Finance 1
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LAWS OF MALAYSIA
REPRINT
Act 557
FINANCE ACT 1997
Incorporating all amendments up to 1 January 2006
PUBLISHED BY
THE COMMISSIONER OF LAW REVISION, MALAYSIA
UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968
IN COLLABORATION WITH
PERCETAKAN NASIONAL MALAYSIA BHD
2006
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FINANCE ACT 1997
Date of Royal Assent ... ... ... … … 6 February 1997
Date of publication in the Gazette … … 6 March 1997
PREVIOUS REPRINT
First Reprint ... ... ... ... ... 2002
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LAWS OF MALAYSIA
Act 557
FINANCE ACT 1997
ARRANGEMENT OF SECTIONS
CHAPTER I
PRELIMINARY
Section
1. Short title
2. Amendments and repeal
CHAPTER II
AMENDMENTS TO THE INCOME TAX ACT 1967
3. Commencement of amendments to the Income Tax Act 1967
4. Amendment of section 2
5. Amendment of section 4A
6. Amendment of section 13
7. Amendment of section 15A
8. Amendment of section 34
9. Amendment of section 39
10. Amendment of section 44
11. Amendment of section 46
12. Amendment of section 49
13. Amendment of section 60G
14. New section 60H
15. Amendment of section 83
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Section
16. Amendment of section 103
17. Amendment of section 107A
18. Amendment of section 109
19. Amendment of section 109B
20. Amendment of section 136
21. Amendment of Schedule 1
22. Amendment of Schedule 3
23. Amendment of Schedule 6
24. Amendment of Schedule 7A
CHAPTER III
AMENDMENTS TO THE PETROLEUM (INCOME TAX)
ACT 1967
25. Commencement of amendments to the Petroleum (Income Tax) Act
1967
26. Amendment of section 2
27. Amendment of section 16
28. Amendment of section 22
29. Amendment of section 69
30. Amendment of section 70
31. Amendment of section 71
CHAPTER IV
AMENDMENTS TO THE REAL PROPERTY GAINS
TAX ACT 1976
32. Commencement of amendments to the Real Property Gains Tax Act
1976
33. Amendment of section 2
34. Amendment of section 45
35. Amendment of section 46
36. Amendment of section 47
37. Amendment of section 54
38. Amendment of Schedule 2 Adam Haida & Co
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CHAPTER V
AMENDMENT TO THE LABUAN OFFSHORE BUSINESS
ACTIVITY TAX ACT 1990
Section
39. Commencement of amendment to the Labuan Offshore Business Activity
Tax Act 1990
40. Amendment of section 2
CHAPTER VI
AMENDMENTS TO THE SERVICE TAX ACT 1975
41. Commencement of amendments to the Service Tax Act 1975
42. Amendment of section 2
43. Amendment of section 3
44. Amendment of section 14
CHAPTER VII
AMENDMENT TO THE SALES TAX ACT 1972
45. Commencement of amendment to the Sales Tax Act 1972
46. New section 2 B
CHAPTERVIII
AMENDMENT TO THE CUSTOMS ACT 1967
47. Commencement of amendment to the Customs Act 1967
48. Amendment of section 65
CHAPTER IX
AMENDMENTS TO THE FREE ZONES ACT 1990
49. Commencement of amendments to the Free Zones Act 1990
50. Amendment of section 2
51. Amendment of section 5
52. New section 6 A
53. Amendment of section 8
54. Amendment of section 9
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Section
55. Amendment of section 10
56. Amendment of section 11
57. Amendment of section 12
58. Amendment of section 13
59. Amendment of section 30
CHAPTER X
REPEAL OF THE CINEMATOGRAPH FILM-HIRE DUTY
ACT 1965
60. Commencement of the repeal of the Cinematograph Film-Hire Duty
Act 1965
61. Repeal
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LAWS OF MALAYSIA
Act 557
FINANCE ACT 1997
An Act to amend the Income Tax Act 1967, the Petroleum (Income
Tax) Act 1967, the Real Property Gains Tax Act 1976, the Labuan
Offshore Business Activity Tax Act 1990, the Service Tax Act
1975, the Sales Tax Act 1972, the Customs Act 1967 and the Free
Zones Act 1990, and to repeal the Cinematograph Film-Hire Duty
Act 1965.
