received is assessed and charged to tax (the prevailing rate is
25 percent). However, interest income earned by the REIT/PTF from the
following is exempt from tax:
• any savings certificates issued by the government;
• securities or bonds issued or guaranteed by the government;
• debentures or Islamic Sercurities other than convertible loan stock,
approved by the Securities Commission;
• Islamic securities originating from Malaysia, other than convertible loan
stock issued in any currency other than Ringgit Malaysia and approved by
the Securities Commission or the Labuan Financial Services Authority;
• Bon Simpanan Malaysia issued by Bank Negara Malaysia;
• interest income derived from Malaysia and paid or credited by any bank or
financial institution licensed under the Banking and Financial Institutions
Act 1989 or Islamic Banking Act 1983; or
• bonds and securities issued by Pengurusan Danaharta Nasional Berhad.
Foreign-sourced interest income received by the REIT/PTF in Malaysia is also
exempted from tax.
Rental income
Unit trusts and closed–end fund companies
Both unit trusts and closed-end fund companies are taxed on rental income at
the prevailing tax rate of 25 percent unless a specific exemption is granted to
the unit trust and closed-end fund companies. However, as income of an
approved unit trust is exempted from tax under Income Tax Exemption (No 12)
Order 1985, rental income derived by such approved unit trust would be
exempted from tax.
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5 Malaysia – Taxation
© 2010 KPMG Tax Services Sdn. Bhd., a Malaysia partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All
rights reserved.
REITs/PTFs
Pursuant to Section 63C of the Income Tax Act, 1967 (ITA), which is the main
operative section for the tax treatment on REITs/PTFs, any rental income
received by the REIT/PTF would be treated as business income.
Pursuant to Section 61A of the ITA, REITs/PTFs will be exempted from tax on
income provided that at least 90 percent of the total income is distributed to
the investors. Please see the section regarding the distribution of unitholders
below.
Gain from realization of investments
Gains arising from the realization of investments which are capital in nature of a
unit trust, closed-end fund companies, approved unit trusts and REITs/PTFs
may not be subject to tax under the ITA.
Effective from 1 January 2010, where chargeable assets comprising of real
property or shares in a real property company are disposed of after five years
from the date of the acquisition of such chargeable assets, the chargeable
gains arising from the disposal of such chargeable assets will be exempt from
tax. However, where the disposals of such chargeable assets are made within
five years from the date of the acquisition of such chargeable assets, the gains
will be subject to RPGT at an effective rate of 5 percent.
Permitted expenses
Unit trust
Pursuant to Section 63B of the ITA, only a proportionate deduction is given for
permitted expenses. The types of permitted expenses are:
• managers’ remuneration;
• maintenance of a register of unitholders;
• share registration expenses; and
• secretarial, audit, and accounting fees, telephone charges, printing and
stationery costs, and postage.
In the event that a unit trust derives rental income, a special deduction equal to
10 percent of the qualifying plant and machinery expenditure may be allowed.
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© 2010 KPMG Tax Services Sdn. Bhd., a Malaysia partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All
rights reserved.
Closed-end fund companies
A proportionate deduction on permitted expenses similar to that for unit trusts
is extended to closed-end fund companies (Section 60H of the ITA).
REITs/PTFs
Pursuant to the Income Tax (Deduction for Establishment Expenditure of
REIT/PTF) Rules 2006, effective from year of assessment 2006, a tax deduction
is allowed on establishment expenditure incurred by the REIT/PTF in the basis
period for a year of assessment. Establishment expenditure means legal,
valuation, and consultancy fees for the purpose of establishing the REIT/PTF
prior to approval by the Securities Commission.
Where there is insufficient income to utilize the deductible expenses in the
current year, any excess of expenses would not be allowed to be carried
forward. Any unutilized losses of the REIT/PTF in respect of its business of
rental will not be allowed to set off against any other income sources of the
REIT/PTF.
Distribution to unitholders/shareholders
Unit trust
Distributions to unitholders from exempt income are tax exempt in the hands
of the unitholders.
Closed-end fund companies
Distributions of dividends to shareholders from exempt income comprising of
gains from disposal of investments, certain interest income, and foreign-
sourced income of the closed-end fund are tax exempt in the hands of the
shareholders.
Approved unit trust
Dividends received from approved unit trusts by an individual resident in
Malaysia are tax-exempt.
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7 Malaysia – Taxation
© 2010 KPMG Tax Services Sdn. Bhd., a Malaysia partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All
rights reserved.
