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REAL PROPERTY GAINS TAX ACT 1976

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1 PART I PRELIMINARY-1. Short title and commencement.

This Act may be cited as the Real Property Gains Tax Act 1976 , and shall be deemed to have come into force on 7 November 1975.


2 PART I PRELIMINARY-2. Interpretation.

(1) In this Act, unless the context otherwise requires:

  "accountant"  means an accountant as defined in subsection 153(3) of the Income Tax Act 1967 [Act 53] ;

"acquire" includes, subject to subsection (4), acquire by way of purchase, grant, exchange, gift, settlement or otherwise;

  "allowable loss"  has the meaning assigned by section 7;

  "assessment"  means any assessment or additional assessment made under this Act;

"asset" includes an interest or right in or over an asset;

  "authorized officer"  means an officer appointed or authorized under section 45 to exercise any function of the Director General or to exercise or assist in exercising any such function;

  "body of persons"  me

Legal Comments on the Real Property Gains Tax Act 1976, Section 2

Introduction

  • The Real Property Gains Tax Act 1976 (RPGTA) was enacted in Malaysia to impose a tax on gains derived from the disposal of real property, aiming to curb speculative activities in the real estate market and stabilize property prices [Source: ].
  • Section 2 of the RPGTA deals with the interpretation and application of the Act, including the recovery of tax due and the powers of the Director General [Source: ].

What Section 2 Says

  • Section 2(1) of the RPGTA provides for the recovery of tax due and payable by the Government through civil proceedings as a debt due to the Government [Source: ].
  • Section 2 also outlines the powers and functions of the Director General, including the authority to give directions and delegate functions [Source: ].
  • The section specifies that the tax shall be charged on every ringgit of the total amount of chargeable gains accruing to a chargeable person in a year of assessment [Source: ].

Essential Ingredients

  • The essential ingredients for the imposition of RPGT under Section 2 include:
    • The disposal of a chargeable asset (real property) [Source: ].
    • The accrual of chargeable gains from such disposal [Source: ].
    • The identification of a chargeable person, which includes every person whether resident or non-resident [Source: ].
  • The Act also specifies the rate of tax and the procedures for assessment and collection [Source: ].

Scope of Section

  • The scope of Section 2 extends to the imposition, assessment, and collection of the Real Property Gains Tax on gains derived from the disposal of real property situated in Malaysia [Source: ].
  • It covers various types of real property, including houses, commercial buildings, farms, and vacant land [Source: ].
  • The section also deals with the powers of the Director General and the procedures for recovery of tax due [Source: ].

Punishment for Section

  • Under the RPGTA, penalties for non-compliance include:
    • Failure to file CKHT 2A: Upon conviction under subsection 29(1), a fine not exceeding RM5,000 or imprisonment not exceeding 12 months, or both [Source: ].
    • Penalties for incorrect returns or failure to submit required documents may also be imposed [Source: ].

Legal Comments

3 PART II IMPOSITION OF THE TAX-3. Taxation of chargeable gains.

(1) A tax, to be called real property gains tax, shall be charged in accordance with this Act in respect of chargeable gain accruing on the disposal of any real property (hereinafter referred to as "chargeable asset").

(2) Subject to this Act, the tax shall be charged on every ringgit of the total amount of chargeable gains accruing to a chargeable person in a year of assessment in respect of each category of disposal of chargeable assets specified in Schedule 5.


Legal Commentary on Section 3 of the REAL PROPERTY GAINS TAX ACT 1976

Introduction

Section 3 of the Real Property Gains Tax Act 1976 (RPGTA 1976) primarily deals with the imposition and collection of tax on gains derived from the disposal of real property. It establishes the legal framework for determining the taxable event, the basis of calculation, and the penalties for non-compliance. As Malaysia's legislative measure to curb speculative activities in real estate, it is crucial for understanding the scope of gains tax and associated penalties.

What does Section 3 Say

Section 3 of RPGTA 1976 specifies that any gain arising from the disposal of a chargeable asset (i.e., real property or shares in a real property company) shall be liable to tax at the rates prescribed in the Act. It also authorizes the Director General to assess the tax, issue notices of assessment, and impose penalties for non-compliance, including penalties up to 10% of the tax payable.

Essential Ingredients

  • Chargeable Asset: Disposals of real property or shares in real property companies.
  • Timing of Disposal: Date when the property is deemed disposed, as per the Act.
  • Tax Rate: The prescribed rate, which may vary depending on the duration of ownership.
  • Assessment: The authority of the Director General to assess and impose tax.
  • Penalties: Penalties for late payment or non-disclosure, typically up to 10% of the tax due.
  • Declaration and Submission: Obligation for disposers and acquirers to submit relevant forms within stipulated timeframes.

Scope of Section

Section 3 applies to:- All individuals, companies, and entities disposing of chargeable assets in Malaysia.- Disposals occurring within the statutory period (generally within 60 days from the date of transfer).- All types of real property, including land, buildings, and shares in real property companies.- Both residents and non-residents, subject to specific provisions.

It sets the foundation for subsequent provisions related to valuation, penalties, and exemptions under the RPGTA 1976.

Punishment for Section

  • Penalties: A penalty of 10% of the tax payable can be imposed for late payment or failure to declare gains accurately.
  • Legal Action: The Act authorizes the Inland Revenue Board to initiate proceedings, including prosecution for evasion or non-compliance.
  • Assessment Penalties: Additional penalties can be imposed if the disposal is undervalued or not reported within the deadline.
  • Interest: Penalties may include interest on overdue taxes.

