KUALA LUMPUR: The Federal Court today allowed the Inland Revenue Board’s (IRB) appeal to reinstate an additional tax assessment of RM1.25bil against Tenaga Nasional Bhd
(TNB) for the 2018 assessment year, following a penalty remission from the original RM1.8bil notice.
In a filing with Bursa Malaysia, the utility giant said the Federal Court allowed the IRB’s appeal against earlier decisions by the High Court and Court of Appeal, which had favoured TNB’s judicial review to set aside the tax notice.
TNB said it is currently assessing the full impact of the decision.
The Federal Court held that as a utility company, the applicable schedule is 7B, namely Investment Allowance, instead of 7A Reinvestment Allowance.
Accordingly, in light of the Federal Court’s decision, TNB will be pursuing to claim for the Investment Allowance under Schedule 7B.
“This decision has a potential negative financial impact on the earnings and net assets of the company and group for the financial year ending Dec 31, 2025. However, the decision is not expected to have any operational impact on the company and group,” TNB said.
The case originated when, on July 3, 2020, the IRB through a letter informed TNB that the RA that it had claimed for the year of assessment 2018 was disallowed and then issued a notice of additional assessment on July 7, 2020, to the amount of RM1.812bil.
Subsequently, TNB filed a judicial review that same year over the imposition of the RM1.812bil as an additional assessment to be paid by the national utility company.
However, this sum has been reduced to RM1.25bil at a discounted rate.