REITs/PTFs
Pursuant to Sections 6(1)(i), 61A, 109D, and Schedule 1, Part X of the ITA:
• REITs/PTFs will be exempted from tax on all income provided that at least
90 percent of the total income is distributed to the investors;
• Non-corporate investors (such as, resident and non-resident individuals)
that receive distributions from REITs/PTFs out of the above exempt income
will be subject to a final withholding tax at the rate of 10 percent for the
period from 1 January 2009 to 31 December 2011;
• Foreign institutional investors (especially pension funds and collective
investment scheme funds) that receive distributions from REITs/PTFs out
of the above exempt income will be subject to a final withholding tax at the
rate of 10 percent for the period from 1 January 2009 to 31 December
2011;
• Local corporate investors will be subject to the existing tax treatment and
tax rates; and
• Foreign corporate investors that receive distributions from REITs/PTFs out
of the above exempt income will be subject to a final withholding tax at the
rate of 25 percent from the year of assessment 2009 onwards.
Where the 90-percent distribution is not complied with, the total chargeable
income of the REITs/PTFs will be subject to income tax at the prevailing tax
rate. Income of the REIT/PTF, which has been subjected to tax and not
distributed in prior years to unitholders (both resident and non-resident), would
be distributed to unitholders net of tax but with corresponding tax credits. The
tax credits may be set off against the unitholders’ taxable income. No other
withholding tax would be imposed on such income distribution of the REIT/PTF.
Others
• There are registration fees imposed on the registration of a new
prospectus and trust deed.
• There is no capital duty payable on the increase in the maximum unit size
of the fund.
• Pursuant to the Real Property Gains Tax (Exemption) (No 4) Order 2003,
chargeable gains accruing on the disposal of any chargeable assets to a
REIT/PTF which is approved by the Securities Commission, are exempt
from RPGT.
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8 Malaysia – Taxation
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rights reserved.
• There are no Malaysian transfer duties imposed on overseas securities
transferred outside Malaysia. Stamp duty applies on the transfer of
securities affected in Malaysia. For Malaysian securities transacted
overseas, the transaction would only be deemed to take effect if the
documents are properly stamped in Malaysia.
• Pursuant to the Stamp Duty (Exemption) (No 4) Order 2004, all instruments
of transfer of real property to a REIT/PTF approved by the Securities
Commission are exempted from stamp duty. In addition, all instruments of
deed of assignment executed between a REIT/PTF approved by the
Securities Commission and the disposer relating to the purchase of real
property are also exempted from stamp duty under the Stamp Duty
(Exemption) (No. 27) Order 2005.
3.2 Taxation of resident unitholders/investors
Unit trust
A unitholder will be taxed on the amount equivalent to his/her share of the total
taxable income of the unit trust, to the extent that this is distributed to him/her.
A resident individual would be subject to tax in Malaysia at scale rates. The
prevailing scale rates range from 1 percent to 26 percent. A corporate
unitholder would be taxed at the corporate tax rate (the prevailing rate is 25
percent). Corporate unitholders with a paid-up capital of MYR 2.5 million and
below will be subject to a tax rate of 20 percent on chargeable income of up to
MYR 500,000. For chargeable income in excess of MYR 500,000, the prevailing
rate of 25 percent is applicable. With effect from year of assessment 2009,
changes have been effected to limit the applicability of the reduced tax rate
even where a resident company’s paid up ordinary share capital does not
exceed MYR 2.5 million. Amongst other things, the reduced tax rate will not
apply to a resident company with a related company whose share capital is
more than MYR 2.5 million at the beginning of the relevant year of assessment.
The income distribution from the unit trust will carry with it a tax credit in
respect of the tax paid by the unit trust. A unitholder will be entitled to utilizethe tax credit as a set off against the tax chargeable on the income distribution
received by him/her.
However, if the distribution is out of exempt income then such income
received will also be tax exempt in the hands of the unitholder (both individual
and corporate unitholders other than a company carrying on the business of
banking, insurance, shipping, and air transport). A unitholder is not taxed on
distributions out of gains from realization of investments by the fund.
A resident unitholder is not taxed on the undistributed income or gains of the
unit trust
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© 2010 KPMG Tax Services Sdn. Bhd., a Malaysia partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All
rights reserved.
The taxation of gains on disposal of units in a unit trust depends on the status
of the unitholder. A passive investment holder is not subject to income tax on
such gains which are regarded as capital gains.