Legal Comments

  • "Scope of Tax" - Section 3 extends the scope of gains tax to all disposals of chargeable assets, ensuring comprehensive coverage of real estate transactions [RPGTA 1976].
  • "Assessment Authority" - The Director General has the authority to assess and impose penalties, which centralizes tax collection and enforcement [RPGTA 1976].
  • "Penalties" - Penalty provisions up to 10% serve as deterrents against non-compliance and under-reporting [RPGTA 1976].
  • "Disposal within 60 days" - The obligation to file returns within 60 days from disposal emphasizes timely compliance [RPGTA 1976].
  • "Penalty for Understatement" - The penalty applies when the disposal price is under-declared, supporting the integrity of the tax system [RPGTA 1976].
  • "Assessment Process" - The assessment process involves issuance of notices, which must be duly served; failure to do so can invalidate proceedings [RPGTA 1976].
  • "Penalties on Disposers and Acquirers" - Both parties are liable for penalties if they fail to submit required forms or under-declare gains [RPGTA 1976].
  • "Legal Basis for Penalties" - The penalties are explicitly provided under Sections 29(3), 30(2), and 14(5), reinforcing legal enforceability [RPGTA 1976].
  • "Penalty Amount" - Penalty is generally 10% of the tax due, which aligns with general penalty provisions under Malaysian tax law [RPGTA 1976].
  • "Assessment and Penalty Enforcement" - The Inland Revenue Board has the authority to enforce penalties and assess additional taxes, ensuring compliance [RPGTA 1976].
  • "Penalties for Non-Compliance" - Non-filing or late filing attracts penalties, which can be substantial, emphasizing the importance of compliance [RPGTA 1976].
  • "Legal Consequences of Non-Payment" - Non-payment can lead to legal proceedings, including prosecution, under the Act [RPGTA 1976].
  • "Assessment of Gains" - Gains are assessed based on the disposal price minus allowable costs, with penalties applicable for evasion [RPGTA 1976].
  • "Assessment Notices" - Proper serving of assessment notices is essential; invalid notices can be challenged in court [RPGTA 1976].
  • "Penalty Abatement" - The Director General has the discretion to abate or remit penalties, providing flexibility for genuine cases [RPGTA 1976].
  • "Legal Framework" - Section 3, in conjunction with other sections, provides a comprehensive legal framework for gains tax enforcement [RPGTA 1976].

In summary, Section 3 of the RPGTA 1976 establishes the legal basis for taxing gains from disposal of real property, authorizes assessment and penalties, and delineates the scope of application. The penalties, primarily 10% of the tax due, serve as a deterrent against evasion and non-compliance, with enforcement powers vested in the Inland Revenue Board. The section's provisions are reinforced by detailed rules and related sections, forming a robust legal framework for real property gains taxation in Malaysia.

**- Real Property Gains Tax Act 1976, Section 3- RPGTA 1976 – Penalty provisions and assessment procedures- Updated RPGT Guidelines 2023- Malaysian tax law literature and legal commentaries

4 PART II IMPOSITION OF THE TAX-4. Rate of tax.

(1) The tax shall be charged at the appropriate rate specified in Schedule 5 in respect of each category of disposal stated therein.

(2) The Minister, where he is satisfied that it is the intention of the Government to promote the introduction of a Bill to vary in any particular way the rate of tax, may by statutory order declare the rate to be varied in that way, and, where he does so, then, subject to subsections (3) and (4), this Act shall have effect as if the rate as so varied had come into force at the beginning of the first year of assessment for which the Bill seeks to vary that rate.

(3) Every order made under subsection (2) shall be laid before the Dewan Rakyat as soon as may be after it has been made and shall cease to have effect:

(a) at the expiration of three months (or such longer period as may be specified by resolution of the Dewan Rakyat) beginning on the date when the order was made; or

5 PART II IMPOSITION OF THE TAX-5. Situation of interests, options, etc .

(1) The situation of interests, options and other rights in or over land is that of the land.

(2) The term "rights in or over" includes rights to purchase.


6 PART II IMPOSITION OF THE TAX-6. Chargeable persons.

(1) Subject to this Act, every person whether or not resident in Malaysia for a year of assessment shall be chargeable with the tax in respect of a chargeable gain accruing to him in that year on the disposal of any chargeable asset.

(2) The supplementary provisions in Schedule 1 shall have effect with respect to persons chargeable with the tax.


7 PART II IMPOSITION OF THE TAX-7. Chargeable gains and allowable losses.

(1) Where a chargeable asset is disposed of, then:

(a) if the disposal price exceeds the acquisition price, there is a chargeable gain;

(b) if the disposal price is less than the acquisition price,

there is an allowable loss; and

(c) if the disposal price is equal to the acquisition price, there is neither a chargeable gain nor an allowable loss.

(2) In this section, an allowable loss means a loss suffered on the disposal of a chargeable asset which, if it had been a gain, would have been chargeable with the tax.

(3) Subsection (1) shall be subject in its operation to Schedule 2, which shall have effect for computing acquisition and disposal prices and otherwise as provided therein.

(4) Where:

(a) there is an allowable loss in respect of a disposal, such allowable loss shall be allowed as a deduction to reduce the

8 PART II IMPOSITION OF THE TAX-8. Private residence.

Subject to Schedule 3, a gain shall be exempt from the tax if it accrues to an individual who is a citizen or an individual who is not a citizen but is a permanent resident in respect of the disposal by him of his private residence.

[Am. Act 241:s.23]


9 PART II IMPOSITION OF THE TAX-9. Exemptions.

(1) Notwithstanding any other provision of this Act, the gains specified in Schedule 4 shall be exempt from the tax.

(2) The Dewan Rakyat may by resolution delete any item in Schedule 4 or add any further item or items thereto.

(3) The Minister may by statutory order exempt anyclass of persons from all or any of the provisions of this Act.

