INCOME TAX ACT 1967 (ACT 53)
PART VII - COLLECTION AND RECOVERY OF TAX
Section 109. Deduction of tax from interest or royalty in certain cases.
(1) Where any person (in this section referred to as the payer) is liable to pay interest or royalty derived from Malaysia to any other person not known to him to be resident in Malaysia, other than interest or royalty attributable to a business carried on by such other person in Malaysia, he shall upon paying or crediting the interest (other than interest on an approved loan or interest of the kind referred to in paragraph 33 or 35 of Part I, Schedule 6) or royalty deduct therefrom tax at the rate applicable to such interest or royalty, and (whether or not that tax is so deducted) shall within one month after paying or crediting the interest or royalty render an account and pay the amount of that tax to the Director General:
[Am. Act 328: s.11; Am.Act 497:
s.7]Provided that the Director General may-
(a) give notice in writing to the payer requiring him to deduct and pay tax at some other rates or to pay or credit the interest or royalty without deduction of tax; or(2) Where the payer fails to pay any amount due from him under subsection (1), that amount which he fails to pay shall be increased by an amount equal to ten per cent of the interest or royalty liable to deduction of tax under subsection (1) and the total sum shall be a debt due from him to the Government and shall be payable forthwith to the Director General.
(b) under special circumstances allow extension of time for tax deducted to be paid over.
[Subs. Act 557: s.18](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 interest or royalty to which that amount relates; and(4) In this section "person" includes a partnership.
(b) if the payer has not deducted that amount in paying the interest or royalty with respect to which that amount relates, he may recover that amount from that person as a debt due to the payer.
|[Act 557: s.18; Act A497:
s.7; Act 328: s.11]
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