Discuss & Explain the advantages on removing the Section 3, Para 28 , ITA 1967. Malaysia adopts

Discuss & Explain the advantages on removing the Section 3, Para 28 , ITA 1967.

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Malaysia adopts territorial principle of taxation in that only income accruing in or derived from or received in Malaysia is subject to income tax pursuant to Section 3, Para 28 of the ITA 1967. With effect from YA 2004 tax exemption had been given to "income received in Malaysia from outside Malaysia" which is known as Foreign Source Income (FSI). Under this law, exemption is given to any person, other than resident company carrying on the business of banking, insurance or sea or air transport, in respect of income derived from sources outside Malaysia and received in Malaysia. Budget 2022 however had remove the exemption under Para 28 effective 1 January 2022. Malaysia adopts territorial principle of taxation in that only income accruing in or derived from or received in Malaysia is subject to income tax pursuant to Section 3, Para 28 of the ITA 1967. With effect from YA 2004 tax exemption had been given to "income received in Malaysia from outside Malaysia" which is known as Foreign Source Income (FSI). Under this law, exemption is given to any person, other than resident company carrying on the business of banking, insurance or sea or air transport, in respect of income derived from sources outside Malaysia and received in Malaysia. Budget 2022 however had remove the exemption under Para 28 effective 1 January 2022.

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The removal of Section 3 Para 28 ITA 1967 which provided tax exemption for income received in Malaysia from outside Malaysia Foreign Source Income or ... View the full answer