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Week 2 Corporate TaxMalaysian Company Taxation
SPE, UMS
Lecture outlineBasis Period
SPE, UMS
Basis PeriodDefinitionFailure yearChange in Accounting Year EndCommencement of business
DefinitionRefers to the taxable period of
income of a year of assessment.Example:
Year ended 31 December 2012Year ended 31 March 2013
Failure yearThe first year where the entity fails
to prepare its accounts for a financial year or period.
Year ended 31 July 2012Assuming the next year end is:
30 November 201331 January 201331 August 2013
Accounts – 12 months01 Oct 2008 – 30 Sept 2009The basis period for all sources of
income for the year of assessment (YA) 2009
1st Jan 2008 – 31st Dec 2008The basis period for all sources of
income for YA 2008
Change in accounting dateChange in accounting period, the basis period is
depended upon the normal year end:I. normal year end on 31st Dec
i. new accounts prepared < 12 monthsii. new accounts prepared > 12 months
II. normal year end NOT 31st Deci. new accounts prepared < 12 monthsii. new accounts prepared > 12 months
Change in accounting dateI. Normal accounting year end on 31st Dec
i. New accounting date ends in the same year (< 12 months)
The basis period in the year of change REMAINS the year ending 31st Dec. Thereafter, the 12-month accounting period will be the basis period
XYZ, which normally closes its accounts on 31st Dec changes its year end to 31st Oct in 2008, and subsequently closes on 31st Oct (12mths).
YA 2008: 1st Jan 2008 – 31st Dec 2008YA 2009: 1st Nov 2008 – 31st Oct 2009
Change in accounting dateI. Normal accounting year end on 31st Dec
ii. New accounting date ends in the subsequent year (> 12 months), the basis period REMAINS 31 Dec until 12-mth accounting period
AAA, which normally closes its accounts on 31st Dec changes its year end to 31st Jul in 2009, and subsequently closes on 31st Jul (12mths). It prepares its account from 1st Jan 2008 – 31st Jul 2009
YA 2008: 1st Jan 2008 – 31st Dec 2008 YA 2009: 1st Jan 2009 – 31st Dec 2009 YA 2010: 1st Aug 2009 – 31st Jul 2010
Change in accounting dateII. Normal accounting year end NOT 31st
Deci. New accounts prepared < 12
months; anda. New accounts ending in the
following year The new accounting period in the
year of change is the basis period for that year of assessment
Change in accounting dateII. Normal accounting year end NOT 31st Dec
i. New accounts prepared < 12 months; anda. New accounts ending in the following
year BBB, which normally closes its accounts
on 31st Oct changes its year end to 31st Aug in 2008, and subsequently closes on 31st Aug.
Accounts prepared in the year of change:1st Nov 2007 – 31st Aug 2008
YA 2008: 1st Nov 2007 – 31st Aug 2008 YA 2009: 1st Sep 2008 – 31st Aug 2009
Change in accounting dateII. Normal accounting year end NOT 31st Dec
i. New accounts prepared < 12 months; and
b. New accounts ending in the same year The new accounting period in the year
of change together with the subsequent year’s accounting period is the basis period for the following YA. (Cannot have two same YA)
Change in accounting dateII. Normal accounting year end NOT 31st Dec
i. New accounts prepared < 12 months; andb. New accounts ending in the same year CCC, which normally closes its accounts on
30th Apr changes its year end to 31st Oct in 2008, and subsequently closes on 31st Oct.
Accounts prepared in the year of change:1st May 2008 – 31st Oct 20081st Nov 2008 – 31st Oct 2009
YA 2008: 1st May 2007 – 30th Apr 2008 [done]
YA 2009: 1st May 2008 – 31st Oct 2009 [new]
Change in accounting dateII. Normal accounting year end NOT 31st Dec
ii. New accounts prepared > 12 months; anda. New accounts ending in the following year DDD, which normally closes its accounts on
31st May changes its year end to 31st Jul in 2009, and subsequently closes on 31st Jul.