There are no wealth, gift, or inheritance taxes in Malaysia.
REITs/PTFs
You would note that REITs/PTFs have two forms of distributions, namely that
from income distributed in the same basis period and that from income that
had not been distributed in prior years. The taxation of these two forms of
distribution received by unitholders is outlined below.
Pursuant to Sections 6(1)(i), 61A, 109D and Schedule 1 Part X of the ITA:
Income of the REIT/PTF distributed in the same basis period
Where 90 percent or more of the REIT/PTF’s income is distributed to its
investors, the total income of the REIT/PTF is exempt from tax at the REIT level
pursuant to Section 61A of the ITA.
Non-corporate investors (such as, individual unitholders) would be subject to a
final withholding tax of 10 percent for the period from 1 January 2009 to 31
December 2011 on income received from a REIT/PTF distributed out of the
above exempt income.
Resident corporate unitholders would be subject to corporate tax (the prevailing
rate is 25 percent) on distributions of income from the REIT/PTF to the extent
of an amount equivalent to their share of the total taxable income of the
REIT/PTF. Corporate unitholders with paid-up capital in the form of ordinary
shares of MYR 2.5 million and below will be subject to a tax rate of 20 percent
on chargeable income of up to MYR 500,000. For chargeable income in excess
of MYR 500,000, the prevailing rate of 25 percent is applicable. With effect
from year of assessment 2009, changes have been effected to limit the
applicability of the reduced tax rate even where a resident company’s paid upordinary share capital does not exceed MYR 2.5 million. Amongst other things,
the reduced tax rate will not apply to a resident company with a related
company whose share capital is more than MYR 2.5 million at the beginning of
the relevant year of assessment.
Income of the REIT/PTF which was not distributed in the previous years
Such income would have been subject to income tax at the REIT/PTF level. The
income distribution from the REIT/PTF which has been subjected to tax at
REIT/PTF level would carry with it a tax credit proportionate to each unitholder’s
(both resident and non-resident) share of the total taxable income in respect ofthe tax paid by the REIT/PTF.
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independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All
rights reserved.
Both resident and non-resident unitholders would be entitled to utilize the tax
credit as a set off against the tax payable by them. No other withholding tax
would be imposed on the income distribution of the REIT/PTF.
3.3 Taxation of resident unitholders/investors in a
foreign fund
Foreign-source income (such as, dividend and interest income) received by a
resident company (including closed-end fund companies but excluding
companies involved in the business of banking, , insurance, or sea or air
transport) or a unit trust or a resident individual is exempt from tax. Whether
gains upon the disposal of units in a foreign fund are subject to tax depends on
the status of the resident unitholder that is, whether he/she is regarded as
trading in securities or a passive investor. A trader is taxed on all gains as the
gains are viewed as income gains while for a passive investor, the gains are
capital gains and not subject to Malaysian tax. The onus is on the unitholder to
demonstrate that a gain is capital in nature. However, the resident unitholder
may be exposed to tax in the foreign jurisdiction.
There are no wealth, gift, or inheritance taxes in Malaysia.
3.4 Taxation of non-resident unit holders/investors in
a resident fund
Unit trust
Pursuant to Section 61(1A) of the ITA, a unitholder shall be assessed and
charged to tax on his/her share of the total income of the unit trust distributed
to him/her by way of distributions in the basis year of that year of assessment.
As mentioned in 3.1 above certain distributions are tax exempt.
The unitholder receives the distributions net of tax and the attached tax credit
will be allowed for set off against the tax payable on the income of the
unitholder.
As there is no capital gains tax in Malaysia, gains arising from the disposals of
the units by non-resident unitholders are not charged to tax.
REITs/PTFs
Income of the REIT/PTF distributed in the same basis period
Non-resident individual unitholders would be subject to a final Malaysian
withholding tax of 10 percent for the period from 1 January 2009 to 31
December 2011 on income received from a REIT/PTF.
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rights reserved.
Foreign institutional investors would be subject to a final withholding tax of 10
percent for the period from 1 January 2009 to 31 December 2011 on income
received from a REIT/PTF.
Foreign corporate investors would be subject to a final withholding tax at the
prevailing corporate tax rate of 25 percent on distributions of income from a
REIT/PTF.
Non-resident unitholders may also be subject to tax in their respective
jurisdictions and depending on the provisions of the relevant tax legislation and
any double tax treaties with Malaysia, the Malaysian tax suffered may be
creditable in the foreign tax jurisdictions.
