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LAWS OF MALAYSIA
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Act 600

FINANCE ACT 2000

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 2000

Date of Royal Assent…… … … … … 30 May 2000

Date of publication in the Gazette … … 15 June 2000

PREVIOUS REPRINT

First Reprint ... ... ... ... ... 2001

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3
LAWS OF MALAYSIA

Act 600

FINANCE ACT 2000

ARRANGEMENT OF SECTIONS

CHAPTER I

PRELIMINARY

Section

1. Short title
2. Amendments of Acts

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 46
6. Amendment of section 49
7. Substitution of section 50
8. Deletion of section 60D
9. Amendment of section 101
10. Amendment of section 102
11. Amendment of section 107B
12. Amendment of Schedule 1
13. Amendment of Schedule 3
14. Amendment of Schedule 5
15. Amendment of Schedule 6

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4 Laws of Malaysia ACT 600

CHAPTER III

AMENDMENTS TO THE PETROLEUM

(INCOME TAX) ACT 1967

Section
16. Commencement of amendments to the Petroleum (Income Tax) Act
1967
17. Amendment of section 13 A
18. Amendment of Second Schedule

CHAPTER IV

AMENDMENTS TO THE STAMP ACT 1949

19. Commencement of amendments to the Stamp Act 1949

20. Amendment of First Schedule
21. Amendment of Second Schedule

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Finance 5
LAWS OF MALAYSIA

Act 600

FINANCE ACT 2000

An Act to amend the Income Tax Act 1967, the Petroleum (Income
Tax) Act 1967 and the Stamp Act 1949.

[ ]

ENACTED by the Parliament of Malaysia as follows:

C HAPTER I

PRELIMINARY

Short title

1. This Act may be cited as the Finance Act 2000.

Amendments of Acts

2. The Income Tax Act 1967 [Act 53], the Petroleum (Income
Tax) Act 1967 [Act 543] and the Stamp Act 1949 [Act 378] are
amended in the manner specified in Chapters II, III and IV
respectively.

C HAPTER II

AMENDMENTS TO THE INCOME TAX ACT 1967

Commencement of amendments to the Income Tax Act 1967

3. (1) The amendments in sections 5, 6, 7, 8, 11, 12 and 15 shall

have effect for the year of assessment 2000 in respect of the basis
period ending in the year 2000 (current year basis) and subsequent
years of assessment.

(2) The amendments in sections 4, 9, 10 and 14 shall have

effect upon the coming into operation of this Act.

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6 Laws of Malaysia ACT 600

(3) The amendments in section 13 shall have effect for the year
of assessment 2000 in respect of the basis period ending in the
year 1999 (preceding year basis) and subsequent years of assessment.

Amendment of section 2

4. The 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 “market value” the following definition:

‘ “Minister” means the Minister for the time being charged

with the responsibility for finance;’.

Amendment of section 46

5. Subsection 46(1) of the principal Act is amended—

(a) by substituting for paragraph (a) the following paragraph:
“(a) eight thousand ringgit for that individual in respect
of himself and his dependent relatives (if any), or
for that Hindu joint family;”;
(b) by deleting paragraph (b); and
(c) in the further proviso to paragraph (g), by inserting after
the word “income” the words “, any amount expended by
the wife in that basis year shall be deemed to have been
expended by that individual and”.

Amendment of section 49

6. Section 49 of the principal Act is amended—

(a) in paragraph (1)(a), by inserting after the word “annuity”
the words “other than an insurance policy to which
subsection (1C) applies”;
(b) in subsection (1A), by substituting for the words “section
50(3)(b) or (c)” the words “subsection 50(2) or 50(3)”;
(c) in subsection (1B )—
(i) in paragraph (a), by substituting for the word “two”
the word “three”;

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Finance 7
(ii) in paragraph (b)—
(A) by substituting for the words “section
50(3)(b)” the words “subsection 50(2)”; and
(B) by substituting for the word “two” the word
“three”; and
(iii) in the proviso, by substituting for the word “two”
the word “three”;
(d) by inserting after subsection (1B) the following subsection:
“(1C ) In the case of an individual resident for the
basis year for a year of assessment who in that basis
year has utilized any amount standing to his credit in
the Employees Provident Fund to purchase an insurance
policy determined by the Employees Provident Fund
Board, there shall be allowed for that year of assessment
a deduction of one thousand ringgit and where subsection
50(2) applies there shall be allowed for that year of
assessment, in addition to the deduction already allowed
under this subsection, a deduction of one thousand
ringgit:
Provided that where the wife has no total income the
total deduction under this subsection shall not exceed
one thousand ringgit.”; and
(e) in subsection (3), by substituting for the words ‘this
section “insurance” and “deferred annuity”, in relation to
an individual claiming a deduction under subsection (1),’
the words ‘relation to an individual claiming a deduction
under subsection (1), “insurance” and “deferred
annuity” ’.

Substitution of section 50
7. The principal Act is amended by substituting for section 50
the following section:

“Application of section 49 where husband and wife are

living together

50. (1) Where an individual who is resident for the basis

year for a year of assessment has a wife living together with
him at any time in that basis year, and they did not in that
basis year—
(a) cease to live together; or

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8 Laws of Malaysia ACT 600

(b) cease to be husband and wife of each other,

the application of section 49 to that individual shall be subject

to this section.

(2) Where the wife makes an election under subsection

45(2) or where the wife has no total income for the year of
assessment, any premium for any insurance or deferred annuity
within the meaning of subsection 49(3), or for any insurance
on education or medical benefits within the meaning of
subsection 49(4), or for any insurance policy determined by
the Employees Provident Fund Board referred to in subsection
49(1C ) which has been paid by the wife in that year shall be
deemed to have been paid by the husband.

(3) Where subsection 45(2) applies to the husband and the

wife for the year of assessment and in that year the wife has
made or suffered the making of a contribution as an employee
to an approved scheme or as a self-employed person within
the meaning of the Employees Provident Fund Act 1991
[Act 452] to the Employees Provident Fund—
(a) the contribution shall be deemed to have been made by
the husband in that year; and
(b) the reference to a contract of employment in paragraph
49(2)(a) shall be deemed to include a reference to a
contract of employment of the wife.”.

Deletion of section 60 D

8. The principal Act is amended by deleting section 60D.

Amendment of section 101

9. Section 101 of the principal Act is amended—

(a) in subsection (1), by substituting for the words “may
review” the words “shall, within twelve months from the
date of receipt of the notice of appeal, review”; and
(b) by inserting after subsection (1) the following subsections:

“(1A) Where the Director General requires a period

longer than twelve months to carry out the review
under subsection (1), the Director General may apply

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Finance 9
to the Minister for an extension of that period not later
than thirty days before the expiry of the twelve month
period.

(1B) On receipt of an application under subsection

(1A), the Minister may grant such extension as he thinks
proper and reasonable in the circumstances provided
that such extension shall not exceed a period of six
months from the date of expiry of the twelve-month
period.

(1C) The decision of the Minister under subsection

(1B) shall be notified in writing to the Director General
and shall be final.”.

Amendment of section 102

10. Section 102 of the principal Act is amended—
(a) in subsection (1), by inserting after the words “at any
time” the words “within the twelve-month period from
the date of receipt of the notice of appeal or, if an extension
under subsection 101(1B) has been granted, within the
extended period”; and
(b) by deleting subsection (2).

Amendment of section 107 B

11. The proviso to subsection 107B(2) of the principal Act is
amended by substituting for the words “fifteenth day of April” the
words “thirtieth day of June”.

Amendment of Schedule 1
12. Schedule 1 to the principal Act is amended—
(a) in Part I—
(i) in paragraph 1, by substituting for the existing
rates the following rates:

“Chargeable Income RM Rate of

Income Tax

For every ringgit of the first 2,500 0 per cent

For every ringgit of the next 2,500 1 per cent

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10 Laws of Malaysia ACT 600

Chargeable Income RM Rate of
Income Tax
For every ringgit of the 5,000 3 per cent
next

For every ringgit of the 10,000 5 per cent

next

For every ringgit of the 15,000 9 per cent

next

For every ringgit of the 15,000 15 per cent

next

For every ringgit of the 20,000 20 per cent

next

For every ringgit of the 30,000 25 per cent

next

For every ringgit of the 50,000 28 per cent

next

For every ringgit exceeding 150,000 29 per cent”;

and
(ii) in paragraph 1A, by substituting for the words “30
per cent” the words “29 per cent”; and

(b) in Part IV, by substituting for the existing rates the following
rates:

Chargeable Income RM Rate of

Income Tax

For every ringgit of the 10,000 0 per cent

first

For every ringgit of the 10,000 1 per cent

next

For every ringgit of the 10,000 4 per cent

next

For every ringgit of the 10,000 7 per cent

next

For every ringgit of the 10,000 10 per cent

next

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Chargeable Income RM Rate of
Income Tax
For every ringgit of the next 25,000 13 per cent

For every ringgit of the next 25,000 17 per cent

For every ringgit of the next 50,000 21 per cent

For every ringgit of the next 100,000 24 per cent

For every ringgit of the next 250,000 27 per cent

For every ringgit exceeding 500,000 29 per cent”.;

Amendment of Schedule 3

13. Schedule 3 to the principal Act is amended—

(a) by inserting after paragraph 16 the following paragraph:

“16A. Subject to this Schedule, where a person has

incurred qualifying building expenditure on the
construction of a building to which paragraph 67B applies
and at the end of the basis period for a year of assessment
the building was on lease to the Government, there
shall be made to him in relation to the income from
that lease for that year an allowance equal to three-
fiftieths or such other fraction as may be prescribed of
that expenditure.”;
(b) in subparagraph 65(3), by substituting for the word “A”
the words “Subject to paragraph 67B , a”; and
(c) by inserting after paragraph 67A the following paragraph:

“67B. (1) A building constructed by a person pursuant

to an agreement entered into between that person and
the Government on a build-lease-transfer basis shall,
subject to the approval of the Minister, be treated as
an industrial building for the purposes of this Schedule.

