INCOME TAX ACT 1967 (ACT 53) PART VII - COLLECTION AND RECOVERY OF TAX
Section 109B. Deduction of tax from special classes of income in certain cases derived from Malaysia.
(1) Where any person (in this section referred to as "the payer") is liable to make payments to a non-resident-
(a) for services rendered by the non-resident person or his employee in connection with the use of property or rights belonging to, or the installation or operation of any plant, machinery or other apparatus purchased from, such non-resident;
(b) for technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme; or
(c) for rent or other payments made under any agreement or arrangement for the use of any moveable property,
which is deemed to be derived from Malaysia, he shall, upon paying or crediting the payments, deduct therefrom tax at the rate applicable to such payments, and (whether or not that tax is so deducted) shall within one month after paying or crediting such payment, render an account and pay the amount of that tax to the Director General:
Provided that the Director General may-
(i) give notice in writing to the payer requiring him to deduct and pay tax at some other rates or to pay or credit the payments without deduction to tax; or
(ii) under special circumstances, allow extension of time for tax deducted to be paid over.
(2) Where the payer fails to pay any amount due from him under subsection (1), the amount which he fails to pay shall be increased by an amount equal to ten per cent of the payments liable to deduction of tax under paragraph (1)(a), (b) or (c) and the total sum shall be a debt due from him to the Government and shall be payable forthwith to the Director General.
[Subs. Act 557: s.19]
(3) Where in pursuance of this section any amount is paid to the Director General by the payer or recovered by the Director General from the payer-
(a) the Director General shall, in the manner provided by section 110, apply that amount towards payment of the tax charged on the person to whom the payer was liable to pay the payments to which the amount relates; and
(b) if the payer has not deducted that amount in paying the payment under subsection (1) with respect to which the amount relates, he may recover that amount from that person as a debt due to the payer.
(4) In this section "person" includes a partnership.