Accounts prepared in the year of change:1st Jun 2008 – 31st Jul 2009 (14mths)
YA 2008: 1st Jun 2007 – 31st May 2008 [done] YA 2009: 1st Jun 2008 – 31st Jul 2009 [new]
Change in accounting dateII. Normal accounting year end NOT 31st Dec
ii. New accounts prepared > 12 months; andb. New accounts ending in the third year EEE, which normally closes its accounts on
30th Sep changes its year end and prepared accounts from 1st Oct 2006 to 30th Apr in 2008. Accounts prepared 1st Oct 2006 – 30th Apr 2008 (19 months) apportioned into 2 periods
YA 2007: 1st Oct 2006 – 31st Jul 2007 (10mths) YA 2008: 1st Aug 2007 – 30th Apr 2008 (9mths) YA 2009: 1st May 2008 – 30th Apr 2009 [normal]
Commencement of businessAccounts prepared for 12 monthsAccounts prepared < > 12 months but
ending 31st DecAccounts prepared < > 12 months ending
< > 31st Dec
Commencement of business1. Accounts prepared for 12 months If first accounts are made up for 12 months,
that accounting period is the basis period for the YA in which the accounts are closed
ABC commenced operations on 1st May 2008 and its first set of accounts closed on 30th Apr 2009.
The basis period:YA 2009 is 1st May 2008 – 30th Apr 2009. No basis period for YA2008.
Commencement of business2. Accounts prepared < > 12 months but
ending 31st Dec If first accounts are made up for < > 12
months but ending 31st Dec, the basis period for the YA is the period ending on 31st Dec
ABC commenced operations on 10th May 2008 and its first set of accounts closed on 31st Dec 2008.
The basis period:YA 2008 is 10th May 2008 – 31st Dec 2008.
Commencement of business2. Accounts prepared < > 12 months but
ending 31st Dec (cont’) DEF commenced operations on 10th May
2008 and its first set of accounts closed on 31st Dec 2009.
The basis period:YA 2008 is 10th May 2008 – 31st Dec 2008YA 2009 is 1st Jan 2009 – 31st Dec 2009
Commencement of business3. Accounts prepared < > 12 months and
ending < > 31st Dec If first accounts are made up for < > 12
months ending < > 31st Dec, the basis period for the YA is the year ending on 31st Dec each year until accounts are made up for a period of 12 months
Commencement of business3. Accounts prepared < > 12 months and
ending < > 31st Dec (cont’) DEF commenced operations on 10th Jun
2008 and its first set of accounts closed on 31st Mar 2009 and subsequently 31st Mar annually (12mths).
The basis period:YA 2008 is 10th Jun 2008 – 31st Dec 2008YA 2009 is 1st Jan 2009 – 31st Dec 2009YA 2010 is 1st Apr 2009 – 31st Mar 2010
Commencement of business3. Accounts prepared < > 12 months and
ending < > 31st Dec (cont’) JKL commenced operations on 20th Sep
2008 and its first set of accounts closed on 30th Nov 2009 and subsequently 30th Nov annually (12mths).
The basis period:YA 2008 is 20th Sep 2008 – 31st Dec 2008YA 2009 is 1st Jan 2009 – 31st Dec 2009YA 2010 is 1st Dec 2009 – 30th Nov 2010
Commencement of businessA. Company with existing operations
commences new operations. The basis period for the existing
operations is also the basis period for the new operation
MNO, with existing operations closes its accounts on 30th Jun each year, starts a new operation on 1st Apr 2009.
The basis period for the new operation for YA2009 is 1st Apr 2009 – 30th Jun 2009
Commencement of businessB. Same accounting date as related
companies in a group. A company commences an operation and
makes up accounts to the same day as that of the other related companies in a group, the first basis period for the company is from the date it commences the operation to the date the accounts are closed.
Commencement of businessB. Same accounting date as related
companies in a group. PQR, being a member of Group ZZZ,
commences operations on 20th Feb 2008 and closes its first accounts on 30th Nov 2008 to coincide with the financial year end of Group ZZZ, and subsequently closes its accounts on 30th Nov annually.
The basis period:YA 2008 is 20th Feb 2008 – 30th Nov 2008YA 2009 is 1st Dec 2008 – 30th Nov 2009
Commencement of businessC. Requirement under the law of place of
incorporation Where a company commences operations
in the place where the law requires it to close its accounts on a particular date, the period from the date of commencement to that accounting date is the basis period for the first year of assessment.
Commencement of businessC. Requirement under the law of place of
incorporation STU, commences operations on 15th Dec
2008 and makes its first accounts to 30th Jun 2009 as required by the law of the place of its incorporation.
The basis period:YA 2009 is 15th Dec 2008 – 30th Jun 2009.There is no basis period for YA2008.
Next week - Allowances Chp 12Schedule 3 of ITACapital Allowance on Plant & MachineryIndustrial Building AllowanceAgriculture Allowance (p. 542) Forest Allowance (p. 549) Schedule 4A of ITAApproved Agriculture Project (p. 549) Schedule 2Mining Allowance (p. 529)Schedule 4 of ITAProspecting Expenditure (p. 539)