(2) Where subparagraph (1) applies—

(a) the balance of residual expenditure under
paragraph 68 of this Schedule shall be reduced
by the amount of any compensation received;
and

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12 Laws of Malaysia ACT 600

(b) the disposal value of the asset shall be taken

to be zero when the agreement expires or is
terminated.”.

Amendment of Schedule 5
14. Schedule 5 to the principal Act is amended—
(a) in paragraph 42—
(i) by substituting for the words “to the Supreme
Court” the words “to the Court of Appeal and the
Federal Court”; and
(ii) by substituting for the words “and the Supreme
Court” the words “, the Court of Appeal and the
Federal Court”;
(b) in the part headed “Supplemental provisions”, by inserting
before paragraph 43 the following paragraph:

“42 A. Where any matter of procedure or practice is

not provided for in this Schedule, the procedure and
practice for the time being in force or in use in the
subordinate court or in the High Court, as the case may
be, shall be adopted and followed with the necessary
modifications.”; and
(c) in paragraph 45—
(i) by substituting for the words “or the Supreme
Court” the words “, the Court of Appeal or the
Federal Court”; and
(ii) in subparagraph (b), by substituting for the words
“or the Supreme Court” the words “, the Court of
Appeal or the Federal Court”.

Amendment of Schedule 6
15. Schedule 6 to the principal Act is amended—
(a) in paragraph 32A—
(i) by inserting after the word “assessment,” the word
“derived”; and
(ii) by deleting the words “any musical composition
or in respect of”; and

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(b) by inserting after paragraph 32C the following paragraph:

“32D. Income of twenty thousand ringgit for the basis

year for a year of assessment, derived by an individual
resident in Malaysia, being payment in respect of any
musical composition:

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.”.

CHAPTER III

AMENDMENTS TO THE PETROLEUM (INCOME TAX)

ACT 1967

Commencement of amendments to the Petroleum (Income Tax)

Act 1967

16. (1) Except for paragraphs 18(a), (b), (c) and (d), the amendments
in sections 17 and 18 shall have effect for the year of assessment
2000 and subsequent years of assessment.

(2) The amendments in paragraphs 18(a), (b), (c) and (d) shall
be deemed to have effect for the year of assessment 1996 and
subsequent years of assessment.

Amendment of section 13A

17. The Petroleum (Income Tax) Act 1967, which in this Chapter
is referred to as the “principal Act”, is amended in section 13 A by
inserting after subsection (1) the following subsection:

“(1A) Subsection (1) shall not apply where a chargeable

person (in this subsection referred to as the “disposer”) disposes
of an asset in relation to which an initial or annual allowance
has been made or would have been made, if claimed, to him
(in this subsection referred to as the “asset”) and that asset
continues to be used for petroleum operations by another
chargeable person (in this subsection referred to as the
“acquirer”) in another petroleum agreement under which the

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14 Laws of Malaysia ACT 600

acquirer has not incurred qualifying expenditure in respect of

that asset and at the time of the disposal—
(a) the disposer of the asset is a company and the acquirer
of the asset is a partnership in which the disposer is also
a partner;
(b) the disposer of the asset and the acquirer of the asset
are the same partnership but operating under separate
petroleum agreements;
(c) the disposer of the asset and the acquirer of the asset
are partnerships and all the partners in the partnership
that is disposing of the asset are also partners in the
partnership that is acquiring the asset; or
(d) the disposer of the asset and the acquirer of the asset
are the same company but operating under separate
petroleum agreements.”.