[Am. by Act 644]

(3A) The Minister may in any particular case exempt any person from all or any of the provision of this Act, either generally or in respect of any income of a particular kind or any class of income of a particular kind.

[Ins. by Act 644]

(4) Any order made under subsection (3) shall be laid before the Dewan Rakyat.


10 PART III ASSESSMENT AND COLLECTION-10. Year of assessment.

The first year of assessment shall be a period beginning on 7th November, 1975 and ending on 31st December, 1976 and thereafter the year of assessment shall be the calendar year starting with the calendar year 1977.


11 PART III ASSESSMENT AND COLLECTION-11. Chargeable person to be assessed on chargeable gains.

A chargeable person shall be assessed for any year of assessment in respect of the total amount of his chargeable gains as acertained under section 3(2) in that year.


12 PART III ASSESSMENT AND COLLECTION-12. [Deleted by Act 323: s.30] .


13 PART III ASSESSMENT AND COLLECTION-13. Returns.

(1) Every chargeable person who disposes of a chargeable asset and every person who acquires the asset so disposed of shall, within sixty days (or such further period as the Director General may allow on a written request being made to him) of the date of disposal of that asset, make a return:

[Am. by Act 702]

(a) specifying in respect of the asset disposed of the acquisition price, the disposal price and the gain or loss on the disposal;

(b) furnishing all information necessary to determine the acquisition price and disposal price of the asset disposed of; and

(c) where the market value of the asset is to be taken for the purposes of this Act, submit a written valuation of the asset by a valuer.

(2) Every nominee shall, within sixty days (or such further period as the Director General may allow on a written request being made to him) of

14 PART III ASSESSMENT AND COLLECTION-14. Assessments.

(1) Where a person makes a return under section 13 (1), the Director General may:

(a) accept the return and make an assessment accordingly;

(b) make an assessment after making such adjustments as he considers necessary; or

(c) reduce an assessment made for the year of assessment for which the return was made, in giving effect to section 7(4) (a) .

[Am. Act 323:s32]

(2) Where a person does not make a return under section 13(1), the Director General, if he is of the opinion that that person is chargeable with the tax, may make an assessment accordingly:

Provided that the making of an assessment in respect of a person under this subsection shall not affect any liability otherwise incurred by that person by reason of his failure to make the return.

(3) The Director General, where it appears to him desirable, either bec

15 PART III ASSESSMENT AND COLLECTION-15. Additional assessments.

(1) The Director General, where in respect of any year of assessment it appears to him that no or no sufficient assessment has been made on a person chargeable with the tax, may within five years after the end of that year of assessment make on that person whatever assessment or additional assessment he considers to be appropriate.

[(1) Am. by Act 755 of the year 2013]

(2) The Director General, where it appears to him that a person chargeable with the tax has been guilty of any form of fraud or wilful default in connection with or in relation to the tax, may at any time make an assessment in respect of that person for the purpose of making good any loss of the tax attributable to the fraud or wilful default.

(3) Where in a year of assessment:

(a) any assessment made under this Act or the Income Tax Act 1967 in respect of a person for any year of assessment has been determined

16 PART III ASSESSMENT AND COLLECTION-16. Cases where acquirer may be assessed.

(1) Where in a case to which section 13 applies:

(a) the consideration on the disposal of a chargeable asset consists of another asset (whether chargeable or not);

(b) there is a failure by both the disposer and the acquirer to submit a return to the Director General in the prescribed form as required under section 13; or

(c) the consideration on the disposal of a chargeable asset is for the purposes of the Act the market value of the asset,

the Director General may make on the acquirer an assessment of an amount equal to the amount of the tax payable by the disposer.

[Subs. Act 702:s.23; Am. Act 476:s.23]

(1A) Where the Director General makes an assessment on the acquirer under subsection (1) (b) there shall be included in that assessment a sum equal to ten per cent of the tax payable by the disposer, which shall be deem

17 PART III ASSESSMENT AND COLLECTION-17. Notice of assessment.

The Director General shall cause to be served on every person assessed a notice of assessment indicating:

[Am. Act 323:s.34]

(a) the year of assessment to which the assessment relates;

(b) the chargeable gains and allowable losses taken into account in making the assessment;

(c) (i) the amount of the chargeable gains on which the tax has been assessed;

[(c) Am. Act 476:s.24]

(ii) the amount of the tax assessed;

(iii) the amount of allowable losses allowed;

[Am. by Act 702]

(iv) the amount of the tax payable; and

(v) the place at which and the time within which payment is to be made; and

(d) the existence of the right of appeal conferred by section 18.

(2) (Deleted by Act 323:s.34)


18 PART III ASSESSMENT AND COLLECTION-18. Right of appeal.

(1) A person aggrieved by an assessment made on him may appeal to the Special Commissioners against the assessment in the same manner as an appeal against an assessment of income tax made under the Income Tax Act 1967, and the provisions of sections 99, 100, 101, 101(1A), 101(1B), 101(1C) and 102 of that Act, as far as they are applicable and with the necessary modifications, shall apply to an appeal against an assessment made under this Act as if:

[(1) Am. Act 608:s.39]

(a) every reference in those sections to income tax or to tax were a reference to real property gains tax; and

(b) every reference in those sections to income were a reference to chargeable gains.

(2) The provisions of Schedule 5 to the Income Tax Act, 1967, shall apply with necessary modifications to the hearing of appeals to the Special Commissioners and to the hearing of further appea

19 PART III ASSESSMENT AND COLLECTION-19. Error or mistake.

(1) A person upon whom a notice of assessment is served may within five years after the end of the year of assessment in which the assessment was made apply in writing to the Director General for a revision of the assessment on the ground that the assessment is excessive by reason of an error or mistake in a return or other statement made by that person for the purposes of the assessment.

