Real Property Gains Tax (RPGT) For Company in Malaysia: What You Need to Know
The Inland Revenue Board must be paid Rpgt For Company, a tax that is levied on the proceeds from the sale of a property. RPGT is therefore exclusive to a seller.
As an illustration, A purchased a property in 2000 for RM500,000. A then sold the property to B for RM700,000, making a profit of RM200,000 from the sale of the property. For RM200,000, the RPGT is computed.
The following commonly asked questions may help you comprehend the idea of RPGT and how it relates to you:
When must I make RPGT?
According to the legislation, in order to cover the RPGT due, the purchaser’s solicitors must withhold 3% of the purchase price from the deposit and send it to the Inland Revenue Board within sixty (60) days after the date of the sale and purchase agreement.
Remittance of the 3 percent of the purchase price may be postponed until the State Authority’s consent or a court order for sale is obtained in cases where doing so is necessary in order to sell the property to a buyer and/or charge it to a financial institution or dispose of it.
What happens if a payment is made late?
Any payment made beyond 60 days may be subject to a fee that must be paid by the seller. The fine is equal to 10% of the amount due as RPGT.
Do I have to do the paperwork on my own?
The seller has the option of working with a solicitor at a cost outlined by the Solicitors Remuneration Order 2006, or filing the required paperwork with the Inland Revenue Board on their own.
What if I make a loss when I sell the house? Do I still have to pay the Rpgt For Company?
Only when a profit is made from the sale of the property is RPGT due. As a result, if the disposal price is less than the acquisition price, no RPGT is due because there was no profit made.
Likewise, neither a chargeable gain nor an acceptable loss exists if the disposal price is equal to the acquisition price. As a result, no Rgbt For Company is due.
Do I qualify for any deductions?
The RPGT Act of 1976 permits certain incidental costs associated with the purchase and sale of real estate, such as legal fees associated with the transaction and estate agency fees, to be taken into account.
Do I have the right to request an exemption? Does it matter if the property is business or residential?
Each disposer is qualified for a single-time exemption. This exemption, meanwhile, only applies to the sale of “private residences.” According to the RPGT Act, a private residence is any property or portion of a building owned by an individual in Malaysia that is used as a place of habitation or is deemed suitable for such use. Therefore, it does not apply to real estate used for business.
The applicant must demonstrate the following in order to request an exemption:
(i) A person owns and lives in the private residence; and
(ii) for the private residence, a certificate of completion and compliance or a certificate of fitness for occupation has been issued.
It should be highlighted that this exemption solely pertains to people. If a business owns the residential residence, it is not relevant. An individual who resides in Malaysia permanently may also apply for this exemption.
If I sell a property held by the deceased person’s estate to a buyer, am I subject to RPGT?
In this case, the deceased person’s death date will be taken into consideration by the Inland Revenue Board for determining the acquisition date. In other words, even though the deceased had owned the property for more than 5 years during his lifetime, RPGT is still due if the property is sold within 5 years after the deceased’s passing.
If there is a transfer among family members, must I pay RPGT?
According to the law, the following situations qualify for a complete exemption from paying RPGT when family members transfer property out of love and affection:
(a) a marriage-related transfer;
Transferring between a parent and a child (b);
transfer from grandparent to grandchild (c).
In certain situations, the transferor is assumed to have gained no gain and incurred no loss, and the transferee is assumed to have purchased the property for an amount equal to the acquisition price paid by the transferor plus any allowed costs incurred by the transferor.
In addition to the aforementioned transfers, transfers between brothers and other family members are not eligible for exemption.
Still confusing about what exactly Rpgt is? Check out with this: Rpgt For Company
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