A new goods and services tax to go into effect in Sarawak by April 2015

 

BACKGROUND: Land use in Malaysia is governed by three pieces of legislation. In the states of Peninsular Malaysia, the applicable legislation is the National Land Code 1965; in Sabah the applicable law is the Sabah Land Ordinance; and in Sarawak the applicable legislation is the Land Code (Cap. 81) 1958.

SARAWAK LAND CODE: Identical to the Torrens Title, the Land Code implements a system of land title that only recognises registered land interests in land holdings maintained by the state. Registered proprietors of the land are conferred an indefeasible title, except in the case of fraud.

LAND USAGE & CLASSIFICATION: In Sarawak, land is largely used for agricultural, industrial, commercial and residential purposes. The Land ( Classification) Ordinance 1948 institutes a system of land classification by which all Sarawak land is administered. The categories of classification are: mixed zone land, native area land, native customary land, reserved land and interior area land.

Native area land can be transferred to any natives of Sarawak with a registered title document. The definition of a native is as defined in the Interpretation Ordinance. Native customary land is land that is held in customary rights, whether communal or otherwise. Reserved land is land reserved to the state government and, lastly, interior area land is land that does not fall within the definitions of any of the five other classifications.

Generally speaking, it is illegal for a non-native of Sarawak to acquire the rights or privileges over native area land, native customary land or interior area land. Mixed zone land is the only class of land that can be transferred to a person of any classification without any such restrictions. However, upon the declaration of the minister of housing, Amar Abang Johari Tun Openg, any native area land or interior area land shall become mixed zone land. The same is applicable for unalienated mixed zone land to become native area land or interior area land.

TENURE OF OWNERSHIP: Lands in Sarawak are either owned as freehold or leasehold. For leasehold lands, the term ranges from 999 years to 99 years, 90 years or 60 years. A registered proprietor may, at any time before the leasehold tenure expires, apply to the Land and Survey Department for a renewal or extension of the leasehold. A premium is required in this case. Extensions are usually granted, unless the land is acquired for government or public use.

FOREIGN PROPERTY INVESTMENT: As a general rule, for landed property, foreigners or any person who is not a Malaysian citizen and not permanently residing in Sarawak cannot hold or acquire estate, interest or right in any Sarawak land.

MINISTER’S CONSENT: Land may be acquired with the consent of the minister of housing by foreigners who meet the following criteria: Special development area (SDA): Foreign persons may acquire land within a special development (exemption from prohibition of foreign interests) area. The state authority may declare development for holiday resorts, recreational centres, high-rise commercial buildings, industrial estates, special residential areas for the accommodation of foreign investors or foreign workers, or any development under the Regional Corridors Development Authorities Ordinance 2006 to be an SDA. Condominiums: Foreign persons may also acquire any individual units of a building that have been subdivided pursuant to the Strata Title Ordinance. Such investments usually involve condominiums, apartments or high-rise buildings. Residential properties: Foreigners may acquire any land with buildings for residential purposes. The market value of the land and building must not be less than the amount determined by the Ministry of Housing Sarawak as per a direction published in the Gazette, the official portal for the publication of all federal legislation. The current minimum amount for the market value of land is RM300,000 ($91,260).

HOUSING DEVELOPMENT: Aiming to better protect the interests of home buyers and to reduce red tape and compliance costs, the Ministry of Housing has enforced the new Housing Development Ordinance (Control and Licensing) Ordinance 2013 and its relevant regulations.

SALES AND PURCHASE AGREEMENTS (SPA): The new SPA contained in the ordinance as Form B (for landed properties) and Form C (for strata title properties) will apply to the submission of applications by developers for licences received and acknowledged by the Ministry of Housing on and following November 1, 2014. As such, the new SPA will not be used for applications for licences issued before November 1, 2014. The old SPA contained in Form G and Form H under the Housing Developers ( Control and Licensing) Ordinance 1993 will therefore still apply to those developments.

KEY CHANGES: The new SPA specifies situations whereby the vendor-developer cannot charge interest on late payment of any instalment. It also protects the purchasers from liability to indemnify the vendor for additional fees or tax charges for completion of a project due to the introduction of new laws or the amendment of existing laws.

The defect liability period increased from 12 months to 18 months after the date when the purchaser takes vacant possession. Furthermore, the progress payment for housing development (Third Schedule) has been reviewed to meet current industry needs. Importantly, the revised SPA will require the purchaser to pay 10% of the purchase price to the developer upon signing of the SPA.