[(1) Am. by Act 755:s60]

(2) No relief shall be given under subsection (1) in respect of an error or mistake as to the basis on which the liability of the person concerned ought to have been computed where the return containing the error or mistake was in fact made on the basis of or in accordance with the practice of the Director General generally prevailing at the time when the return was made.

(3) An application under subsection (1) shall be, as nearly as may be, in the same form as a notice of appeal under section 18

20 PART III ASSESSMENT AND COLLECTION-20. Finality of assessment.

(1) Subject to this section, an assessment shall become final and conclusive for all the purposes of this Act as regards the amount of the tax assessed under it or the allowable losses indicated in it, as the case may be:

[Am. by Act 702]

(a) on the expiry of the time for appeal against the assessment; or

(b) where an appeal is made, on the appeal being finally disposed of.

(2) Subsection (1):

(a) shall not apply to an assessment made under section 14(3) until it is adopted as the assessment for the year of assessment to which it relates;

(b) shall not prevent the Director General from making in respect of any year of assessment:

(i) an assessment under section 15(1) or (2); or

(ii) a revision under section 19(1).


21 PART III ASSESSMENT AND COLLECTION-21. Payment of the tax.

(1) Subject to this section, the tax payable under an assessment shall, on the service of the notice of assessment on the person assessed, be due and payable at the place shifted in that notice whether or not that person appeals against the assessment.

(2) Where the tax payable under an assessment is increased on appeal the additional tax payable by virtue of the increased assessment shall, on the service of the notice of the increased assessment on the person assessed, be due and payable at the place specified in that notice.

(3) Where any tax is payable in accordance with subsection (1) or (2) the Director General may allow the tax to be paid by instalments in such amounts and on such dates as he may determine.

(4) Subject to subsection (3), where any tax due and payable on the service of a notice in accordance with subsection (1) or (2) has not been paid within thirty days after the service of that notice (or within such long

21A PART III ASSESSMENT AND COLLECTION-21A. Certificate of non-chargeability.

The Director General shall send a certificate of non-chargeability to the disposer in the prescribed form where he is satisfied that no chargeable gain has arisen.

[21A. Ins. Act 323:s.35; 21A. Subs. Act 702:s.45]


21B PART III ASSESSMENT AND COLLECTION-21B. Duty of acquirer to retain and pay part of the consideration.

(1) Subject to subsection (1A), where on a disposal to which section 13 applies, the consideration consists wholly or partly of money, the acquirer shall retain the whole of that money or a sum not exceeding three per cent of the total value of the consideration whichever is the less, and (whether or not that amount is so retained) he shall within sixty days after the date of such disposal pay that amount to the Director General:

[(1) Am. Act 764:s.28; Am. Act 801:s.16]

Provided that the Director General may under special circumstances allow extension of time for that amount to be paid over.

(1A) For the purposes of subsection (1), where the disposer in a disposal referred to in that subsection is:

(a) a disposer under Part II of Schedule 5, the acquirer shall, in relation to disposal within a period of three years after the acquisition date of the chargeable asset, retain the

21C PART III ASSESSMENT AND COLLECTION-21C. Tax payable notwithstanding institution of proceedings under any other written law.

The institution of any proceedings under any other written law against the Government or the Director General shall not relieve any person from liability to pay any tax, debt or other sum for which he is liable to pay under this Part.

[21C. Ins. Act 831:s.35]


22 PART III ASSESSMENT AND COLLECTION-22. Recovery from persons leaving Malaya.

(1) The Director General, where he is of the opinion that any person is about or likely to leave Malaysia without paying:

(a) all the tax payable by him (whether or not due or due and payable);

(b) all sums payable by him under section 21(4); and

(c) the debt payable by him under subsection 21B(2);

[Ins. by Act 702]

may issue to any Commissioner of Police or Director of Immigration a certificate containing particulars of the tax, sums so payable and debt so payable with a request for that person to be prevented from leaving Malaysia unless and until he pays all the tax and sums so payable or furnishes security to the satisfaction of the Director General for their payment.

[Am. by Act 702]

(1A) The certificate referred to in subsection (1) may be issued to any Commissioner of Police or Director of Im

23 PART III ASSESSMENT AND COLLECTION-23. Recovery by suit.

(1) Tax due and payable may be recovered by the Government by civil proceedings as a debt due to the Government.

(2) The Director General and all authorized officers shall be deemed to be public officers authorized by the Minister under subsection 25(1) of the Government Proceedings Act 1956 [Act 359] , in respect of all proceedings under this section.

(3) In any proceedings under this section the court shall not entertain any plea that the amount of tax sought to be recovered is excessive, incorrectly assessed, under appeal or incorrectly increased under subsection 21(4).


24 PART III ASSESSMENT AND COLLECTION-24. Refund of overpayments.

(1) Subject to this section, where it is proved to the satisfaction of the Director General that any person has paid tax for any year of assessment in excess of the amount payable under this Act, that person shall be entitled to have the excess refunded by the Government.

(2) Where in a case of the kind mentioned in subsection (1) the excess has been paid by the acquirer of a chargeable asset in pursuance of an assessment made on him under section 16(1), the excess:

[Am. by Act 702]

(a) shall not be refunded to the acquirer unless he satisfies the Director General that he has not under section 16(3) recovered it from the disposer;

(b) shall be refunded to the disposer if he satisfies the Director General that the acquirer has under section 16(3) recovered it from him;

(c) shall be retained by the Government if the Director General is not so satisfied.

24A PART III ASSESSMENT AND COLLECTION-24A. Fund for Tax Refund.