Income of the REIT/PTF which was not distributed in the previous years
In relation to the distribution of income not previously exempted at the
REIT/PTF level, unitholders who are not resident in Malaysia, for tax purposes,
would be subject to Malaysian income tax (the prevailing rate is 25 percent for
companies and 26 percent for non-resident individuals)
Where the income has been subjected to tax at the REIT/PTF level, both
resident and non-resident unitholders would be entitled to utilize the tax credit
as a set off against the tax payable by them. No other withholding tax would be
imposed on the income distribution of the REIT/PTF.
There are no gift taxes, inheritance taxes, or wealth taxes in Malaysia.
Malaysia does not impose taxes on undistributed income or gains at the
unitholders’ level.
Taxation of fund management/custodian companies
Fund management companies and trustees are subject to corporate income tax
(the prevailing rate is 25 percent) as any other resident company in Malaysia.
As such, the basic principles of taxation would apply in assessing the income offund management companies and trustees.
Where a foreign fund management company carries on business in Malaysia of
providing fund management services to foreign and local investors, the income
derived from the provision of fund management services to foreign investors is
treated as a separate and distinct business source from that source of income
derived from the provision of fund management services to local investors.
The chargeable income in relation to the source consisting of the provision of
fund management services to foreign investors is the statutory income from
that source reduced by any unabsorbed losses brought forward relating to that
source. This source of income is subject to a concessionary tax rate of 10
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percent. The source of income derived from the provision of fund management
services to local investors is taxed at the normal corporate tax (the prevailing
rate is 25 percent).
In the basis year for a year of assessment in which the foreign fund
management company is a tax resident, the source of the chargeable income in
relation to the provision of fund management services to foreign investors,
after the deduction of the tax thereon, is credited to a tax exempt account,
which can be used to pay tax exempt dividend.
The Income Tax (Exemption)(No15) Order 2007 exempts from income tax, the
statutory income derived by a resident company from the business of providing
fund management services to foreign investors in Malaysia in respect of anIslamic fund.
3.5 Entitlement to income
A unitholder in a fund is regarded as being in receipt of income only when a
distribution of income is made by the fund to the unitholder.
3.6 Double tax agreements
Malaysia has concluded double taxation agreements with the following
countries.
The number of effective double tax agreements is as follows:
Albania, Republic Mongolia
Argentina (2) Morocco
Australia Myanmar
Austria Namibia
Bahrain Netherlands
Bangladesh New Zealand
Belgium Norway
Bosnia Herzegovina (3) Pakistan
Canada Papua New Guinea
Chile Philippines
China, People’s Republic PolandCroatia Qatar
Czech Republic Romania
Denmark Russia
Egypt Saudi Arabia
Fiji Seychelles
Finland Singapore
France South Africa
Germany Spain
Hungary Sri Lanka
India Sudan
Indonesia Sweden
Ireland Switzerland
Islamic Republic of Iran (4) Syrian Arab Republic
Italy Taiwan (1)
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rights reserved.
Japan Thailand
Jordan TurkeyKazakhstan (3) United Arab Emirates
Korea, Republic United Kingdom
Kuwait United States of America ( 2)
Kyrgyz, Republic Uzbekistan
Lebanese Republic Venezuela
Luxembourg Vietnam
Malta Zimbabwe (3)
Mauritius
Notes
(1) Double tax relief has been given to the Taipei Economic and Cultural Officein Malaysia by way of an exemption order. Malaysia has also signed the
Agreement for the Avoidance of Double Taxation with the Malaysian Friendship
and Trade Centre in Taipei (MFTC).
(2) Limited double tax treaty.
(3) Not effective
Double tax agreements under negotiation:
Brazil Norway (New Agreement)
Canada (New Agreement) PortugalCyprus Russia (New Agreement)
Finland (New Agreement) South Korea (New Agreement)
India (New Agreement) Tunisia
Laos Uruguay
Mexico Ukraine
3.7 Other tax-favored vehicles
Investing via Labuan
The Labuan Financial Services and Securities Act 2010, which was gazetted on
11 February 2010, now governs the licensing and regulation of financial
services and securities in Labuan, the establishment of an exchange and other
matters relating thereto. An enactment entitled Labuan Islamic Financial
Services and Securities Act 2010, also gazetted on 11 February 2010, governs
the licensing and regulation of Islamic financial services and securities in
Labuan and other matters related thereto. These legislation set out the
regulations pertaining to amongst others, the establishment of mutual funds
and fund managers.