IMMIGRATION: Every person entering Malaysia must possess a valid passport or internationally recognised travel document that is valid for at least six months and is valid for travel to Malaysia. Anyone who is not in possession of a passport or travel document that is recognised by the Malaysian government must obtain a document in lieu of a passport.

The application for such a document can be made at any Malaysian Representative Office abroad. Travel documents such as a certificate of identity or a country’s certificate of permanent residence must ensure that the holder can return to the country that issued the said document or that the country of residence is guaranteed.

Foreign nationals requiring a visa to enter Malaysia must obtain a visa in advance at any representative office abroad prior to entering the country.

TYPES OF VISA: The Malaysian government issues three types of visas to foreign nationals: 1. Single entry – Issued to foreign citizens to enter Malaysia mainly for a social or business visit and is normally valid for a single entry for a period of three months from the issuance date.

2. Multiple entry – Issued to foreign citizens to enter Malaysia for business or intergovernmental matters and is normally valid for a period of 3-12 months from issuance date.

3. Transit visa – Issued to foreign citizens to enter Malaysia on transit to other countries. This visa is not required if international passengers do not leave the airport precincts to continue their journey.

OTHER PASSES: Long-term social visit passes will allow a foreigner to stay in Malaysia for a maximum period of six months.

Foreign spouses to Malaysians may be given this pass with a five-year validity period subject to compliance with requirements. Holding this pass will allow foreign spouses to engage in paid employment or in business without converting the social visit pass to the employment pass or visitor’s pass (temporary employment).

Professional visit passes are issued to foreigners who hold acceptable professional qualifications or specialist skills, and who are entering Malaysia to take up professional work for a maximum of 12 months.

A student pass is issued to any foreigner wishing to study in Malaysia. Foreign students are allowed to study in public or private institutions at which the courses have been approved by the Ministry of Higher Education. The intake of a foreign student must be approved by the Ministry of Home Affairs. Foreign students who have been offered a place at a public institute of higher learning are required to apply through the respective institutes.

ENTRY INTO SARAWAK: The formation of Malaysia in 1963 extended immigration requirements to the states of Sabah and Sarawak. The Immigration Act 1963 was enacted to protect the interests of both states. However, apart from regulating and monitoring the entry and exit of non-Malaysians, Sarawak also controls the entry of Peninsular Malaysians.

The federal government cannot veto the immigration control powers of the Sarawak state government except on security grounds or in the case of the entry of federal government employees from other parts of Malaysia into the state.

Hence, although the federal government has power over immigration into Malaysia from abroad, entry into Sarawak requires additional state government approval. Immigration authorities apply stamps for both entry and exit in all foreign passports and non-biometric Malaysian passports without microchips MALAYSIA MY SECOND HOME (MM2H): Since its initiation in 2004, the MM2H scheme has garnered a lot of interest, having an estimated 18,000 approved applicants and counting.

MM2H is a visa promoted by the Malaysian government to allow foreigners who meet specific criteria to reside in Malaysia for retirement purposes or an extended period of time on a social visit pass with a 10-year renewable multiple-entry visa. It is designed to bring foreign investments into the country by enabling foreigners to own property in Malaysia.

It should be noted, however, that the visa under this scheme does not qualify the applicant for permanent resident (PR) status. Also, the visa endorsement is given based on the applicant’s passport validity. If the passport is left with five years of validity, a five-year visa will be given despite the entitlement to a 10-year visa. The applicant will receive the balance upon renewal of the passport.

SARAWAK MM2H: In Sarawak, MM2H is managed by the Ministry of Tourism Sarawak, and MM2H and Sarawak MM2H differ in the application procedure. The terms and conditions for the two programmes vary slightly too. The following conditions are based on the Sarawak MM2H.

ELIGIBILITY: An individual from any country – with the exception of Israel and Montenegro – may apply. There is a minimum age requirement of 50 years for an applicant, although the age limit does not apply to the applicant’s spouse. If the applicant has children pursuing further education or undergoing long-term medical treatment in Sarawak, the age limit is reduced to a minimum of 30 years.

Applicants are also required to show proof of monthly offshore income or government-approved funds of RM10,000 ($3042) for a married couple or RM7000 ($2129) for a single applicant. They may opt to open a fixed deposit account of RM150,000 ($45,630) at any financial institution in Malaysia.

Additionally, an applicant must be sponsored by a Malaysian from Sarawak or a Sarawak PR. The sponsor acts as the guarantor for the applicant and he or she must not be associated with the Land Authority, Tourism Authority or a government hospital.

