KUALA LUMPUR (Oct 13): GuocoLand (Malaysia) Bhd said its wholly-owned subsidiary GLM Real Estate Holdings Sdn Bhd has received a notice of assessment for 2016 of RM82.6 million, comprising income tax of RM56.3 million and a penalty of RM26.3 million.
In a filing with the bourse, GuocoLand said the income tax and penalty were imposed as IRB considers the gains made by GLM from the disposal of shares in a property subsidiary as chargeable under the Income Tax Act 1967, instead of the Real Property Gains Tax Act 1976.
It said there is a potential net tax impact of RM70.2 million to the company, as GLM had previously paid real property gains tax of RM12.4 million.
Upon consultation with our tax solicitors, the company is of the view that there are reasonable grounds to challenge the basis and validity of the notice and the penalty imposed, as the company takes the view that the disposal is a capital transaction which falls under the purview of Real Property Gains Tax Act,” GuocoLand said.
“GLM will appeal and contest the notice,” it added.
GuocoLand’s share price fell 1.5 sen or 3.3% to close at 44 sen today, giving it a market capitalisation of RM308.2 million.