(1) There shall be paid from time to time into the Fund established under section 111B of the Income Tax Act 1967 such amount of tax collected under this Act as may be authorized by the Minister.

(2) The money of the Fund referred to in subsection (1), shall be applied for the making of a refund of an amount of tax paid in excess of the amount payable as ascertained in section 24.

(3) Section 14A of the Financial Procedure Act 1957 shall not apply to any refund in excess of the amount payable as ascertained in section 24.

[Ins. by Act 644]


25 PART III ASSESSMENT AND COLLECTION-25. Anti-avoidance provisions.

(1) Where a chargeable asset which is disposed of was previously acquired by the disposer for a consideration wholly or substantially provided by a connected person within the meaning of Schedule 2 (otherwise than as a bona fide ) loan made in the course of carrying on business as a moneylender), the asset shall be deemed to have been disposed of by that person and not by the disposer:

Provided that, where the asset disposed of was acquired by the disposer from that person, that person shall, for the purpose of computing any gain accruing to or loss suffered by him by the operation of this subsection, be deemed to have acquired the asset at an acquisition price equal to the consideration which, by virtue of paragraphs 9 and 23(1) of Schedule 2, he is deemed to have received when the asset was acquired by the disposer.

(2) The Director General, where he has reason to believe that any transaction has the direct or indirect effect

26 PART III ASSESSMENT AND COLLECTION-26. Remission.

(1) The tax paid or payable by any person may be remitted, wholly or in part:

(a) on grounds of poverty, by the Director General;

(b) on grounds of undue hardship or justice and equity, by the Minister.

(2) Where a person granted remission under subsection (1) has paid any of the tax to which the remission relates, he shall be entitled to have the amount which he has paid, refunded to him as if it were an overpayment to which section 24 applies.


27 PART IV INVESTIGATORY AND PENAL-27. Power to call for Information, etc.

(1) The Director General may by notice in writing require any person to furnish within fourteen days or such further period as may be specified in the notice any information respecting any matter as to which a return under this Act has been made or is required to be made:

[(1) Am. Act 323:s.37]

Provided that, where that person is a public officer or an officer in the employment of a local authority or other public body, he shall not be obliged to disclose any particulars as to which he is under a statutory obligation to observe secrecy.

(2) For the purpose of obtaining full information as to any person's liability to the tax, the Director General may require that or any other person by notice in writing:

(a) to complete and deliver to the Director General within a time specified in the notice (not being less than fourteen days from the date of service of the notice) any return

28 PART IV INVESTIGATORY AND PENAL-28. Power of access to buildings and documents. etc.

(1) For the purposes of this Act the Director General shall at all times have full and free access to all lands, buildings and other places and to all books and other documents and may search such lands, buildings and places and may inspect, copy or make extracts from any such books or documents without making any payment by way of fee or reward.

(2) The Director General may take possession of any books or documents to which he has access under subsection (1) where in his opinion:

(a) the inspection of them, the copying of them or the making of extracts from them cannot reasonably be undertaken without taking possession of them; or

(b) they may be interfered with or destroyed unless he takes possession of them; or

(c) they may be needed as evidence in any legal proceedings instituted under or in connection with this Act.

(3) Where in the opinion of the Directo

29 PART IV INVESTIGATORY AND PENAL-29. Failure to notify or make return of disposal.

(1) Any person who, without reasonable excuse, fails to make a return required by section 13(1) or fails to make a declaration under section 13(5), shall be guilty of an offence and on conviction shall be liable to a fine not exceeding five thousand ringgit or to imprisonment for a term not exceeding twelve months or to both.

(2) In any prosecution under subsection (1) the burden of proving that a return has been made or a notification given or a declaration made shall be upon the accused person.

(3) Where in relation to a year of assessment a person fails to make a return required by section 13 (1) or fails to make a declaration under section 13(5) and no prosecution under subsection (1) has been instituted in relation to that failure:

(a) the Director General may require that person to pay a penalty equal to treble the amount of the tax which is payable for that year; and

(b) if that pers

30 PART IV INVESTIGATORY AND PENAL-30. Incorrect returns, etc .

(1) Any person who:

(a) makes an incorrect return on behalf of himself or another person by omitting any particulars required by this Act relating to any disposal of chargeable assets, understating any chargeable gains or overstating any allowable loss; or

(b) gives any other incorrect information in relation to any other matter affecting his own or any other person's liability to the tax,

shall, unless he satisfies the court that the incorrect return or other incorrect information was made or given in good faith, be guilty of an offence and on conviction shall be liable to a fine not exceeding five thousand ringgit, and shall pay a special penalty of double the amount of the tax which has been undercharged in consequence of the incorrect return or other information or which would have been undercharged if the return or information had been accepted as correct.

(2) Where a per

31 PART IV INVESTIGATORY AND PENAL-31. Wilful evasion.

(1) Any person who wilfully and with intent to evade or assist any other person to evade the tax:

(a) omits from a return under this Act any particulars required under this Act relating to any disposal of a chargeable asset; or

(b) makes a false statement or entry in a return made under this Act; or

(c) gives a false answer (orally or in writing) to a question asked or request for information made under this Act; or

(d) prepares or maintains or authorises the preparation or maintenance of any false books of account or other false records; or

(e) falsifies or authorises the falsification of any books of account or other records; or

(f) produces or allows or authorises the production of, books of accounts which he knows to be false; or

(g) makes use or authorises the use of any fraud, art or contrivance; or

(h)

32 PART IV INVESTIGATORY AND PENAL-32. Leaving Malaysia without payment of tax.

(1) Any person who, knowing that a certificate has been issued in respect of him under section 22, voluntarily leaves or attempts to leave Malaysia without paying all the tax, sums or debt payable by him or furnishing security to the satisfaction of the Director General for its payment shall be guilty of an offence and on conviction shall be liable to imprisonment for a term not exceeding two years or to a fine not less than two hundred ringgit and not more than twenty thousand ringgit or to both.