USAGE OF AGENTS: Unlike other states in Malaysia, the use of agents, middlemen or consultant firms to apply for the MM2H scheme is prohibited. Such agencies cannot act as an applicant’s sponsor.

OTHER CONDITIONS: While residing in Malaysia under the MM2H programme, successful applicants are not permitted to obtain employment or operate a business unless they receive written permission from the state authority. Naturally, they are expected not to participate in activities that may disturb the peace and harmony of the country. Additionally, a fixed deposit account must be maintained.

HOUSE PURCHASE: Participants of this scheme are allowed to purchase residential houses at a minimum price of RM300,000 ($91,260) each in the designated areas of Kuching, Sibu and Miri. Such properties are exempt from the approval of the Foreign Investment Committee. However, approval from the state authority is still required.

RESTRICTIONS: Participants may purchase any category of residential property except low-cost and low-cost plus units as determined by the state authority, all properties built on native land, and units reserved for individuals of the Bumiputera ethnic group as part of the quota system.

CAR PURCHASE: Participants may either import their personal cars from their countries of residence if the cars already belonged to them prior to applying for the MM2H scheme, or purchase a locally assembled car without import duty charges, excise duty and sales tax (to be replaced by the GST in April 2015). Applications for tax exemptions must be done online, as manual applications are not accepted.

FAMILY: Applicants are permitted to bring their spouses and dependent (unmarried) children below 18 years of age. There is a formal requirement that applicants with a dependent child turning 21 years old must apply at least six months before the dependent’s birthday. Hence, it is generally advised that applicants in such circumstances apply a year ahead to avoid the time lapse if the original application is unsuccessful and a resubmission is needed.

EDUCATION: A participant’s children who wish to continue their education in Malaysia need to apply for a student pass and should be insured throughout their stay under the scheme.

TAX EXEMPTION: Although participants are bound by Malaysia’s tax policies, systems and regulations, and are not given the exemption qualifications as granted to diplomatic missions in Malaysia, pensions remitted in Malaysia are exempt from tax.

MINIMUM WAGE POLICY: In an effort to increase productivity and the country’s national income, the Minimum Wages Order 2012 was introduced and subsequently implemented in 2013. The order ensures that employees in Malaysia have the right to a minimum basic wage. In Peninsular Malaysia the minimum wage is RM900 ($273), whereas in Sarawak, Sabah and Labuan it is RM800 ($243).

NO CONSENT BELOW MINIMUM WAGE: Employees are unable to consent to be paid less than the minimum wage. Even if they do, the employer is punishable by law. For a first offence, the fine is not more than RM10,000 ($3042) per employee. For a repeated offence, the employer is liable to a fine of no more than RM20,000 ($6084) or an imprisonment term of no more than five years.

The court also has the discretion to order the employer to pay each employee the difference between the minimum wage rate and the employee’s basic wages paid. The employer also must not use the order to pay employees less than the wage that was agreed upon in the contract of service.

PROBATION OF LOCAL EMPLOYEES: The wages of employees on probation may be lower than the minimum wage but not more than 30% less. This means that a probationer’s minimum wage is RM630 ($191) for Peninsular Malaysia and RM560 ($170) for Sarawak, Sabah and Labuan.

Nevertheless, the 30% lower minimum wage can only hold for six months of the employee’s probation period. Thus, if the probation period is one year, the reduced wage is applicable for the first six months only. For the remaining six months of the probation period, the employee’s wage is to be increased to the minimum wage rate or higher.

It should be noted that as of July 1, 2013, a probation period is not applicable to foreign employees holding a visitor’s pass (temporary employment). Hence, employers who intend to employ foreign employees must comply with this condition.

NON-APPLICABLE EMPLOYEES: The order does not, however, apply to apprentices or domestic servants, for example, house maids, gardeners and personal drivers, as defined in Section 2 of the Sarawak Labour Ordinance [Cap. 76].

GOODS & SERVICES TAX (GST): After more than two decades of debate and a debut mentioned in the 2005 national budget, the 2014 budget confirmed and set in motion the implementation of the GST by April 1, 2015 at the initial rate of 6%. A transitional period of 17 months was given in order to help the nation, especially business entities, cope with and ease the change in systems. Malaysia will join the ranks of numerous countries that have implemented either value-added tax or GST, following Laos (2009), Congo (2012) and The Gambia (2013).

