INCOME TAX ACT 1967 (ACT 53)
PART III - ASCERTAINMENT OF CHARGEABLE INCOME
Chapter 8 - Special cases




Section 60. Insurance business.


(1) This section shall apply for ascertaining the adjusted income for the basis period for a year of assessment from the insurance business of an insurer.
[Am. Act A328; Act A471:s.9]
(2) For the purposes of this section-


[Ins. Act 264:s.8]

[Ins. Act 264:s.8]
[Ins. Act 264:s.8]

[Ins. Act 531:s.12; Am. Act 578:s.13]
Provided that-
[Ins. Act 578:s.13]
(3) The adjusted income of the life fund other than income arising from life re-insurance business, for the basis period for a year of assessment of an insurer resident for the basis year for that year of assessment shall be ascertained by-
[Subs. Act 531:s.12, Am. Act 578:s.13]
(3A) The adjusted income of the shareholders' fund for the basis period for a year of assessment of an insurer resident for the basis year for that year of assessment shall be ascertained by-

[Subs. Act 591:s.8]


[Subs. Act 544:s.10; Am. Act 578:s.13]
(4) The adjusted income of the life fund, other than income from life re-insurance business, of an insurer not resident for the basis year for that year of assessment shall where that business is wholly or partly carried on in Malaysia be ascertained by-
[Subs. Act 531:s.12; Am. Act 578:s.13]
(4A) The adjusted income of the shareholders' fund for the basis period for a year of assessment of an insurer not resident for the basis year for that year of assessment shall, where that business is wholly or partly carried on in Malaysia, be ascertained by-

[Sub. Act 591:s.8]


[Subs. Act 544:s.10, Am. Act 578:s.13]
(4B) The adjusted income as ascertained under subsections (3A) and (4A) shall be deemed to be the statutory income from that source.

[Subs. Act 531:s.12]

(5) The adjusted income for the basis period for a year of assessment from the general business of an insurer resident for the basis year for that year of assessment shall consist of an amount arrived at by-

[Am. Act 531:s.12]

[Sub. Act 531:s.12]

(5A) The adjusted income for the basis period for a year of assessment from the inward re-insurance business of an insurer resident for the basis year for that year of assessment shall consist of an amount arrived at by applying subsection (5) as if references therein to "general business" and "general policies" were references to "inward re-insurance business" and "inward re-insurance contracts" respectively.
[Ins. Act A471:s.9]
(5B) The adjusted income for the basis period for a year of assessment from the off-shore insurance business of an insurer resident for that basis year for that year of assessment shall consist of an amount arrived at by applying subsection (5) as if references therein to "general business" and "general policies" were references to "off-shore insurance business" and "off-shore insurance policies" respectively.

[Ins. Act 264:s.8]
(5C) The adjusted income for the basis period for a year of assessment from the life re-insurance business of a life insurer resident for the basis year for that year of assessment shall consist of an amount arrived at by applying subsection (5) as if references therein to-

[Ins. Act 578:s.13]
(6) The adjusted income for the basis period for a year of assessment from the general business of an insurer not resident for the basis year for that year of assessment shall where that business is wholly or partly carried on in Malaysia consist of an amount arrived at by-

[Subs. Act 531:s.12]

[Am. Act 531:s.12]

(6A) The adjusted income for the basis period for a year of assessment from the inward re-insurance business of an insurer not resident for the basis year for that year of assessment shall, where that business is wholly or partly carried on in Malaysia, consist of an amount arrived at by applying subsection (6) as if references therein to "general business" and "Malaysian general policies" were references to "inward re-insurance business" and "inward re-insurance contracts" respectively.
[Am. Act A471:s.9]
(6B) The adjusted income for the basis period for a year of assessment from the off-shore insurance business of an insurer not resident for the basis year for that year of assessment shall, where that business is wholly or partly carried on in Malaysia, consist of an amount arrived at by applying subsection (6) as if references therein to "general business" and "Malaysian general policies" were references to "offshore insurance business" and "offshore insurance policies" respectively.
[Ins. Act 264:s.8]

