Following the 2019 Budget Proposals which were announced by the Malaysian Finance Minister on 2 November 2018, the Finance Bill 2018 was tabled to incorporate the legislative amendments affecting revenue law. This year, the Finance Bill 2018 was passed by the House of Representatives on 10 December 2018 with Amendment in Committee (hereinafter referred to as “the amended Finance Bill 2018”). Essentially, some proposed revenue tightening measures announced in the Budget Proposals 2019 have been removed or modified.

 

The key changes resulting from the amended Finance Bill 2018 are summarised below:

 

Corporate Tax

 

1. Review of restriction on carry forward of losses and allowances

 

❖ The restriction on carry forward of unutilised capital allowances and investment tax allowance has been removed from the amended Finance Bill 2018.

 

❖ Effective from the year of assessment (YA) 2019, time limit is to be imposed on the carry forward of the following losses and allowances:

o Unabsorbed business losses – 7 consecutive YAs following the relevant YA
o Unutilised reinvestment allowance and investment allowance for services – 7 YAs after expiry of qualifying period
o Unabsorbed pioneer losses – 7 YAs after the YA in which the day post-pioneer
business falls