Briefly, the GST is a comprehensive form of indirect consumption tax, which, like the corporate income tax or the individual income tax, serves to generate government tax revenues. The Goods and Services Tax Act 2014 (GST Act) repeals the Sales Tax Act 1972 (STA 1972) and the Service Tax Act 1975 (STA 1975). Hence, the GST will replace and abolish the existing sales and services tax.

The current sales and services tax is riddled with problems, including cascading tax, double tax, pyramiding tax and tax evasion. As a far more comprehensive and transparent tax system, the GST system is capable of overcoming those weaknesses.

THREE TYPES OF SUPPLY: The GST system involves categorising the supply of goods and services into three categories: standard-rated supply, zero-rated supply and exempt supply. Standard-rated supply refers to goods and services that will carry the prevailing GST. Zero-rated supply is goods and services that are charged 0% GST. Goods and services in the exempt supply list are exempt from GST. The first two categories are termed taxable supply, while the latter is non-taxable supply.

EXPORTS: Exports will be zero rated, allowing the exporter to recover all the input tax incurred by their business. With the cost of the GST removed, it will give Malaysian exports a more competitive edge.

GST-FREE ITEMS: The exempt supply includes land used for residential, agricultural or general use; residential buildings; financial services; private education services; child care services; private health care services; transport services, tolled highways or bridges; funeral, burial and cremation services; and supplies made by societies and similar organisations.

ZERO-RATED SUPPLY: This includes agriculture products; essential foodstuffs such as rice and plain flour; livestock supplies; poultry; eggs; seafood supplies such as fish, prawns and crabs; and supply of treated water to domestic consumers (but not distilled, de-ionised, oxygenised or mineral water).

Following the 2015 budget, the government widened the scope of 0% GST items to include all types of fruits, whether local or imported; white bread and whole-meal bread; coffee powder, tea dust and cocoa powder; certain types of noodles; the National Essence Medicine (which encompasses almost 2900 medicinal brands); as well as reading materials and newspapers. Furthermore, the supply of the first 300 units of electricity to a domestic household will be GST free and this will benefit about 70% of Malaysian households. Consumers also do not need to pay GST for the retail sale of RON 95 petrol, diesel and liquefied petroleum gas.

CONVERSION OF SUPPLY: Although for consumers, zero-rated supply and exempt supply seem to bear no difference, as both types of supply do not carry GST, the difference is significant for businesses. If the goods and services sold by a business are zero-rated supply, the business can claim credit from the government for the GST paid on their inputs, but if the supply is GST exempt, the business cannot claim such credits. Consequently, the business will have to bear the cost of the GST on their inputs, as they cannot impose GST on buyers for exempt supply.

Another major difference between the zero-rated supply and exempt supply is that the conversion of status can happen for zero-rated items, but not exempt-supply items. For example, coffee powder is a zero-rated item, thus where a buyer purchases the coffee powder, no GST is charged.

However, if the coffee powder is purchased, turned into mugs of coffee and then served in a café, the coffee powder is thereby converted into a standard-rated item. The consumer at the café will then be charged the GST due to the conversion of supply. However, if the café exports its coffee beverages, they become zero-rated supplies because the export of goods and services is zero rated.

The conversion of status does not, however, apply to exempt supplies. Notably, most zero-rated supplies include basic food goods, whereas most exempt supplies are essential services. Therefore, because services normally get consumed in a business, the conversion does not generally occur.

Where it does occur, the exempt status is still retained. This is the case when residential land is converted into a house. Despite the conversion, a developer cannot impose the GST on the end consumer.

IMPACT OF GST: Out of the 944 goods listed in the consumer price Index (CPI), the prices of 532 items are expected to be reduced by up to 4.1%. Such goods include medicines, household electrical appliances, textile products, plastic products, household furniture and essential foodstuffs. On the other hand, roughly 354 goods and services may be subject to a price increase of no more than 5.8%.

ON PROPERTY: Tax consultants forecast that the GST will cause an overall price increase. The effect, however, would be more on commercial property and less on residential property. This is because properties built on residential land are exempt from the GST, hence, buyers cannot be charged by developers. The GST paid for building materials and services will have to be absorbed by the developers. Depending on how the market fares, it may mean that developers make less profit.

There are suggestions about categorising residential properties as zero-rated supply. This will enable developers to claim the GST while not imposing it on buyers by having the government return to the developer the input tax incurred on materials and services. This would, in turn, mean the loss of a source of revenue for the government. In an attempt to find a middle ground, it is proposed that properties valued at RM500,000 ($152,100) or less be zero rated. The outcome of the proposal is still unknown.