[ ]
BE IT ENACTED by the Seri Paduka Baginda Yang Di-Pertuan
Agong with the advice and consent of the Dewan Negara and
Dewan Rakyat in Parliament assembled, and by the authority of
the same, as follows:
C HAPTER I
PRELIMINARY
Short title
1. This Act may be cited as the Finance Act 1997.
Amendments and repeal
2. (1) The Income Tax Act 1967 [Act 53], the Petroleum (Income
Tax) Act 1967 [Act 543], the Real Property Gains Tax Act 1976
[Act 169], the Labuan Offshore Business Activity Tax Act 1990
[Act 445], the Service Tax Act 1975 [Act 151], the Sales Tax Act
1972 [Act 64], the Customs Act 1967 [Act 235] and the Free Zones
Act 1990 [Act 438] are amended in the manner specified in Chapters
II, III, IV, V, VI, VII, VIII and IX respectively.
(2) The Cinematograph Film-Hire Duty Act 1965 [Act 434] is
Adam
repealed in the manner specified Haida &X.Co
in Chapter
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CHAPTER II
AMENDMENTS TO THE INCOME TAX ACT 1967
Commencement of amendments to the Income Tax Act 1967
3. (1) Except for paragraphs 4(a), 4(b), 19(a) and 19(b) and
sections 5, 7, 15, 16, 17, 18, 20 and 21, this Chapter shall have
effect for the year of assessment 1997 and subsequent years of
assessment.
(2) Paragraphs 4(a) and 19(b) and sections 16, 17 and 18 shall
be deemed to have come into force on 25 October 1996.
(3) Paragraphs 4(b) and 19(a) and sections 5, 7, 15 and 21 shall
come into force on 1 January 1997.
(4) Section 20 shall be deemed to have come into force on 2
August 1996.
Amendment of section 2
4. The Income Tax Act 1967 [Act 53], which in this Chapter is
referred to as the “principal Act”, is amended in subsection 2(1)—
(a) in the definition of “approved loan” by inserting after the
words “a person” in paragraph (b) the words “pursuant
to an application received prior to 25 October 1996”; and
(b) in the definition of “royalty” by substituting for
subparagraph (a)(i) the following subparagraph:
“(i) copyrights, artistic or scientific works, patents,
designs or models, plans, secret processes or formulae,
trademarks, or tapes for radio or television broadcasting,
motion picture films, films or video tapes or other
means of reproduction where such films or tapes have
been or are to be used or reproduced in Malaysia or
other like property or rights;”.
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Amendment of section 4A
5. Paragraph 4A(iii) of the principal Act is amended by deleting
the words “, not being payments of film rentals, where the duty
is leviable under the Cinematograph Film-Hire Duty Act 1965,”.
Amendment of section 13
6. Subparagraph 13(1)(b)(i) of the principal Act is amended by
inserting after the words “dental treatment” the words “or a benefit
for child care”.
Amendment of section 15A
7. Paragraph 15 A(c) of the principal Act is amended by deleting
the words “, not being payments of film rentals, where the duty
is leviable under the Cinematograph Film-Hire Duty Act 1965,”.
Amendment of section 34
8. Subsection 34(6) of the principal Act is amended—
(a) in paragraph (f) by deleting the word “and” at the end
of the paragraph;
(b) in paragraph (g) by substituting for the full stop at the
end of the paragraph a semicolon; and
(c) by inserting after paragraph (g) the following paragraphs:
“(h) an amount equal to the expenditure incurred by
the relevant person in the relevant period on the
provision of services, public amenities and
contributions to a charity or community project
pertaining to education, health, housing and
infrastructure, approved by the relevant authority:
Provided that where a deduction has been
made under this paragraph, no further deduction
of the same amount shall be allowed under
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subsection 44(6);
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(i) an amount equal to the expenditure incurred, not
being capital expenditure on land, premises,
buildings, structures or works of a permanent nature
or on alterations, additions or extensions thereof
or in the acquisition of any rights in or over any
property, by the relevant person in the relevant
period on the provision and maintenance of a child
care centre for the benefit of persons employed by
him in his business; and
(j) an amount equal to the expenditure incurred by
the relevant person in the relevant period in
establishing and managing a musical or cultural
group approved by the Minister.”.
