FINANCE (NO. 2) ACT 1998

Section 4 shall be deemed to have come into force on 24

October 1998.

Sections 6 and 10 shall have effect for the year of assessment 2000 and subsequent years of assessment.

Section 8 shall be deemed to have effect for the year of assesment 1995 and subsequent years of assesment.

Section 13 shall be deemed to have effect for the year of assessment 1998 and subsequent years of assessment.

Amendment of section 13

leave passages for travel within Malaysia not exceeding three times in any calendar year; or

one leave passage for travel between Malaysia and any place outside Malaysia in any calendar year, limited to a maximum of three thousand ringgit:

Provided that the benefit or amenity enjoyed under this subparagraph is confined only to the employee and members of his immediate family;”.

Amendment of section 34

in paragraph (1)(b) by substituting for the words “or 4b”

the words, “4b or 4c”;

in subsection (6) by substituting for the words “or 4b,”

the words, “4b or 4c”; and



Finance (No. 2)

in subsection (6a) by substituting for the words “or 4b,”

the words, “4b or 4c”.

Amendment of section 54a

by substituting for subsection (1) the following subsection:

“(1)  Subject to the following subsections, where a person who is resident for the basis year for a year of assessment carries on the business of—

transporting passengers or cargo by sea on a

Malaysian ship; or

letting out on charter a Malaysian ship owned by him on a voyage or time charter basis, the statutory income for that year of assessment from that business shall be exempt from tax.”;

in subsection (3) by substituting for the words “the business of transporting passengers or cargo on board a Malaysian ship” the words “a business in respect of which his income is exempt under subsection (1)”;

and

in subsection (6)—

by substituting for the semicolon appearing at the end of the definition of “person” a full stop;

and

by substituting for subparagraph (3a)(a)(iii) the following subparagraph:

“(iii) the amount of the actuarial surplus from the life fund that is transferred to the shareholders’ fund;

and”; and



Act 591

by substituting for subparagraph (4a)(a)(iii) the following subparagraph:

“(iii) the amount of the actuarial surplus from the life fund that is transferred to the shareholders’ fund;

and”.

Substitution of section 130

The relief shall be such relief as will reduce the amount of tax chargeable on him in respect of his chargeable income for that year of assessment to an amount which bears the same proportion to the amount of tax which would be so chargeable if he were resident for that basis year and the tax were charged on his aggregate income as the amount of his total income bears to the amount of his aggregate income.

An individual claiming relief under this section shall make his claim in the prescribed form and shall furnish such further particulars as the Director General may require.

In this section, “aggregate income”, in relation to an individual claiming relief under this section for a year of assessment, means his total income, accruing in or derived from Malaysia or elsewhere, computed in accordance with the provisions of this Act:

Provided that where subsection 45(2) applies in arriving at the aggregate income the reference to total income shall include the total income of the wife of the individual.”.



Finance (No. 2)

New Schedule 4c

the application for approval for the project shall be made not later than 31 December 1999;

the project shall commence within one year from the date of approval;

and

at least eighty per cent of the sales, if any, of the produce are made within Malaysia.

seventy per cent of the issued share capital of the surrendering company are directly owned by the claimant company;

seventy per cent of the issued share capital of the claimant company are directly owned by the surrendering company; or

seventy per cent each of the issued share capital of the surrendering company and claimant company are directly owned by another company.

in subparagraph (1)(a) by inserting after the semicolon the word “and”;

in subparagraph (1)(b) by substituting for the words

“; and” a comma; and

by deleting subparagraph (1)(c).

to that registered office;

by substituting for the proviso to the definition of “offshore business activity” the following proviso:

“Provided that—

in relation to an offshore company carrying on an offshore banking business, such activity may be carried on with residents and, where permitted under subsection 20(2) of the Offshore Banking

Act 1990 [Act 443], transactions may be carried on in Malaysian currency;

in relation to an offshore company carrying on an offshore insurance business, such activity may be

13

Finance (No. 2)

carried on with residents and, where permitted under subsection 21(2) of the Offshore Insurance

Act 1990 [Act 444], transactions may be carried on in Malaysian currency;

in relation to the holding of investments by an offshore company in a domestic company, such holding may be in Malaysian currency;

in relation to an offshore company carrying on a money-broking business, such activity may be carried on with residents where permitted under paragraph 7(3)(a) of the Offshore Companies Act 1990 [Act 441] ;

in relation to an offshore company carrying on an offshore leasing business, such activity may be carried on with residents where permitted under paragraph 7(3)(a) of the Offshore Companies Act 1990; or

the Minister may approve the carrying on of such activity with residents or such transactions in

Malaysian currency;”; and

by inserting after the definition of “resident” the following definition:

‘ “shipping operations” means the transportation of passengers or cargo by sea or the letting out on charter of ships on a voyage or time charter basis;’.

Deletion of section 10a