Tax Matters – Taxing investment holding company now redundant

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'It is about time that this piece of legislation under Section 60F be removed because it is redundant and is only adding to the cost of doing business.' theSun theSundaily SunBiz businessnews taxmatters Malaysia

original intention of introducing a specific provision to deal with investment holding companies in 1993 has disappeared because the main income of an investment holding company – dividend income – is no longer taxable in the hands of the IHCs.

On the converse, if the expense exceeded the dividend income, you could get a refund of Section 108 credits. To prevent excessive claims for refunds, the authorities enacted Section 60F which severely restricted expenses of investment holding companies.Now, any expenses relating to dividend income will be disregarded; therefore the original issue of attempting to overclaim expenses against dividend income or obtaining refunds is no longer present.

It is about time that this piece of legislation under Section 60F be removed because it is redundant and is only adding to the cost of doing business.

 

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