[(1) Am. Act 833:s.31]

(2) A police officer or immigration officer may arrest without warrant any person whom he reasonably suspects to be committing or about to commit an offence under this section.


33 PART IV INVESTIGATORY AND PENAL-33. Obstruction of officers.

Any person who:

(a) obstructs or refuses to permit the entry of the Director General or an authorised officer into any land, building or place in pursuance of section 28; or

(b) obstructs the Director General or an authorised officer in the exercise of his functions under this Act; or

(c) refuses to produce any books or other documents in his custody or under his control on being required to do so by the Director General or an authorised officer for the purposes of this Act; or

(d) fails to give reasonable assistance to the Director General or an authorised officer for any of those purposes; or

(e) refuses to answer any question relating to any of those purposes lawfully asked of him by the Director General or an authorised officer,

shall be guilty of an offence and on conviction shall be liable to a fine not exceeding five thousand r

34 PART IV INVESTIGATORY AND PENAL-34. Breach of secrecy.

Any person having any official function under this Act who:

(a) having possession of or control over any information or any return or other document relating to the chargeable gains or allowable losses of any person, at any time, otherwise than for the purposes of this Act or another tax law within the meaning of section 47 or otherwise than with the express authority of the Minister:

(i) communicates or attempts to communicate the information or anything contained in the return or other document to any other person; or

(ii) suffers or permits any other person to have access to the information or to anything contained in the return or other document; or

(b) aids, abets or incites any other person to contravene paragraph (a) ,

shall be guilty of an offence and on conviction shall be liable to imprisonment for a term not exceeding one y

35 PART IV INVESTIGATORY AND PENAL-35. Offences by officials and unauthorised collection.

Any person who:

(a) being a person having any official function under this Act:

(i) otherwise than in good faith, demands from any person an amount in excess of the tax or penalties due under this Act; or

(ii) withholds for his own use or otherwise any portion of the amount of the tax collected; or

(iii) defrauds any person, embezzles any money or otherwise uses his position so as to deal wrongfully with the Director General or any other person; or

(b) not being authorised under this Act to do so, collects or attempts to collect the tax,

shall be guilty of an offence and on conviction shall be liable to imprisonment for a term not exceeding three years or to a fine not exceeding ten thousand ringgit or to both.


36 PART IV INVESTIGATORY AND PENAL-36. Other offences.

Any person who, without reasonable excuse, fails to comply with:

(a) the requirements of section 13(2) or (3); or

(b) the requirements of a notice given under section 27 or 28(3),

shall be guilty of an offence and on conviction shall be liable to imprisonment for a term not exceeding one year or to a fine not exceeding two thousand ringgit or to both.


37 PART IV INVESTIGATORY AND PENAL-37. Additional provisions as to offences under section 30, 32, 33 or 36.

(1) No criminal proceedings for an offence under section 30, 32, 33 or 36 shall be instituted more than twelve years after the offence was committed.

(2) Any person who aids, abets or incites another person to commit an offence under section 30, 32, 33 or 36 shall be deemed to have committed the same offence and shall be liable to the same penalty.


38 PART IV INVESTIGATORY AND PENAL-38. Tax payable notwithstanding proceedings.

The institution of proceedings or the imposition of a penalty, fine or term of imprisonment under this Part shall not relieve any person from liability for the payment of any amount of the tax for which he is or may be liable or from liability to make any return which he is required by this Act to make.


39 PART IV INVESTIGATORY AND PENAL-39. [Deleted by Act A1028: s.9] .

[Deleted by Act A1028: s.9]


40 PART IV INVESTIGATORY AND PENAL-40. Compounding of offences and abatement of penalties.

(1) Where any person has committed any offence under this Act, the Director General may at any time before conviction compound the offence and order that person to pay such sum of money, not exceeding the amount of the maximum fine and any special penalty to which that person would have been liable if he had been convicted of the offence, as he thinks fit:

Provided that the Director General shall not exercise his powers under this section unless that person in writing admits that he has committed the offence and requests the Director General to deal with the offence under this section.

(2) Where under this section the Director General compounds an offence committed by any person and makes an order accordingly:

(a) the order shall be made in writing under the hand of the Director General and there shall be attached to it the written admission and request referred to in subsection (1);

(b) th

41 PART IV INVESTIGATORY AND PENAL-41. Recovery of penalties.

(1) The special penalties imposed by sections 30(1) and 31(1) shall be recoverable in the same way as fines imposed on conviction.

(2) Any penalty imposed on any person by section 29(3), 30(2) or paragraph 5(3) of Schedule 1 shall be collected as if it were part of the tax payable by that person.


42 PART IV INVESTIGATORY AND PENAL-42. Jurisdiction of subordinate court.

Notwithstanding any other written law, a subordinate court (as defined in Schedule 5 to the Income Tax Act, 1967) shall have power to try any offence under this Act and on conviction to impose the full penalty therefor.


43 PART V ADMINISTRATIVE AND SUPPLEMENTAL-43. The Director General.

The Director General of Inland Revenue appointed under the law in force relating to income tax shall have the care and management of the tax.


44 PART V ADMINISTRATIVE AND SUPPLEMENTAL-44. Power of Minister to give directions to Director General.

The Minister may give to the Director General directions of a general character (not inconsisten with this Act) as to the exercise of the functions of the Director General under this Act; and the Director General shall give effect to any directions so given.


45 PART V ADMINISTRATIVE AND SUPPLEMENTAL-45. Delegation of Director General's functions.

(1) Any function of the Director General under this Act (not being a function exercisable by statutory order or a function exercisable under section 57) may be exercised by a Deputy Director General appointed under the law relating to income tax.

