IRB slaps SP Setia with RM75.38 million additional income tax, penalty

PETALING JAYA: The Inland Revenue Board (IRB) has slapped SP Setia Bhd with an additional income tax and penalty totalling RM75.38 million.
The property developer told Bursa Malaysia that its wholly owned subsidiary Bandar Setia Alam Sdn Bhd (BSASB) was served by IRB with notices of additional assessment for the years of 2008, 2009, 2010, 2011 and 2013 dated November 13, 2017 for an additional income tax of RM51.99 million and a penalty of RM23.39 million totalling RM75.38 million.
Explaining the additional income tax imposed, SP Setia said IRB has taken the view that the gains from the disposal of land and properties held under investment properties under BSASB are chargeable to income tax under the Income Tax Act 1967 instead of the Real Property Gains Tax Act 1976 (RPGTA).
Upon consulting the tax solicitors, BSASB is of the view that there are reasonable grounds to challenge the basis and validity of the disputed notices of additional assessment raised by the IRB and the penalty imposed, as it takes the view that the sales of the investment properties are capital transactions which fall under the purview of RPGTA.
"BSASB will challenge the said disputed notices of additional assessment and take all necessary actions to protect the interest of BSASB and the SP Setia Group," said SP Setia.
It added that any further material development of the above matter will be announced in due course.
SP Setia’s share price fell 5 sen or 1.4% to RM3.49, with some 9.94 million shares changing hands.