Anti tax avoidance - S140(C)
8 important questions on Anti tax avoidance - S140(C)
What is the formula to compute the restricted interest under section 140C?
What is the purpose of S140C-Earnings Stripping Rules (ESR) in Malaysia?
It limits interest deduction on loans between related companies within the same group to a ratio of 20% of the companies' earnings.
What is the restriction on deductibility of interest under S140(C)?
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What does 'A' represent in the Tax EBITDA formula?
What is the scope of S140C regarding interest expenses?
- Associated persons outside Malaysia
- Associated persons with a permanent establishment in Malaysia
- Third parties outside Malaysia where the loan is guaranteed by the holding company
What does 'C' signify in the Tax EBITDA formula?
How is the 'qualifying deduction' determined when business expenditure exceeds the deduction allowed?['B' in the EBITDA fomula]
What is the non-application of S140C regarding individuals?
- The provision under S140C shall not apply to individual.
- Interest not exceeding RM500,000.
- Not applicable to interest paid to associated companies in Malaysia.
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