KUALA LUMPUR, Aug 9 — MK Land Holdings Bhd has announced that its subsidiary’s tax liabilities and penalties have been reduced by over 85 per cent following a settlement with the tax authorities.
According to a filing with the stock exchange yesterday, the agreement with the Inland Revenue Board will cut Saujana Triangle Sdn Bhd’s tax obligations from RM80.77 million to RM12.16 million.
The property developer indicated that this settlement has been documented by the Special Commissioners of Income Tax and the reduced amount is scheduled to be paid in instalments by December 15 this year.
It added that the settlement will not significantly affect its financial position.
In 2017, Saujana Triangle was assessed additional income taxes amounting to RM55.7 million for the years 2009 to 2011, with a 45 per cent penalty of RM25.07 million for 2013.
MK Land challenged the Inland Revenue Board’s classification of land sale gains in 2009 as revenue instead of capital gains.
The company also argued that the board had disregarded the five-year limit for issuing assessments and improperly rejected certain development costs as mere provisions.
MK Land asserted that the 2009 land sales should be classified as capital transactions subject to Real Property Gains Tax (RPGT), rather than income tax. RPGT was suspended during the global financial crisis from 2007 until December 2009 and reintroduced in 2010 at significantly lower rates.