Amendment of Second Schedule

18. The Second Schedule to the principal Act is amended—

(a) in paragraph 8—
(i) by substituting for the words “subparagraph 2(c)”
the words “subsubparagraph 2(1)(c)”;
(ii) in subsubparagraph (a), by inserting after the words
“forty per cent” the words “or such other rate as
may be prescribed”; and
(iii) in subsubparagraph (b), by inserting after the words
“twenty per cent” the words “or such other rate
as may be prescribed”;
(b) in paragraph 12—
(i) in subparagraph (1)—
(A) by substituting for the word “ot” the word
“to”;
(B) by substituting for the words “subparagraph
2(c)” the words “subsubparagraph 2(1)(c)”;
(C) in subsubparagraph (a), by inserting after
the words “ten per cent” the words “or
such other rate as may be prescribed”; and

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(D) in subsubparagraph (b), by inserting after
the words “eight per cent” the words “or
such other rate as may be prescribed”; and
(ii) in subparagraph (2)—
(A) by substituting for the words “subparagraph
2(c)” the words “subsubparagraph 2(1)(c)”;
and
(B) by inserting after the words “ten per cent”
the words “or such other rate as may be
prescribed”;
(c) in paragraph 13, by inserting after the words “two per
cent” the words “or such other rate as may be prescribed”;
(d) in subparagraph 14(1), by inserting after the word “fraction”
the words “or such other fraction as may be prescribed”;
(e) by inserting after paragraph 21 the following paragraph:

“21 A. Paragraphs 22 and 23 A shall apply where a

chargeable person (in this paragraph referred to as the
“disposer”) disposes of an asset in relation to which
an initial or annual allowance has been made or would
have been made, if claimed, to him (in this paragraph
referred to as the “asset”) and that asset continues to
be used for petroleum operations by another chargeable
person (in this paragraph referred to as the “acquirer”)
in another petroleum agreement under which the acquirer
has not incurred qualifying expenditure in respect of
that asset and at the time of the disposal—
(a) the disposer of the asset is a company and the
acquirer of the asset is a partnership in which
the disposer is also a partner;
(b) the disposer of the asset and the acquirer of the
asset are the same partnership but operating
under separate petroleum agreements;
(c) the disposer of the asset and the acquirer of the
asset are partnerships and all the partners in the
partnership that is disposing of the asset are
also partners in the partnership that is acquiring
the asset; or

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16 Laws of Malaysia ACT 600

(d) the disposer of the asset and the acquirer of the

asset are the same company but operating under
separate petroleum agreements,
the disposer of the asset, the asset in question and the
acquirer of the asset being in those paragraphs referred
to as the disposer, the asset and the acquirer respectively.”;
(f) in subparagraph 22(1), by inserting after the words
“paragraph 23” the words “or 23A”;
(g) by inserting after paragraph 23 the following paragraph:

“23A. The acquirer shall be deemed to have incurred

qualifying expenditure in relation to the asset of an
amount equal to the sum ascertained under paragraph
22 and in relation to the asset—
(a) the date on which the acquirer shall be deemed
to have incurred the expenditure;
(b) the withdrawal of any allowance which would
but for paragraph 22 and this paragraph fall to
be made to the disposer;
(c) the amount of any allowance or charge to be
made to or on the acquirer; and
(d) such other matters as may be considered necessary
by the Minister,

shall be determined in such manner as may be prescribed

by rules to be made for the purposes of paragraphs 21 A
and 22 and this paragraph.”; and
(h) in subsubparagraph 41(b), by inserting before the word
“where” the words “subject to subparagraph 22(1),”.

CHAPTER IV

AMENDMENTS TO THE STAMP ACT 1949

Commencement of amendments to the Stamp Act 1949

19. (1) The amendment in section 20 shall be deemed to have

come into operation on 30 October 1999.

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(2) The amendment in section 21 shall have effect upon the
coming into operation of this Act.

Amendment of First Schedule

20. The Stamp Act 1949, which in this Chapter is referred to as

the “principal Act”, is amended in the First Schedule by inserting
after item 49 the following item:

Item Description of Instrument Proper Stamp Duty

“49A. LEASE OR AGREEMENT FOR The same ad valorem

LEASE UNDER THE PRINCIPLES duty as upon a charge
OF AL-IJARAH of the Syariah or mortgage for such
law for the purpose of financing total amount.”.
or securing repayment of money

Amendment of Second Schedule

21. The Second Schedule to the principal Act is amended by

inserting after item 18 the following item:

Nature of Instrument and the Item Person required to cancel the

Number thereto in First Schedule adhesive stamp

“19. SECURITY BOND furnished An immigration officer”.

to the Director General of
Immigration in connection
with the grant of a Professional
Visit Pass for an Artiste, a
Social Visit Pass and a Work
Permit Pass – No. 25

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18 Laws of Malaysia ACT 600

LAWS OF MALAYSIA

Act 600

FINANCE ACT 2000

LIST OF AMENDMENTS

Amending law Short title In force from

– NIL –

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Finance 19
LAWS OF MALAYSIA

Act 600

FINANCE ACT 2000

LIST OF SECTIONS AMENDED

Section Amending authority In force from

– NIL –

DICETAK OLEH
PERCETAKAN NASIONAL MALAYSIA BERHAD,
KUALA LUMPUR
BAGI PIHAK DAN DENGAN PERINTAH KERAJAAN MALAYSIA

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