Was the RM313.8m tax bill a case of unlawful double taxation?

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The RM313.8 Million Tax Bill Was Deemed Unlawful Double Taxation

The High Court has allowed Toh Puan Na’imah Abdul Khalid's judicial review application, quashing an additional tax assessment notice of RM313.8 million issued by the Inland Revenue Board (IRB). The court found that the IRB had acted beyond its jurisdiction under the Income Tax Act 1967, rendering the notice unlawful due to the principle of double taxation. This decision stems from the fact that the share ownership involved had already been assessed in a joint assessment for Na’imah and the late Tun Daim for the 2018 assessment year.
IRB Acted Beyond Statutory Jurisdiction

The judge ruled that the IRB exceeded its authority granted by the Income Tax Act 1967 when issuing the additional assessment notice dated August 13, 2024, for the 2018 assessment year. The court clarified that the Act primarily applies to income earned within Malaysia and foreign-sourced income remitted into the country. The assets in dispute were identified as Na’imah’s properties located abroad and were not considered income received in Malaysia.
Previous Assessment Precluded Additional Notice

A key factor in the court's decision was that the additional assessment notice was deemed unlawful because the share ownership in question had already undergone assessment. This prior assessment occurred through the joint tax filing of Na’imah and the late Tun Daim for the 2018 assessment year. Therefore, issuing a subsequent notice for the same matter constituted an unlawful action by the IRB.
Double Taxation Found Contrary to Law

The court concluded that the IRB's actions resulted in double taxation, which is contrary to the provisions outlined in the Income Tax Act 1967. This principle means that an individual should not be taxed twice on the same income or asset. The judge further elaborated that the market value of overseas assets cannot be automatically treated as taxable income solely based on ownership, as such a provision is not supported by the Act.

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Was the RM313.8m tax bill a case of unlawful double taxation?

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