Gain on Disposal of Real Property in Malaysia – Capital Receipt or Revenue Receipt?

1. Those real property owners who are looking at cashing out now will see a substantial gain upon disposal of their real property. Now the question is this: is the gain on disposal of real property a capital receipt or a revenue receipt?

2. A layman’s answer to that question would be capital receipt. Generally, Malaysia does not impose tax on capital receipts except in certain situations where the receipt arose from the disposal of real property or shares in a real property company, which is taxable under the Real Property Gains Tax 1976 (RPGTA), or where the capital receipt is treated as a revenue receipt.

3. Many of us are familiar with the RPGTA that imposes real property gains tax (RPGT) on gains arising from the disposal of real property in Malaysia or shares in a real property company. The RPGT rates vary from five per cent (5%) to thirty per cent (30%), depending on the holding period of the real property.

4. However, not many are aware that the gain on the disposal of real property in Malaysia could be treated as a revenue receipt and hence, subject to income tax under the Income Tax Act 1967 (ITA) at the prevailing individual income tax rate [i.e. up to twenty eight per cent (28%)] or corporate income tax rate [i.e. twenty four per cent (24%)]

5. Now, the next question is, under what situation will the gain on the disposal of real property be treated as a revenue receipt instead of a capital receipt.

Indonesia’s Omnibus Law: New Protection and Empowerment Measures for Small Businesses

1. Indonesia’s Government Regulation 7 of 2021 (GR 7/2021) — an implementing regulation of the Omnibus Law — looks to provide greater protection and empowerment to Indonesia’s cooperatives, micro, small, and medium-sized enterprises (MSMEs).

2. GR 7/2021 provides several facilities to encourage the growth of local MSMEs, such as mandating regional governments to provide at least 30 percent of the total land area for commercial areas for the promotion and development of MSMEs. In addition, the regulation has made it easier for MSMEs to obtain a business license, tax reductions, and reliefs, and are exempt from paying the provincial or the regency/city minimum wage.

3. MSMEs are considered the backbone of Indonesia’s economy, contributing to over 60 percent of GDP and employing more than 100 million people (97 percent of the domestic workforce). 

4. Developing these small businesses into scalable ones will be essential for Indonesia’s economic growth and achieve its goal as the world’s seventh-largest economy by 2030. 

5. However, the majority of MSMEs are in the informal sector and thus face major obstacles to access financing, and the managerial and operational capacities to grow.

Malaysia Issues Tax Exemption for Foreign Sourced Income

1. The Malaysian government has decided to provide a tax exemption on foreign-sourced income for individual taxpayers, backtracking from their earlier proposal made in the 2022 budget to tax Malaysian residents on their income sourced from abroad. 

2. The categories of foreign-sourced income that are exempt from income tax are the following:
- Dividends received by companies and limited liability partnerships; and
- All types of income received by individual taxpayers.

3. The income tax exemption is effective from January 1, 2022, until December 31, 2026.

4. The Chartered Tax Institute of Malaysia has said that the tax exemption on dividends will encourage more investments to be remitted to Malaysia and improve the country’s standing as a destination for regional HQs.

Big Data Analytics: What It Is, How It Works, Benefits, And Challenges

1. Big data analytics describes the process of uncovering trends, patterns, and correlations in large amounts of raw data to help make data-informed decisions. These processes use familiar statistical analysis techniques—like clustering and regression—and apply them to more extensive datasets with the help of newer tools.

2. Big data has been a buzz word since the early 2000s, when software and hardware capabilities made it possible for organizations to handle large amounts of unstructured data. Since then, new technologies—from Amazon to smartphones—have contributed even more to the substantial amounts of data available to organizations.

3. With the explosion of data, early innovation projects like Hadoop, Spark, and NoSQL databases were created for the storage and processing of big data. This field continues to evolve as data engineers look for ways to integrate the vast amounts of complex information created by sensors, networks, transactions, smart devices, web usage, and more. 

4. Even now, big data analytics methods are being used with emerging technologies, like machine learning, to discover and scale more complex insights.