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rights reserved.
Tax Regime in Labuan
The Labuan Business Activity Tax Act 1990 stipulates that Labuan companies
involved in trading activities such as banking, insurance, trading, management,
licensing, shipping operations, and any other activity which is not a Labuan non-
trading activity, are given a choice of either paying tax at the rate of 3 percent
on net audited profits or a lump sum of MYR 20,000 for each year of
assessment. Labuan companies are provided with an irrevocable election for
their income from their Labuan business activities to be taxed under the ITA, as
an alternative to the existing option under the Labuan Business Activity Tax Act
1990.
A Labuan company must be one incorporated or registered under the LabuanCompanies Act, 1990. Subject to certain limited exceptions, the activities of
the company must be carried on with non-residents or other offshore
companies and in a currency other than the Malaysian Ringgit.
A Labuan company carrying on a Labuan non-trading activity is not chargeable
to tax. A Labuan non-trading activity means an activity relating to the holding of
investments in securities, stock, shares, loans, deposits, and any other
properties by a Labuan entity on its own behalf.
Where a Labuan company carries on both a Labuan trading activity and a
Labuan non-trading activity it will be deemed to be carrying on a Labuan trading
activity.
Income derived by a Labuan company from an activity which is not a Labuan
business activity will be taxed under the ITA. A Labuan business activity
means a Labuan trading or a Labuan non-trading activity carried on in, from or
through Labuan in a currency other than the Malaysian Ringgit by a Labuan
entity.
3.8 Transfer taxes, stamp duty, and capital duty
Generally, there are no transfer taxes in Malaysia. Additionally, there is also no
capital gains tax presently imposed in Malaysia except for capital gains arising
from the disposal of real properties or shares in real property companies.
A fund would be subject to stamp duty on the purchases and sales of securities
in Malaysia. The stamp duty chargeable on transactions effected via contract
notes on the Bursa Malaysia (the Malaysian Stock Exchange) is at the rate of
MYR 1 for MYR 1,000 or fractional part of the contract value (payable by either
buyer or seller), subject to a maximum of MYR 200 per contract (effective 17
March 2003). Whereas, for stocks not quoted on Bursa Malaysia, the stamp
duty payable will be based on 0.3 percent of the value of the securities involved
and this is normally borne by the acquirer. The basis for determining the value
of those shares is as set out below:
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• For cases where the sale of shares requires the approval of the Securities
Commission, the price/value per share as approved by Securities
Commission may be accepted for the purpose of valuation of such shares.
A copy of the letter from the Securities Commission must be submitted as
evidence;
• For cases of companies incurring losses, the par value or net tangible
assets (NTA) or sale consideration whichever is the highest is to be used
for the purpose of computation of the stamp duty payable. The formula for
computing the value per share based on NTA is as follows:
NTA per share = Total Assets-Total Liabilities
Issued Share Capital
• For cases other than those mentioned above, a comparison is to be made
between NTA, price earning multiple/price earning ratio (PER), and sale
consideration, whichever is the highest.
The tax implications on the purchase or sale of securities by a fund outside
Malaysia would depend on the tax system of each country in which the
securities are being traded.
Capital duties
There are no capital duties payable on the increase in the maximum unit size of
the fund. In the case of a closed-end fund company which is governed by the
Companies Act, the increase in authorized share capital would not attract
additional capital duties. This is due to the fact that it would have already
incurred the maximum capital duties payable of MYR 70,000 as a closed-end
fund company is required to have a minimum issued and paid up capital of
MYR 100 million (which attracts the maximum rate of duties) upon its
incorporation.
3.9 Miscellaneous
None
KPMG in Malaysia
Nicholas A. Crist
KPMG Tax Services Sdn Bhd
KPMG Level 10, KPMG Tower, 8, First Avenue, Bandar Utama
Petaling Jaya
47800
Malaysia
Tel. +603 7721 3388
Fax +603 7721 7288e-Mail: [email protected]
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© 2010 KPMG Tax Services Sdn. Bhd., a Malaysia partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All
rights reserved.
The information contained herein is of a general nature and is not intended to
address the circumstances of any particular individual or entity. Although we
endeavor to provide accurate and timely information, there can be no guarantee
that such information is accurate as of the date it is received or that it will
continue to be accurate in the future. No one should act upon such information
without appropriate professional advice after a thorough examination of the
particular situation.