2) Any officer appointed under the law relating to income tax may exercised any function of the Director General under this Act (not being a function exercisable by statutory order or a function exercisable under sections 46 and 57).

[Subs. by Act 644]

(3) [Deleted by Act 644: s.44]

(4) [Deleted by Act 644: s.44]

(5) Any public officer or an employee of the Inland Revenue Board of Malaysia who is authorised under section 136 (5) of the Income Tax Act, 1967, to exercise or assist in exercising any function of the Director General under that Act shall be deemed to be an officer authorised to exercise or assist in exercising any func

46 PART V ADMINISTRATIVE AND SUPPLEMENTAL-46. Identification of officials.

(1) Any person exercising the right of access or the right to take possession conferred by section 28 shall carry a warrant in the prescribed form issued by the Director General which shall identify the holder and his office and shall be produced by the holder on demand to any person having reasonable grounds to make the demand.

(2) Where a person purporting to be a public officer or an employee of the Inland Revenue Board of Malaysia exercising functions under this Act produces a warrant in the form prescribed under subsection (1) or any written identification or authority, then, until the contrary is proved, the warrant, identification or authority shall be presumed to be genuine and he shall be presumed to be the person referred to therein.

[Am. by Act 557]

(3) A warrant issued to any person by the Director General under section 137 of the Income Tax Act, 1967, shall be deemed to be a warrant issued for

47 PART V ADMINISTRATIVE AND SUPPLEMENTAL-47. Certain materials to be treated as confidential.

(1) Subject to this section, every classified person shall regard and deal with classified material as confidential; and, if he is an official, he shall make and subscribe before the prescribed authority a declaration in the prescribed form that he will do so:

Provided that a person who has made and subscribed a corresponding declaration or oath under the income tax law shall be deemed to have made and subscribed the declaration required by this subsection.

(2) No classified material shall be produced or used in court or otherwise except:

(a) for the purposes of this Act or another tax law;

(b) in order to institute or assist in the course of a prosecution for any offence committed in relation to the tax or in relation to any tax or duty imposed by another tax law; or

(c) with the written authority of the Minister or of the person to whose affairs it relates.

48 PART V ADMINISTRATIVE AND SUPPLEMENTAL-48. Evidential provisions.

(1) In a suit under section 23 a certificate signed by the Director General giving the name and address of the defendant and the amount of the tax due from him shall be sufficient evidence of the amount so due and sufficient authority for the court to give judgment for that amount.

(2) A transcript of any particulars contained in a return or other document relating to the tax, if it is certified by or on behalf of the Director General or an authorised officer to be a true copy of the particulars, shall be admissible in evidence as proof of those particulars.

(3) No statement made or document produced by or on behalf of any person shall be inadmissible in evidence against that person in any proceedings against him for an offence under section 29, 30 or 31 or for the recovery of any sum due by way of tax or penalty, by reason only of the fact that he was or may have been induced to make the statement or produce the document by any lawful

48A PART V ADMINISTRATIVE AND SUPPLEMENTAL-48A. Admissibility of electronic record.

(1) Notwithstanding any other written law, where in any proceedings under this Act an electronic record of:

(a) any prescribed form is furnished by way of electronic transmission under section 57A; or

(b) any other document is stored or received by or communicated to the Director General in an electronic medium or by way of electronic transmission,

the electronic record or the copy or print-out of that electronic record shall be admissible as evidence of the fact stated or contained therein:

Provided that the record or the copy or print-out is:

(a) certified by the Director General to contain all or any information furnished, stored, communicated or received in an electronic medium or by way of electronic transmission under this section; or

(b) otherwise authenticated in the manner provided in the Evidence Act 1950 for authenticat

49 PART V ADMINISTRATIVE AND SUPPLEMENTAL-49. Returns, etc , presumed to be made with due authority.

A return, statement or other similar document purporting to be made for the purposes of this Act by or on behalf of any person shall be presumed to have been made by that person or on his authority, as the case may be, until the contrary is proved; and any person signing such a return, statement or document shall be deemed to be cognizant of its contents.


50 PART V ADMINISTRATIVE AND SUPPLEMENTAL-50. Persons by whom returns to be made.

Unless otherwise provided in Schedule I, returns under this Act on behalf of a person shall be made by the person responsible under the income tax law for making a return of the income of that person, or, if that person is not resident in Malaysia, by the trustee, guardian, committee, attorney, factor, agent, receiver, branch or manager of that person in Malaysia.


51 PART V ADMINISTRATIVE AND SUPPLEMENTAL-51. Power to appoint agent.

(1) The Director General may by notice in writing, if he thinks it necessary, declare any person to be the agent of any other person, and the person so declared the agent shall be the agent of that other person for the purposes of this Act and may be required to pay any tax due from any money (including pensions, salary, wages or any other remuneration) which may be held by him for, or due by him to, the person whose agent he has been declared to be; and in default of payment the tax shall be recoverable from him in the manner provided in section 23.

(2) For the purposes of this section the Director General may require any person to give him information as to any moneys, funds or other assets which may be held by him for, or of any moneys due by him to, any other person.

(3) Where a person declared under subsection (1) to be the agent of another person is aggrieved by the declaration, he may appeal under section 18 as if the declaration

52 PART V ADMINISTRATIVE AND SUPPLEMENTAL-52. Errors and defects in assessments, etc .

(1) No assessment, notice or other document purporting to be made or issued for the purposes of this Act shall be quashed or deemed to be void or voidable for want of form, or be affected by any mistake, defect or omission therein, if:

[Am. by Act 702]

(a) it is in substance and effect in conformity with or according to the intent and meaning of this Act; and

(b) the person to whom it is addressed and any other person referred to therein are designated according to common intent and understanding.