Amendment of section 39
9. Subsection 39(1) of the principal Act is amended—
(a) in paragraph (f) by substituting for the semicolon at the
end of the paragraph a colon and inserting thereafter the
following proviso:
“Provided that this paragraph shall not apply if the
payer has paid the amount referred to in subsection (2)
of that section.”;
(b) in paragraph (i) by substituting for the semicolon at the
end of the paragraph a colon and inserting thereafter the
following proviso:
“Provided that this paragraph shall not apply if the
payer has paid the amount referred to in subsection (2)
of that section.”; and
(c) in paragraph (j) by substituting for the semicolon at the
end of the paragraph a colon and inserting thereafter the
following proviso:
“Provided that this paragraph shall not apply if the
payer has paid the amount referred to in subsection (2)
of that section.”.
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Amendment of section 44
10. Section 44 of the principal Act is amended—
(a) in paragraph (1)(c) by inserting after the words “(6)” the
words “or (6A)”;
(b) by inserting after subsection (6) the following subsection:
“(6 A ) There shall be deducted pursuant to this
subsection from the aggregate income of a person for
the relevant year reduced by any deduction falling to
be made for that year pursuant to subsection (2) or
Schedule 4, 4 A or 4B, an amount equal to the value, as
determined by the Department of Museum and
Antiquities or the National Archives of any gift of
artefact or manuscript made by him in the basis year
for that year to the Government or State Government.”;
and
(c) in subsection (7) in the definition of “institution” by
substituting for paragraph (f) the following paragraph:
“(f) a technical or vocational training institution;”.
Amendment of section 46
11. Section 46 of the principal Act is amended—
(a) by renumbering the existing section 46 as subsection
46(1);
(b) in paragraph (e) by deleting the word “and” at the end
of the paragraph;
(c) in paragraph (f) by substituting for the full stop at the end
of the paragraph the words “; and”;
(d) by inserting after paragraph (f) the following paragraph:
“(g) an amount limited to a maximum of five thousand
ringgit in respect of medical expenses expended
in that basis year by that individual on himself
if he is suffering from a serious disease or on his
wife or child who is suffering from a serious
disease, or in the case of a wife, on herself if she
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is suffering from a serious disease or on her
husband or child who is suffering from a serious
disease:
Provided that the claim is evidenced by a receipt
and certification issued by a medical practitioner
that treatment was provided to the individual, spouse
or child for that disease:
Provided further that where the wife has no
total income the total deduction under this paragraph
shall not exceed five thousand ringgit.”; and
(e) by inserting after subsection (1) the following subsection:
“(2) In paragraph (1)(g)—
“child” shall be construed as referring to a child as
defined in subsection 48(9);
“serious disease” includes acquired immunity
deficiency syndrome, Parkinson’s disease, cancer, renal
failure, leukaemia and other similar diseases.”.
Amendment of section 49
12. Section 49 of the principal Act is amended by substituting
for subsection (2) the following subsection:
“(2) For the purposes of subsection (1), no regard shall be
had to any contribution to an approved scheme unless the
contribution was obligatory by reason of—
(a) any contract of employment of the individual claiming
a deduction in respect of the contribution; or
(b) any provision in the rules, regulations, by-laws or
constitution of the scheme,
and, where the contribution was partly obligatory by reason
of such a contract or provision and partly not so obligatory,
regard shall be had only to the part which was so obligatory.”.
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Amendment of section 60G
13. Subsection 60 G (6) of the principal Act is amended by
substituting for the definition of “foreign fund management company”
the following definition:
“foreign fund management company” means a company
incorporated in Malaysia and licensed under the Securities
Industry Act 1983 [Act 280];’.
New section 60H
14. The principal Act is amended by inserting after section 60G
the following section:
“Closed-end fund company
60H. (1) This section shall apply to a closed-end fund company
resident in Malaysia for the basis year for a year of assessment.
(2) Where a closed-end fund company receives an amount in
respect of gains from the realization of investments in the basis
period for a year of assessment such amount shall be exempt from
tax for that year of assessment.
(3) Paragraphs 5 and 6 of Schedule 7 A shall apply, mutatis
mutandis, to the amount exempted under subsection (2) and
paragraph 35 of Schedule 6 (where applicable).
