SP Setia slapped with second round of tax and penalties

PETALING JAYA: The Inland Revenue Board (IRB) has slapped SP Setia Bhd with an additional income tax and penalty for a second time, this time totalling RM32.54 million.

In a filing with Bursa Malaysia today, the group said it was served with notices of additional assessment for the years of assessment 2009 to 2015 for an additional income tax of RM22.44 million and a penalty of RM10.1 million.

The notices were served as the IRB disallowed the interest expenses deducted by SP Setia over the years of assessment 2011 to 2015.

IRB also disallowed the common expenses deducted by SP Setia in the years of assessment 2009 to 2015.

Upon consulting its tax solicitors, SP Setia said there were reasonable grounds to challenge the basis and validity of the disputed notices of additional assessment raised by the IRB and the penalty imposed.

In November last year, SP Setia’s wholly owned subsidiary Bandar Setia Alam Sdn Bhd (BSASB) was slapped with an additional income tax and penalty totalling RM75.38 million for the years of assessment 2008, 2009, 2010, 2011 and 2013.

The additional income tax imposed last year was in relation to the disposal of land and properties held under investment properties under BSASB, which the IRB said are chargeable to income tax under the Income Tax Act 1967 instead of the Real Property Gains Tax Act 1976. SP Setia is disputing this action as well.

The property developer’s share price fell 0.66% or 2 sen to close at RM3.03 today with a total of 590,400 shares traded.