(2) A notice of assessment shall not be impeached or affected by reason of a mistake therein as to:

[Am. by Act 702]

(a) the name of the person liable; or

(b) the description of any chargeable gain or allowable loss,

so long as the requisition or notice of assess

53 PART V ADMINISTRATIVE AND SUPPLEMENTAL-53. Service of notices.

[Shoulder note Am. Act 702: s.51]

(1) Subject to any express provision of this Act, notices may be served for the purposes of this Act either personally or by ordinary or registered post.

[Am. by Act 702]

(2) A notice relating to the tax which is sent by ordinary or registered post shall be deemed to have been served on the person to whom it is addressed on the day succeeding the day on which the notice would have been received in the ordinary course of post if it is addressed:

[Am. by Act 702]

(a) in the case of a company, partnership or body of persons having a registered office in Malaysia:

(i) to that registered office;

(ii) to its last known address; or

(iii) to any person authorised by it to accept service of process;

[Subs. by Act 591] <

54 PART V ADMINISTRATIVE AND SUPPLEMENTAL-54. Power to direct where returns, etc , are to be sent.

[Am. by Act 557]

The Director General may be statutory order direct that any information, return, notification or document required to be supplied, sent or delivered to the Director General for the purposes of this Act shall, subject to any conditions contained in the order, be supplied, sent or delivered to such public officer or employee of the Inland Revenue Board of Malaysia or to such address as may be specified in the order.


55 PART V ADMINISTRATIVE AND SUPPLEMENTAL-55. Authentication of notices and other documents.

(1) Subject to subsection (2), every notice or other document issued, served or given for the purposes of this Act by the Director General or an authorised officer shall be sufficiently authenticated if the name and office of the Director General is printed, stamped or otherwise written thereon.

[Am. by Act 644; Act 702]

(2) Where this Act provides for a notice, certificate or other document to be under the hand of any officer, the notice, requisition, certificate or document shall be signed in manuscript by that officer.

[Am. by Act 702]

(3) A notice, certificate or other document issued, made, served or given for the purposes of this Act and purporting to be signed in manuscript by the Director General or an authorised officer shall be presumed, until the contrary is proved, to have been so signed.

[Am. by Act 702]


56 PART V ADMINISTRATIVE AND SUPPLEMENTAL-56. Free postage.

All returns made under this Act and all remittances of the tax (and any correspondence resulting from or connected with any such return or remittance) may, if posted in Malaysia in envelopes marked "Real Property Gains Tax", be sent free of postage to the Director General or to an officer or address specified in an order made under section 54:

[Am. by Act 644]

Provided that the Director General may in certain cases by notice in writing require any person to send any return, remittance or correspondence by registered post.


57 PART V ADMINISTRATIVE AND SUPPLEMENTAL-57. Forms.

(1) The Director General may prescribe forms to be used for the purposes of this Act and may authorise the use of a suitable substitute for any form so prescribed.

(2) Where in order to comply with any provision of this Act a person is required to use a prescribed form, he shall not be regarded as complying with that provision unless he uses all reasonable diligence to procure and use:

(a) a printed copy of the form so prescribed under subsection (1); or

(b) a copy of any substitute for the form authorised under subsection (1), being a printed copy unless the authorisation provides otherwise.


57A PART V ADMINISTRATIVE AND SUPPLEMENTAL-57A. Electronic medium.

(1) The Director General may allow any form prescribed under this Act to be furnished by any person or by any class of persons in an electronic medium or by way of an electronic transmission.

(2) For the purposes of subsection (1), the conditions and specifications under which any prescribed form is to be furnished shall be determined by the Director General.

[Ins. by Act 702]

(3) For the purposes of subsection (1), a person may give an authorization in writing to a tax agent, an advocate and solicitor of the High Court of Malaya or an advocate of the High Court of Sabah and Sarawak to furnish on his behalf the prescribed form in the manner provided in subsection (1).

[(3) Ins. Act 831:s.37]

(4) The prescribed form which is furnished pursuant to subsection (3) on behalf of any person shall be presumed to have been furnished on that person's authority, until the contra

57B PART V ADMINISTRATIVE AND SUPPLEMENTAL-57B. Tax identification number.

For the purposes of this Act, every person shall use the tax identification number assigned by the Director General under section 66a of the Income Tax Act 1967.

[57B. Ins. Act 833:s.32]


58 PART V ADMINISTRATIVE AND SUPPLEMENTAL-58. Power to make rules.

(1) The Minister may make rules for facilitating the operation of this Act.

(2) Without prejudice to the generality of subsection (1), the Minister may make rules:

(a) providing for returns to be made in cases other than those referred to in section 13 and specifying the persons by whom the returns are to be made and the information to be contained therein;

(b) prescribing, except where section 57(1) applies, any other thing required by this Act to be prescribed.

(3) Any rules made under subsection (1) shall be laid before the Dewan Rakyat.


59 PART V ADMINISTRATIVE AND SUPPLEMENTAL-59. Repeal of Act 126.

(1) The Land Speculation Tax Act 1974 is hereby repealed with effect from 7 November 1975, but without prejudice to the right of the Director General to take any action which he was empowered to take under that Act so repealed to assess and enforce payment of land speculation tax for the years of assessment 1974 and 1975 which at the date of the said repeal remains to be assessed or collected for those years.

(2) For the purposes of that Act so repealed, the year of assessment 1975 shall be the period commencing on 1 January, 1975 and ending on 6 November 1975.

(3) The Minister, at any time, may by statutory order make such transitional or saving provisions as he considers necessary or expedient.


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