(4) In ascertaining the total income of a closed-end fund company
for the basis period for a year of assessment there shall be deducted
before any deduction falling to be made under paragraph 44(1)(c)
an amount in respect of expenses incurred by that closed-end fund
company during that period, which amount shall be determined in
accordance with the formula
Ax B
4C
where A is the total of the permitted expenses incurred for
that basis period;
B is the gross income consisting of dividend and interest
chargeable to tax Adam Haida
for that basis& period;
Co and
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C is the aggregate of the gross income consisting of
dividend and interest (whether exempt or not) and
gains made from the realization of investments
(whether chargeable to tax or not) for that basis
period:
Provided that—
(a) the amount of deduction to be made shall not be less than
ten per cent of the total permitted expenses incurred for
that basis period; and
(b) where, by reason of an absence or insufficiency of aggregate
income for that year of assessment, effect cannot be
given or cannot be given in full to any deduction falling
to be made to the closed-end fund company under this
section for that year, that deduction which has not been
so made shall not be made to the closed-end fund company
for any subsequent year of assessment.
(5) For the purposes of this section —
“closed-end fund company” means a public limited company
incorporated in Malaysia and approved by the Securities Commission
to engage wholly in the investment of funds in securities;
“permitted expenses” means expenses incurred by a closed-end
fund company in respect of—
(a) manager’s remuneration;
(b) maintenance of register of shareholders;
(c) share registration expenses;
(d) secretarial, audit and accounting fees, telephone charges,
printing and stationery costs and postage;
“securities” means debentures, stocks and shares in a public
company or corporation, or bonds of any government or any body
corporate or unincorporate and includes any right or option in
respect thereof and any interest in unit trust schemes.
(6) Sections 33 and 34 shall not apply to a closed-end fund
company.”.
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Amendment of section 83
15. Subsection 83(3) of the principal Act is amended by substituting
for the full stop at the end of the proviso a colon and inserting the
following further proviso:
“Provided further that an employer shall not be required to
give the written notice under this subsection in respect of an
individual—
(a) where the income from the employment of that individual
is subject to deduction under any rules made pursuant
to paragraph 154(1)(a); or
(b) where the total monthly remuneration from the
employment of that individual is below the minimum
amount of income that is subject to deduction under
any rules made pursuant to paragraph 154(1)(a),
and where it is known to him that the individual is not retiring
from any employment.”.
Amendment of section 103
16. Subsection 103(7) of the principal Act is amended by deleting
the words “107 A(2) or” and “or 109(2) or 109B(2)”.
Amendment of section 107 A
17. Section 107 A of the principal Act is amended by substituting
for subsection (2) the following subsection:
“(2) Where the payer fails to pay any amount due from him
under subsection (1), that amount which he fails to pay shall
be increased by an amount equal to ten per cent of the contract
payment liable to deduction of tax under subsection (1) and
the total sum shall be a debt due from him to the Government
and shall be payable forthwith to the Director General.”.
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Amendment of section 109
18. Section 109 of the principal Act is amended by substituting
for subsection (2) the following subsection:
“(2) Where the payer fails to pay any amount due from him
under subsection (1), that amount which he fails to pay shall
be increased by an amount equal to ten per cent of the interest
or royalty liable to deduction of tax under subsection (1) and
the total sum shall be a debt due from him to the Government
and shall be payable forthwith to the Director General.”.
Amendment of section 109 B
19. Section 109B of the principal Act is amended—
(a) in paragraph (1)(c) by deleting the words “, not being
payments of film rentals, where the duty is leviable under
the Cinematograph Film-Hire Duty Act 1965,”; and
(b) by substituting for subsection (2) the following subsection:
“(2) Where the payer fails to pay any amount due
from him under subsection (1), that amount which he
fails to pay shall be increased by an amount equal to ten
per cent of the payments liable to deduction of tax under
paragraph (1)(a), (1)(b) or (1)(c) and the total sum shall
be a debt due from him to the Government and shall be
payable forthwith to the Director General.”.
Amendment of section 136
20. Subsection 136(8) of the principal Act is amended by inserting
after the words “to that officer” the words “or employee”.
Amendment of Schedule 1
21. Part V of Schedule 1 to the principal Act is amended in
paragraph (iii) by deleting the words “, not being payments of film
rentals, where the duty is leviable under the Cinematograph Film-
Hire Duty Act 1965”.
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Amendment of Schedule 3
22. Schedule 3 to the principal Act is amended in subparagraph
42A(1) by substituting for the words “business of manufacturing”
the words “manufacturing, hotel or tourism business or an approved
service project under Schedule 7 B.”.
