Q.
Could you provide some short notes for exam?
A.
Real Property Gain Tax (RPGT)
Budget 2014/2015 (no change)
Stamp Act 1949
Fixed Duty or Ad Valorem Duty
For Property - ad valorem as it is by scale rate
For the rest of = 3%
Fixed duty is imposed on stamping for Articles of Association, Tenancy Agreement, S&P Agreement stamping, etc.
Development Charges under Town and Country Planning Act 1976.
S.32 TCPA 1976 empowers the government to levy development charges onto extension works done to a real property.
Method of charge is provided by rules in S.35.
Change of Use, Density or Area.
Annual Value/Improved Value under Local Government Act, 1976.
Renovation as in extension of kitchen, car porch, maid's room, etc. S.127 of Local Government Act 1976 in West Malaysia.
Local Government Ordinance 1961 in Sabah.
Local Authority Ordinance 1996 in Sarawak.
Power to impose rates by Section 127 of the Local Government Act, 1976.
S.130 (2) Basis of assessment of rates - not more than 35% of Annual Value, S.132 Drainage rate not more than 5%.
Drainage Rate (collected by Selangor) is by S.132 of the Local Government Act 1976.
Cukai Pintu/Local Government Act 1976
Calculated based on the annual value = estimated gross annual rent:
Usually 8-10% of the annual rent = 0.08 x 12000 = 960 in two payments.
Premium of land
60 or 99 years
Freehold no need to pay land premium subsequent of title issuance, because the land is owned by the land title holder and no more the state authority.
Land alienation premium usually depends on 5 factors:
- Condition of land
- Use of land (NLC S.52 categories : Industry, Agriculture or Building)
- Shape and size of land
- Term of lease (years)
- Locality
Land conversion premium calculation
1/4 x 1/100 value of land x years of extension (lease)
E.g. Land value = 500,000, years to extend lease 50 years.
1/4 x 1/100 x 500,000 x 50 = 62,500.
If application is made with 8 years lease still;
1/4 x 1/100 x 500,000 x (50-8) = 52,500.
Annual Rent for Sarawak
Premium and Use of Land in Sarawak
Renewal of Land lease in Sarawak
Capital Allowance
Generally Initial Allowance and Yearly Allowance:
Industrial Building Allowance
Schedule 3 Paragraph 63 Sch. 3 Para 63 Income Tax Act, 1967.
Industrial Building Allowance (IBA) is granted to companies incurring capital expenditure on construction or purchase of a building which is used for specific purposes.In this regard, companies are eligible for an initial allowance of 10% and an annual allowance of 3% so as IBA can be claimed within 30 years.
- Building for storage of goods
- Buildings used for Research and Development activities
- Hospitals, old folks’ homes, schools, colleges and training centres
The allowance for this building is given at the rate of 10% for 10 consecutive years.
- Buildings provided for staff living accommodation and staff welfare
The allowance for such buildings are given at the rate of 40% initial and 3% annual as opposed to the normal 10% for initial allowance and 3% for annual allowance.
Other Building eligible for IBA are:
- Buildings constructed pursuant to an agreement with the government.
- Buildings used for an approved service project.
- Buildings occupied by approved MSC status companies.
- Buildings occupied by BioNexus companies.
- Plant and machinery treated as a building.
- Buildings on farms may qualify as Qualifying Plant Expenditure.
Business below can qualify for IBA:
iv) Approved service project