What is Real Property Gains Tax (RPGT)?

RPGT is a restricted capital gains tax charged on the disposal of real properties and shares in real property companies (RPC) in Malaysia. It is governed under the Real Property Gains Tax Act 1976 (RPGT Act) effective from 7 November 1975.

Before the RPGT Act was introduced, gains on disposal of real properties were taxed under the Land Speculation Tax Act 1974.



When would the RPGT provisions be triggered?

Generally, disposals of real properties and shares in RPCs would fall within the ambit of the RPGT Act unless they relate to trade transactions.

The decision tree below can be used in determining whether RPGT would be applicable.



RPGT and Income Tax are mutually exclusive. Disposals of real properties and RPC shares would generally be subject to RPGT. It is only where such disposals are part of the taxpayer’s trading transactions, would the transaction fall within the ambit of Income Tax.

As a rule of thumb, Income Tax would normally take precedence over RPGT.



http://iss2.etax.com.my/vld/rpgtvld.nsf/25...b7?OpenDocument

I'll let you guys discuss a bit before I give my opinion.

RPGT is at 5%.
Income tax is from 0% to 27%.

Now, what are the requirements for paying 0% tax on a RM100k profit from the sale of a property?

Hehe.

So far Pai understand what I meant.
If I tell the answer now you guys surely won't think hard enough.
It's similar to tax code 1031.
Ok, next answer.

What are the requirements for paying 0% tax on a RM100k profit from the sale of a property?
To pay zero tax, you have to spend all the RM100k away. In the end it shows no profit and no loss.


Next question.
Who is eligible to spend all the money away and not being tax?

Morning guys.

Q:Who is eligible to spend all the money away and not being tax?
A:A business owner can spend the money earn before tax. An individual with less than 4 property will be tax first.


1.1 the treatment of rent as a non-business source of income under section 4(d) of
the Income Tax Act 1967 (the Act);
1.2 the situations or circumstances where rent or income from the letting of
property can be treated as business income of a person under section 4(a) of
the Act; and
1.3 how all properties of a person are to be grouped in several categories in
computing the statutory income under section 4(d) of the Act.

"Person" includes a company, a co-operative society, a partnership, a club, an
association, a Hindu joint family, a trust, an estate under administration and an
individual, but excludes a unit trust.

Generally, rent is regarded as a non-business source of income and is charged to
income tax under section 4(d) of the Act. Where the property concerned is managed
and let in such a systematic or organized manner that the letting can be regarded as
carrying on a business, the income from the letting can be charged to tax under
section 4(a) of the Act.

The letting of 4 or more commercial units, 4 or more floors of shophouses or 4
or more residential properties or any combination of 4 units of the above may
be treated as a business source of a company and the income therefrom
charged to tax under section 4(a). [The entire property (except for a
shophouse) constituted under the particular title should be included in the
letting].

http://www.hasil.gov.my/lhdnv3e/documents/...ling(1)2004.pdf


Q:What expenses are legitimate?

From what I have read so far.
Yes, buying a car for your company cannot be depreciated unless it's main purposes is to make more money.
Example:
You're a taxi driver.
You buy a taxi to fetch passengers to make money.

You're a logistic company.
You need trucks to send goods to make money.

If you're a real estate company.
How does buying a car help you make money?
In fact you can't. So the tax department won't allow you to write it down as an expense.

By the way, I am not a tax advisor. I only study engineering.
Please seek competent advise from them. Do note there are good ones as well as bad ones.
So I don't know how to reply simplesmile's question.



Q:What expenses are legitimate?
A: Buying another property to make more money.

Your company holds real estate, that is the primary asset that generate income.
If there is damage to it, you can spend the money you earn to fix it up. Before being tax.
You buy furniture or install fixtures to increase the value, you are allow to depreciate those items.

If you rent a place to do your real estate business to make more money, yes.
It is a legitimate expense.

You may not even need to rent an office place.
You can use one of your spare room and convert into an office place and get the benefits.

This post has been edited by jasonhanjk: Nov 2 2009, 10:53 AM