Amendment of Schedule 6
23. Schedule 6 to the principal Act is amended—
(a) in subsubparagraph 12(1)(b) by substituting for the words
“five hundred thousand ringgit” the words “seven hundred
and fifty thousand ringgit”;
(b) by inserting after paragraph 32B the following paragraph:
“32C. Income of an individual resident in Malaysia
in that basis year in respect of his performances in
cultural performances approved by the Minister:
Provided that the exemption shall not apply where
the payment arises to the individual as part of his
emoluments in the exercise of his official duties.”; and
(c) in subparagraph 35(c) by inserting after the words “Rating
Agency Malaysia Berhad” the words “or Malaysian Rating
Corporation Berhad”.
Amendment of Schedule 7A
24. Schedule 7 A to the principal Act is amended—
(a) in subparagraph 5(1) by substituting for the word “As”
at the beginning of the subparagraph the words “In the
case of a company as”; and
(b) by inserting after paragraph 9 the following paragraph:
“10. Except for paragraphs 1 and 5, this Schedule
shall also apply to an agrobased co-operative society
(within the meaning assigned to it under the Farmers’
Organization Act 1973 [Act 109]), an Area Farmers’
Association, a National Farmers’ Association, a State
Farmers’ AssociationAdam Haida
(within & Co
the meanings assigned to
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them under the Farmers’ Organization Act 1973
[Act 109]), an Area Fishermen’s Association, a National
Fishermen’s Association and a State Fishermen’s
Association (within the meanings assigned to them
under the Fishermen’s Associations Act 1971 [Act 44]).”
CHAPTER III
AMENDMENTS TO THE PETROLEUM (INCOME TAX)
ACT 1967
Commencement of amendments to the Petroleum (Income Tax)
Act 1967
25. (1) Except for sections 26, 29, 30 and 31, this Chapter shall
have effect for the year of assessment 1997 and subsequent years
of assessment.
(2) Sections 26, 29, 30 and 31 shall be deemed to have come
into force on 2 August 1996.
Amendment of section 2
26. The Petroleum (Income Tax) Act 1967, which in this Chapter
is referred to as the “principal Act”, is amended in subsection 2(1)
by inserting after the definition of “entertainment” the following
definition:
‘ “Inland Revenue Board of Malaysia” means the Inland
Revenue Board of Malaysia established under the Inland
Revenue Board of Malaysia Act 1995 [Act 533];’.
Amendment of section 16
27. Section 16 of the principal Act is amended by inserting after
subsection (7A) the following subsections:
“(7B) There shall be deducted from the relevant gross income
an amount equal to the amount of expenditure incurred by the
relevant chargeable person in the relevant period on the provision
of services, public amenities and contributions to a charity or
community project pertaining to education, health, housing
and infrastructure, approved by the relevant authority:
Provided that where a deduction has been made under this
paragraph, no further deduction of the same amount shall be
allowed under subsection 22(1). Adam Haida & Co
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(7C) There shall be deducted from the relevant gross income
an amount equal to the expenditure incurred not being capital
expenditure on land, premises, buildings, structures or works
of a permanent nature or on alterations, additions or extensions
thereof or in the acquisition of any rights in or over any
property, by the relevant chargeable person in the relevant
period on the provision and maintenance of a child care centre
for the benefit of persons employed by him in his business.
(7D) There shall be deducted from the relevant gross income
an amount equal to the amount of expenditure incurred by the
relevant chargeable person in the relevant period in establishing
and managing a musical or cultural group approved by the
Minister.”.
Amendment of section 22
28. Section 22 of the principal Act is amended by inserting after
subsection (1) the following subsection:
“(1A) The chargeable income of a chargeable person for a
year of assessment shall consist of the amount of his assessable
income for that year reduced by an amount equal to the value,
as determined by the Department of Museums and Antiquities
or the National Archives, of any gift of artefact or manuscript
made by him in the basis period for that year of assessment
to the Government or State Government.”.
Amendment of section 69
29. Section 69 of the principal Act is amended—
(a) in subsection (5) by inserting after the words “public
officer” the words “or any employee of the Inland Revenue
Board of Malaysia”;
(b) in subsection (6) by inserting after the words “public
officer” the words “or an employee of the Inland Revenue
Board of Malaysia”; and
(c) in subsection (8) by inserting after the words “public
officer” the words “or an employee of the Inland Revenue
Board of Malaysia” and after the words “to that officer”
the words “or employee”.
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Amendment of section 70
30. Subsection 70(2) of the principal Act is amended by inserting
after the words “public officer” the words “or an employee of the
Inland Revenue Board of Malaysia.”.