It is also unclear whether buyers will have to pay the GST for residential units built on commercial titles. Unquestionably, shopping malls and offices are subject to the GST, but it is less clear in this scenario. Hybrid units such as small office/home office (more commonly known as SoHo) may also present complications, as they do not fit fully into either the residential or commercial property category.

Theoretically, the GST will be imposed on buyers for property built on commercial titles despite the government leaning towards the purpose of the property rather than the land title the property is built on to determine the GST charges. With time, there should be more clarity on this.

GST REGISTRATION: Businesses with annual sales of taxable supply of more than RM500,000 ($152,100) must be registered under the GST. Businesses below the prescribed threshold do not need to register but may do so voluntarily. Thus, small businesses such as night market operators would not be affected and do not need to register if their annual turnover does not exceed RM500,000 ($152,100).

Suppliers must be aware of the technicality between zero-rated supply and exempt supply. Zero-rated supplies count towards the RM500,000 ($152,100) threshold and thus trigger the GST registration, while exempt supplies do not count towards the threshold because they are non-taxable.

LATE REGISTRATION PENALTIES: If a person or business is liable to be registered but fails to do so, the Director General of Customs and Excise will register the person or business on the date no earlier than the date their liability to be registered is known. The person or business will also be liable to pay a late registration penalty of no less than RM1500 ($456) for a period within 30 days and no more than RM20,000 ($6084) for a period exceeding 360 days.

Where a person has ceased to be registrable, they can make a request in writing to the director general to cancel their registration from a date approved by the director general.

INCENTIVES & ASSISTANCE FOR BUSINESSES: undefined There are concerns that the new GST system will increase compliance costs within businesses. The 2015 budget addresses such concerns and is geared towards assisting businesses in their smooth transition to the GST system. The government will provide incentives and assistance, including a training grant of RM100m ($30.42m) for businesses for their employees to attend GST courses, financial assistance amounting to RM150m ($45.63m) for small and medium sized-enterprises (SMEs) to purchase accounting software, accelerated capital allowance on the purchase of ICT equipment and software, and additional tax deductions for expenses incurred by the business for training performed in accounting and ICT relating to the GST.

HELPING THE CONSUMERS: A Customs call centre has been set up by the government for the public’s convenience to make inquiries about the GST. An official website for the Malaysia GST has been created specifically to disseminate information on the GST in order to educate the public and ensure high compliance when the GST comes into effect.

The government plans to distribute a shopper’s guide three months before and after the GST is implemented. It will inform buyers of the estimated percentage increase or reduction of the price of goods and services. Such awareness will help people exercise their consumer rights.

TOURIST REFUND SCHEME (TRS): Aimed at boosting the tourism industry and tourism spending in Malaysia, the TRS has been proposed as part of the GST regime. It allows international tourists to claim refunds on the amount of GST paid during their visit for standard-rated goods that are taken out of the country with the tourist when he or she departs.

CONDITIONS FOR REFUND: A tourist qualifies for a refund under the TRS only when a minimum of RM300 ($91) inclusive of the GST is spent in the same TRS- approved outlet. Multiple tax invoices or receipts for purchases made on different days from the same outlet are permitted if they meet the RM300 ($91) threshold. Another condition is that the tourist must leave the country via an international airport with the goods in hand within three months of the purchase date. The goods must either be in the tourist’s hand luggage or checked baggage.

The TRS does not apply to tourist services such as accommodation and car rental. Additionally, alcoholic products such as wine, spirits and beer, as well as tobacco products and jewellery, are not eligible for a refund. The TRS also does not apply to consumable goods that a tourist has consumed or partially consumed while still in the country, such as chocolates and perfumes. Tourists who wish to claim refunds must ensure that the packaging of the goods is intact. However, non-consumable goods such as cameras and watches can be used and remain eligible for the GST refund.

AVAILABLE MODES FOR REFUNDS: Whether the purchase is made by the tourist through cash payment or credit card, the tourist can opt to have the refund paid by any available mode, which includes payment through a credit card, payment in cash to a maximum of RM300 ($91), payment through a bank account or payment through a bank cheque.

INSPECTION FOR REFUND: At the GST Customs Refund Inspection Counter, a tourist who wishes to claim GST refunds needs to present the original tax invoice or tax issued by the approved outlet operator, his or her international passport, his or her international boarding pass or other proof of travel, and the goods that qualify for the GST refund upon the request of a Customs officer.

