MALAYSIA Law and Practice Contributed by: Dilys Tan, Adnan Sundra & Low
A bankruptcy-remoteness legal opinion is obtained from counsel to confirm whether the SPE is sufficiently “bankruptcy-remote” for the purposes of the securitisation transaction in Malaysia. 6.5 Bankruptcy-Remote SPE Please refer to 6.4 Construction of Bankruptcy- Remote Transactions .
pursuant to the securitisation transaction that is deductible under the Income Tax Act 1967 shall be deemed to have been incurred throughout the period of the securitisation transaction, and is allowed to be deducted in arriving at the SPE’s adjusted income in the basis period for a year of assessment that relates to the period of the securitisation transaction. For the originator, the ABS Income Tax Regula - tions provide that the proceeds, gains or loss - es from the disposal by the originator of trade receivables or stock in trade pursuant to the securitisation transaction are deemed to accrue evenly throughout the period of the securitisa - tion transaction, and shall constitute the gross income (or be allowed as deduction, as the case may be) of the originator in the basis period for a year of assessment that relates to the period of the securitisation transaction. Notwithstanding the foregoing, for a property developer originator where any stock in trade in respect of such property development business is disposed of by the originator pursuant to the securitisation transaction, and where there is a call option for the originator to buy back such stock in trade, the proceeds, gains or losses from such disposal shall constitute the gross income (or be allowed as deduction, as the case may be) of the originator in any basis period for a year of assessment in which the call option expires. Additionally, any expenses incurred by the SPE for the acquisition of stock in trade that is deductible under the ITA are allowed as deduc - tion in computing adjusted income of the SPV in the basis period for that year of assessment in which the call option expires.
7. Tax Laws and Issues 7.1 Transfer Taxes
Stamp duty exemptions are available for all instruments relating to the securitisation trans - action, including: • any instrument for the transfer or assignment of rights in any asset to or from the SPE; and • any instrument or document that the SPE is a party to. 7.2 Taxes on Profit Real Property Gains Tax In Malaysia, real property gains tax exemption is available in respect of chargeable gains accruing on the disposal of any chargeable assets to or in favour of the SPE, or in connection with the repurchase of such chargeable assets to or in favour of the originator for the purpose of the securitisation transaction. Income Tax Pursuant to the Income Tax (Asset-Backed Secu - ritisation) Regulations 2014 (the “ABS Income Tax Regulations”) of Malaysia, the SPE’s income from all sources shall be treated as gross income of the SPE from a single source consisting of a business in the basis period for a year of assess - ment. Any expenses incurred by the SPE for the acquisition of trade receivables or stock in trade
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