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INLAND REVENUE BOARD MALAYSIA
Translation from the original Bahasa Malaysia text 
DATE OF ISSUE : 22 MAY 2009
PROPERTY DEVELOPMENT
PUBLIC RULING NO. 1/2009
 
 INLAND REVENUE BOARD MALAYSIA
PROPERTY DEVELOPMENT
Public Ruling No. 1/2009Date of Issue: 22 May 2009 CONTENTS Page
1. Introduction 12. Interpretation 13. Date of commencement of business 1-34. Recognition of income prior to completion of projects 3-115. Separate source of income 11-126. Estimated loss from uncompleted projects 12-147. Revision of estimates and tax computation 14-178. Withdrawal of purchases 17-209. Completion of project 20-2810. Outgoings and expenses of property developers 29-4311. Valuation of stock and stock transfers 43-4412. Other issues related to property development 4513. Information required for audit 4514. Joint Venture project 4615. Effective Date 47
DIRECTOR GENERAL'S PUBLIC RULING
 
A Public Ruling as provided for under section 138A of the Income Tax Act 1967is issued for the purpose of providing guidance for the public and officers of theInland Revenue Board Malaysia. It sets out the interpretation of the DirectorGeneral of Inland Revenue in respect of the particular tax law, and the policyand procedure that are to be applied.A Public Ruling may be withdrawn, either wholly or in part, by notice ofwithdrawal or by publication of a new ruling which is inconsistent with it.
 
Director General of Inland Revenue,
 
Inland Revenue Board Malaysia.
 
 
 INLAND REVENUE BOARD MALAYSIAPROPERTY DEVELOPMENTPublic Ruling No. 1/2009Date of Issue: 22 May 2009
 
Issue:
B
Page 1 of 47
 
1. This Ruling explains the basis of determining gross income for the purpose ofcomputing adjusted income derived from the business of propertydevelopment.2. The provisions of the Income Tax Act 1967 (ITA) related to this Public Rulingare paragraphs 4
(a)
and 23
(a)
, section 24, subsections 33(1) and 33(2),sections 35, 39 and 91 of the ITA.3. The words used in this Ruling have the following meanings:3.1 “Development units” means units of residential, commercial orindustrial building and vacant lots developed for sale;3.2 “Progress payments” means amounts billed for work performed onproperties sold in respect of property development activities, whetheror not they have been paid;3.3 “Project” means a cluster of development units erected within adesignated geographical area forming a cost-accumulating centre andincludes vacant lots developed for sale, and where a cluster ofdevelopment unit is erected in more than one phase, the developmentunits erected in each phase shall be treated as a separate cluster ofdevelopment units erected within a designated geographical area;3.4 “Property developer” means a company, an individual, a partnership,a co-operative society, a body of persons, who or which engages in orcarries on or undertakes or causes to be undertaken propertydevelopment;3.5 “Property development” means the activity of acquiring land for thepurpose of developing, constructing or causing to be constructedthereon and selling completed residential, commercial or industrialbuildings, whether as a whole or by parcels therein, and developmentand sale of vacant lots for the construction of such buildings thereonincluding homesteads, hobby farms, orchards or for other similarpurposes;3.6 “The DGIR” refers to the Director General of Inland Revenue BoardMalaysia.4.
Date of commencement of business
 4.1 The date of commencement of a property development business is aquestion of fact. Generally, the DGIR deems a property developmentbusiness commences on a date when some significant activities or
of 00

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