TAX INVOICE: A tax invoice provides the Royal Malaysian Customs Department (RMCD) with the necessary information to authenticate the sale and identify the goods for the payment of refund. The tax invoice issued for the purposes of the TRS must contain the invoice number, the GST-inclusive price of the goods, the words “tax invoice” stated clearly, the issuance date, the name of the approved outlet operator, a description of each and every item purchased, and a similar statement for the total price of the goods inclusive of the GST.

REFUNDABLE AMOUNT: Any amount can be claimed under the TRS as long as the claim is supported by a tax receipt or tax invoice. While there is no maximum amount that tourists can claim, if refunds are claimed using tax receipts, the amount refundable is limited to RM30 ($9) in the GST per receipt. Hence, if purchasing goods with the value of more than RM500 ($152) and therefore above RM30 ($9) in GST, it is advisable for the tourist to request a tax invoice.

ENFORCING THE GST: The GST Act confers broad powers to senior officers of the GST, similar to the powers of police officers in relation to enforcement, inspection and investigation, in addition to the powers provided under the act. Among the powers for the purposes of the act, any GST senior officer has full access to business premises at all times, may search and seize goods or documents, and may make arrests for an offence under the act. To police the police of this act, any person appointed to the administration of the act who illegally deals with any portion of the tax or penalties collected is liable to a maximum fine of RM50,000 ($15,210) or to a maximum prison term of three years, or both.

HEAVIER PUNISHMENTS: The GST Act generally prescribes heavier fines and penalties for breach of the act. Indeed, the penalty for tax evasion for firsttime offenders is a fine of not less than 10 times and not more than 20 times the amount of tax, or a prison term not exceeding five years, or both.

For subsequent offences, the repeat offender is liable to a fine of not less than 20 times and not more 40 times the amount of tax, or to a prison term not exceeding seven years, or both.

OTHERS: To ensure businesses pass on the benefits of their cost savings to consumers, the government will enforce the provisions of the Price Control and Anti-Profiteering Act 2011. Under this act, the Ministry of Domestic Trade, Cooperatives and Consumerism can regulate and take specific action against excessive profiteering from price increasing.

OTHER TAX ADMENDMENTS: With the reduction of individual income tax rates by 1-3%, 300,000 individual taxpayers will no longer pay income tax. The cooperative income tax rate and the tax rate for SMEs will be reduced by 1% (from 25% to 24%, and 20% to 19%, respectively) for 2016 onwards.

REAL PROPERTY GAIN TAX (RPGT): This is a tax imposed on the net gains from the disposal of real property, such as residential and commercial buildings. It is also applicable to the disposal of rights or interests in a property, as well as shares in real property companies. In 2014 for individuals listed as citizens and PRs, the RPGT was increased to 30% for the disposal of property within three years from the date of acquisition, and from 10% to 20% within the fourth year of disposal, and from 10% to 15% for the fifth year. Disposal of property within the sixth year or later will attract 0% in RPGT.

For individuals who are not citizens, the RPGT is 30% within the five years of disposal of property, and 5% for disposal after the fifth year from the acquisition date. For companies, the RPGT is 30% within three years of disposal; 20% within the fourth year; 15% within the fifth year; and 5% after the fifth year from the acquisition date.

Following the 2015 budget, the RPGT for special categories of donor and recipient is affected in terms of the rules on acquisition price of property for recipients of properties disposed by way of love, gift and affection between spouses, parent and child, and grandparent and grandchild.

Currently, such gift transactions receive no gain and suffer no loss on disposal, and the recipient acquires the property at the donor’s acquisition price. However, effective January 1, 2015, if the donor is a citizen or a PR and the gift is made within five years from the donor’s acquisition date, the recipient’s acquisition price is the donor’s purchase price plus permitted expenses incurred by the donor. If the gift is made after five years, the recipient’s acquisition price of property will be the market value of the property instead of the donor’s acquisition price. If the donor is not a citizen or a PR, the acquisition price of the recipient is the donor’s purchase price in addition to permitted expenses incurred by the donor.

You have reached the limit of premium articles you can view for free. 

Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.

If you have already purchased this Report or have a website subscription, please login to continue.

The Report: Sarawak 2015

Legal Framework chapter from The Report: Sarawak 2015

Articles from this chapter

This chapter includes the following articles.
The Report: Sarawak 2015

The Report

This article is from the Legal Framework chapter of The Report: Sarawak 2015. Explore other chapters from this report.