PwC Alert (Issue 76): Reinvestment Allowance - an analysis of issues

PwC Alert (Issue 76)
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Issue 76: September 2008

In April 2008, the Inland Revenue Board (“IRB”) issued Public Ruling 2/2008 (“the PR”) on Reinvestment Allowance (“RA”) which supercedes the previous guidelines on RA issued in 1996 and 1998.

The issue of the PR was at an opportune time as IRB field audits are increasingly focused on claims made by taxpayers. These audits have highlighted several major differences in the interpretation of Schedule 7A between the IRB and the tax community resulting in substantial audit adjustments and hence additional assessments being raised.

Certain positions taken by the IRB in these audits appear to have somewhat gone against the spirit of the RA incentive and in other cases there is difficulty determining the basis of IRB’s interpretation of the law. With the release of the PR which takes effect from the year of assessment 2008, taxpayers are now caught between non compliance with the PR or compromising on their RA claims.

Read PwC Alert issue 76 for more on Reinvestment Allowance.

PwC Alert is a digest of topical financial and business information for clients and business associates of PwC Malaysia. Whilst every care has been taken in compiling this newsletter, we make no representations or warranty (expressed or implied) about the accuracy, suitability, reliability or completeness of the information for any purpose. PwC Associates Sdn Bhd, its employees and agents accept no liability, and disclaim all responsibility, for the consequences of anyone acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. Recipients should not act upon it without seeking specific professional advice tailored to your circumstances, requirements or needs.