Amendment of section 71
31. Subsection 71(5) of the principal Act is amended in the
definition of “classified person”—
(a) by deleting the word “or” at the end of paragraph (b);
(b) by inserting the word “or” at the end of paragraph (c);
and
(c) by inserting after paragraph (c) the following paragraph:
“(d) any employee of the Inland Revenue Board of
Malaysia;”.
CHAPTER IV
AMENDMENTS TO THE REAL PROPERTY GAINS
TAX ACT 1976
Commencement of amendments to the Real Property Gains
Tax Act 1976
32. (1) Except for sections 33, 34, 35, 36 and 37, this Chapter
shall be deemed to have come into force on 25 October 1996.
(2) Sections 33, 34, 35, 36 and 37 shall be deemed to have come
into force on 2 August 1996.
Amendment of section 2
33. The Real Property Gains Tax Act 1976 [Act 169], which in
this Chapter is referred to as the “principal Act”, is amended in
subsection 2(1) by inserting after the definition of “income tax
law” the following definition:
“Inland Revenue Board of Malaysia” means the Inland
Revenue Board of Malaysia established under the Inland
Revenue Board of Malaysia Act 1995 [Act 533];’ .
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Amendment of section 45
34. Section 45 of the principal Act is amended—
(a) in subsection (5) by inserting after the words “public
officer” the words “or an employee of the Inland Revenue
Board of Malaysia”;
(b) in subsection (6) by inserting after the words “public
officer” the words “or an employee of the Inland Revenue
Board of Malaysia”; and
(c) in subsection (8) by inserting after the words “public
officer” the words “or an employee of the Inland Revenue
Board of Malaysia” and after the words “to that officer”
the words “or employee”.
Amendment of section 46
35. Subsection 46(2) of the principal Act is amended by inserting
after the words “public officer” the words “or an employee of the
Inland Revenue Board of Malaysia”.
Amendment of section 47
36. Subsection 47(5) of the principal Act is amended in the
definition of “classified person”—
(a) by deleting the word “or” at the end of paragraph (c);
(b) by inserting the word “or” at the end of paragraph (d);
and
(c) by inserting after paragraph (d) the following paragraph:
“(e) any employee of the Inland Revenue Board of
Malaysia;”.
Amendment of section 54
37. Section 54 of the principal Act is amended by inserting after
the words “public officer” the words “or employee of the Inland
Revenue Board of Malaysia”.
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Amendment of Schedule 2
38. Schedule 2 to the principal Act is amended—
(a) in subparagraph 1(1) in the definition of “relative” by
deleting the words “uncle, aunt, nephew, niece, cousin,”;
(b) in subsubparagraph 15(1)(a) by substituting for the word
“an” the words “a written”; and
(c) in subsubparagraph 15(1)(b) by inserting after the words
“where there is no” the word “written”.
CHAPTER V
AMENDMENT TO THE LABUAN OFFSHORE BUSINESS
ACTIVITY TAX ACT 1990
Commencement of amendment to the Labuan Offshore Business
Activity Tax Act 1990
39. This Chapter shall have effect for the year of assessment
1997 and subsequent years of assessment.
Amendment of section 2
40. The Labuan Offshore Business Activity Tax Act 1990
[Act 445] is amended in subsection 2(1) by substituting for the
definition of “offshore trust” the following definition:
‘ “offshore trust” has the meaning assigned thereto by the
Labuan Offshore Trusts Act 1996 [Act 554];’.
CHAPTER VI
AMENDMENTS TO THE SERVICE TAX ACT 1975
Commencement of amendments to the Service Tax Act 1975
41. This Chapter shall be deemed to have come into force on 25
October 1996.
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Amendment of section 2
42. The Service Tax Act 1975 [Act 151], which in this Chapter
is referred to as the “principal Act”, is amended in section 2 by
inserting after the definition of “electronic data interchange” the
following definition:
‘ “exported taxable service” means service supplied for and
to a person in a country other than Malaysia (excluding
Langkawi, Labuan and free zones), provided that the service
is not supplied in connection with goods or land situated in
Malaysia and the person is not in Malaysia at the time the
service is performed;’.
Amendment of section 3
43. Section 3 of the principal Act is amended by substituting for
paragraph (a) the following paragraph:
“(a) any prescribed service (hereafter in this Act referred to
as “taxable service”) provided by or in—
(i) any prescribed professional establishment; or
(ii) any prescribed establishment,
except for exported taxable service;”.