(6C) The adjusted income for the basis period for a year of assessment from the life re-insurance business of a life insurer not resident for the basis year for that year of assessment shall, where that business is wholly or partly carried on in Malaysia, consist of an amount arrived at by applying subsection (6) as if references therein to-

[Ins. Act 578:s.13]
(7) "(7) Where an insurer carrying on general business has re-insured the risk or part of the risk with a re-insurer who either does not carry on the business of insuring risks of that kind in Malaysia or does not re-insure the risk through a branch in Malaysia, there may be deducted under subsection (5)(b)(ii) or (6)(b)(ii) in respect of such risks which are re-insured only ninety-five percent of the amount which would otherwise be deductible:
[Subs. Act 544:s.10]

(8) Where an insurer in connection with his life business or his general business receives any incidental gross income (not being a premium on a policy issued in the course of carrying on that life or general business) for which subsections (3) to (7) do not provide, that income shall be treated as income of the insurer falling under paragraph 4(f) and he shall be deemed to have a separate source in respect of it.

(9) For the purposes of this section an insurer's reserve fund for unexpired risks at the end of a basis period shall consist of-

[Subs. Act 608:s.14]

(10) Where under this section all such deductions as would be made in computing what would have been the adjusted income for the basis period for a year of assessment from the insurance business of an insurer if any such adjusted income had been ascertainable exceed the aggregate of the amounts from which those deductions would otherwise have been made, the amount of the excess shall be taken to be the amount of his adjusted loss from that business for that period.

(10A) Notwithstanding subsection 43(2) and section 60(10), any unabsorbed losses of the life business shall only be available for deduction against the statutory income for the basis period for a year of assessment and subsequent years of assessment in respect of the life fund of the insurer.
[Ins. Act 531:s.12]
(10B) Notwithstanding paragraph 75 of Schedule 3, any unabsorbed allowances of the life business shall only be available for deduction against the adjusted income for the basis period for a year of assessment and subsequent years of assessment in respect of the life fund of the insurer.

[Ins. Act 531:s.12]
(10C) Allowances under Schedule 3 shall only be available for deduction against the adjusted income of the life fund and the balance of such allowances shall not be available as a deduction against the adjusted income of the shareholders' fund.

[Ins. Act 531:s.12]


(11) In this section, sections 60A and 60B-

[Subs. Act 578:s.13]
"general business" means all insurance business which is not life business;

"general policy" means a policy other than a life policy;

"insurer" means a person who carries on insurance business and includes a professional re-insurer;

"investments" includes any accretions thereto;

"inward re-insurance" means any reinsurance of a risk under a policy where the risk is outside Malaysia and the original insurance policy-

and where any risk is in transit in Malaysia it shall be deemed to be outside Malaysia;

"inward re-insurance contract" means a Malaysian policy in respect of inward re-insurance;

"life business" has the same meaning assigned thereto under section 2 of the Insurance Act 1996 [Act 553];

"life policy" has the same meaning assigned thereto under section 2 of the Insurance Act 1996;

"Malaysian life fund" means the fund established pursuant to section 38 of the Insurance Act 1996;

"Malaysian policy" has the same meaning assigned thereto under section 2 of the Insurance Act 1996;

"offshore insurance" means insurance of a risk under a general policy where the risk is outside Malaysia and the insurance policy is issued by an insurer resident in Malaysia or by a branch in Malaysia of an insurer not resident in Malaysia, and where any risk is in transit in Malaysia it shall be deemed to be outside Malaysia;

[Ins. Act 264:s.8]

"offshore insurance policies" means policies issued in respect of offshore insurance;

[Ins. Act 264:s.8]

"policy" has the same meaning assigned thereto under section 2 of the Insurance Act 1996.

"premium" has the same meaning assigned thereto under section 2 of the Insurance Act 1996;

"re-insurance" has the same meaning assigned thereto under section 2 of the Insurance Act 1996;

"revenue account" means the revenue account lodged in respect of life business under section 87 of the Insurance Act 1996.
[Subs. Act 578:s.13]

Related reading:
[Act 531:s.12; Act 578:s.13; Act 608:s.14; Act 328; Act 471:s.9; Act 264:s.8; Act 591:s.8; Act 544:s.10]


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