Tax Update: New Public ruling No.01/2022 (Time Limit for Unabsorbed Losses)
The Inland Revenue Board of Malaysia (IRBM) announced Public Ruling No.1/2022 regarding the time limit for carrying forward unabsorbed adjusted business losses on 30 June 2022. The purpose of the Public Ruling is to explain the time restriction for carrying forward unutilized or unabsorbed adjusted business losses originated from a person’s business.
Regarding the time limit for carrying forward unabsorbed adjusted business losses, the Inland Revenue Board of Malaysia has issued a Public Ruling No.1/2022. The Public Ruling makes a significant point in the restriction of the carry forward of unabsorbed losses to seven consecutive years of assessment beginning in the year of assessment 2019 and the raising of the limit to ten consecutive years of assessment as part of the 2022 budget measures. Regarding the cap, it is made clear that starting in 2019, all unabsorbed losses up to the assessment 2018 are included in the increase to ten consecutive years of assessment.
Any remaining unutilized portion of the total unabsorbed losses up to the year of assessment 2018 that are not used in the year of the assessment 2019 can be carried forward up to the year of assessment 2028, and any balance of such losses for the assessment year of 2029. The unabsorbed losses for the assessment year of 2019 can be carried forward to the assessment year of 2029, and any remaining unabsorbed losses are to be ignored beginning with the assessment year of 2030.
As a result, if unabsorbed adjusted business losses occur in the assessment year of 2019, the time limit for those losses can be carried forward until the assessment year of 2028, and remaining losses must be ignored in the assessment year of 2029.
For more information, check their PDF: