Taxman demands RM75m tax and penalty from SP Setia unit

KUALA LUMPUR: The Inland Revenue Board of Malaysia (MIRB) has demanded RM75.38mil from SP Setia Bhd's unit for additional income tax and penalty, but the company said it has grounds to contest the notice.

SP Setia announced on Friday that its wholly owned subsidiary, SP Setia Bandar Setia Alam Sdn Bhd, was served with a notice claiming an additional RM51.98mil of income tax imposed on five years of assessment, while a penalty of RM23.39mil was also levied on the company. 

"The abovementioned additional income tax and penalty were imposed by the MIRB as the MIRB has taken the view that the gains from the disposal of land and properties held under Investment Properties under BSASB in the abovementioned YAs are chargeable to income tax under the Income Tax Act 1967 instead of the Real Property Gains Tax Act 1976 (RPGTA)," said SP Setia in its announcement on Bursa Malaysia.

However, the group said its Bandar Setia Alam unit will challenge the additional assessment and penalty on grounds that the sales of the investment properties are capital transactions that fall under the purview of the RPGTA.

At 2.33pm, SP Setia was trading four sen lower at RM3.50 with 4.5 million shares done.