Amendment of section 14
44. Subsection 14(2) of the principal Act is amended by substituting
for the word “six” wherever appearing the word “twelve”.
CHAPTER VII
AMENDMENT TO THE SALES TAX ACT 1972
Commencement of amendment to the Sales Tax Act 1972
45. This Chapter shall be deemed to have come into force on 25
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New section 2 B
46. The Sales Tax Act 1972 [Act 64] is amended by inserting
after section 2A the following section:
“Licensed warehouse and licensed manufacturing warehouse
deemed outside Malaysia
2 B. For the purpose of this Act, a licensed warehouse and
a licensed manufacturing warehouse shall be deemed to be
a place outside Malaysia.
In this section, the expression “a licensed manufacturing
warehouse” means a licensed warehouse in respect of which
an additional licence to carry on any manufacturing process
has been granted under section 65A of the Customs Act 1967
[Act 235].”.
CHAPTER VIII
AMENDMENT TO THE CUSTOMS ACT 1967
Commencement of amendment to the Customs Act 1967
47. This Chapter shall be deemed to have come into force on
25 October 1996.
Amendment of section 65
48. The Customs Act 1967 [Act 235] is amended in
subsection 65(1) by inserting after the words “goods liable to
customs duties” the words “and any other goods”.
CHAPTER IX
AMENDMENTS TO THE FREE ZONES ACT 1990
Commencement of amendments to the Free Zones Act 1990
49. This Chapter shall be deemed to have come into force on 25
October 1996.
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Amendment of section 2
50. The Free Zones Act 1990 [Act 438], which in this Chapter
is referred to as the “principal Act”, is amended in subsection 2(1)
by substituting for the definition of “commercial activity” the
following definition:
‘ “commercial activity” includes trading (excluding retail
trade), breaking bulk, grading, repacking, relabelling and
transit;’.
Amendment of section 5
51. Paragraph 5(2)(c) of the principal Act is amended by inserting
after the word “package” the words “or otherwise”.
New section 6 A
52. The principal Act is amended by inserting after section 6 the
following section:
“Retail trade in free zone
6A. The Minister may, at his absolute discretion, authorize
any retail trade to be conducted in a free zone and the
Minister may in relation to such authorization impose such
conditions as he may deem fit.”.
Amendment of section 8
53. Section 8 of the principal Act is amended by deleting
subsections (2) and (3).
Amendment of section 9
54. Section 9 of the principal Act is amended by inserting after
the word “5” the words “, 6 A”.
Amendment of section 10
55. Section 10 of the principal Act is amended by substituting
for subsection (3) the following subsection:
“(3) Notwithstanding anything to the contrary in any written
law, the Minister may allow any activity to be carried out in
a free zone subject to such conditions as he may deem fit to
impose.” Adam Haida & Co
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Amendment of section 11
56. Section 11 of the principal Act is amended—
(a) in subsection (1) by deleting the words “and are approved
by the Minister”; and
(b) by substituting for subsection (2) the following subsection:
“(2) The Minister may, in any particular case, allow
goods, other than those referred to in subsection (1), to
be brought into a free industrial zone for any activity as
he may approve and subject to such conditions as he may
deem fit to impose.”.
Amendment of section 12
57. Subsection 12(1) of the principal Act is amended by deleting
the words “for retail trade or otherwise”.
Amendment of section 13
58. Subsection 13(1) of the principal Act is amended by inserting
after the word “maintain” the words “or allow”.
Amendment of section 30
59. Paragraph 30(a) of the principal Act is amended by inserting
after the word “5” the words “, 6A”.
CHAPTER X
REPEAL OF THE CINEMATOGRAPH FILM-HIRE DUTY
ACT 1965
Commencement of the repeal of the Cinematograph Film-Hire
Duty Act 1965
60. This Chapter shall come into force on 1 January 1997.
Repeal
61. The Cinematograph Film-Hire Duty Act 1965 [Act 434] is
repealed.
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LAWS OF MALAYSIA
Act 557
FINANCE ACT 1997
LIST OF AMENDMENTS
Amending law Short title In force from
– NIL –
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LAWS OF MALAYSIA
Act 557
FINANCE ACT 1997
LIST OF SECTIONS AMENDED
Section Amending authority In force from
– NIL –
DICETAK OLEH
PERCETAKAN NASIONAL MALAYSIA BERHAD,
KUALA LUMPUR
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