How Malaysia tax foreigners for real property gain tax according to their RPGT ACT 1976

How Malaysia tax foreigners for real property gain tax according to their RPGT ACT 1976 is an important question that foreigners should take notice of?

Much as we dislike to sit up and take notice of such matter, we cannot run away from the big picture that this is a legal matter that is  the law of another country being imposed on us.

As I unwind my properties acquired during the MM2H period, these are my bad experiences with Lembaga Hasil Dalam Negeri (LHDN) or Inland Revenue Board of Malaysia over RPGT.

I have journaled these experiences and lessons  through four blog posts to make the general public be aware of how "goal posts" was shifted by a stroke of the pen, namely with the introduction of a 7% of selling price retention sum and a big jump in the RPGT rates for MM2H foreigners retroactively.

As if that were not enough, I then discovered that an additional arbitrary rule change by LHDN to deny foreigners any deductions for enhancement & preservation (renovation), legal fees, agent fees, stamp duties & State Consent fees. These are deductions allowed for exemption of gains.

After a long period of around 14 months, LHDN refunded the substantial over-payment amount of RPGT being held by them via the 7% Retention Sum. This includes one refund payment that was not refunded till I complained about it officially.

The complaint letter is addressed to the Director General of Public Complaints Bureau (HQ) under the Prime Minister's Department, Malaysia.

Below are the issues, questions and complaints raised:

 Part of Page 1

Part of Page 2

Part of Page 3

Part of Page 4

The complaint letter is sent on 23rd Dec 2020 and a first follow up complaint letter on 19th Jan 2021.

Now we can only wait and see whether "will the Director General reply or will he not reply?" to my complaint.

- On what legal basis or which clause in the RPGT ACT 1976 governs that the deduction for exemption of gains is disallowed for foreigner?

- Also generally the maths and numbers don't adds up. Why is it that there are errors and discrepancies here and there?

- Why is my wife's income tax file is handled by a different LHDN unit from me and my daughter when her status is similar to my daughter.

- Why there was no news on my wife's refund till I wrote to them after being made to wait for a long period?

- And why was her refund paid in three separate partial payments and not one full payment?

I am awaiting an answer from this Director General after he investigates and audit my case file.

This answer from the DG,  however long the wait, will be updated when available.

You can read about the other four posts through their links as below:

1.   Arbitrary Rule Change To RPGT

2.   A Bad Case For The 7% Retention Sum For RPGT

3.   RPGT and Retention Sum Policy and Refund

4.   RPGT Retention Sum Abuses Foreign Investors



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