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BASIS PERIOD
DR ARYATI JULIANA SULAIMAN 1
BASIS OF ASSESSMENT
All income of persons other than a company, limited liability partnership (LLP), trust body and
cooperatives society are assessed on a calendar year basis (1 January - 31 December)
Company, LLP, trust body and cooperatives society are the financial year ending in that particular
year of assessment
Section 21A (2) stated that where a company, LLP, trust body or co-operative society has made up the
accounts of its operation for a period of 12 months ending on a day other than 31 December in the basis
year, that period shall constitute the basis period for that year of assessment for any sources of income.
Example 2: Bravo Sdn Bhd closes its account on 31 July each year. What is the basis period for
Bravo Sdn Bhd for YA 2022?
Suggested answer: Basis period for Bravo Sdn Bhd for YA 2022 is 01/08/2021 – 31/07/2022
Suggested answer:
Based on the provision of Section 21A(4)(a), that period shall constitute the basis period for the first year
of assessment. Therefore:
Year of Assessment Basis Period Period
YA 2022 01/02/2022 – 31/10/2022 9 months
YA 2023 01/11/2022 – 31/10/2023 12 months
The first account closed in 2022. The first accounting period from 1 February until 31 October 2022 (9 months) is accepted as
the basis period for the first year of assessment.
Please note that there is no basis period for year of assessment 2021. Although the operation began in
2021, the first accounts closed in 2022. The period of 15 months ending on 31 May 2022 is taken as the
basis period for the year of assessment 2022.
Suggested answer:
Based on provision of Section 21A(4)(c), the period shall constitute the basis period for the year of
assessment immediately following the second year of assessment and there shall be no basis period for
the first and second year of assessment. Therefore:
Year of Assessment Basis Period Period
YA 2020 No basis period
YA 2021 No basis period
YA 2022 01/10/2020 – 31/03/2022 18 months
YA 2023 01/04/2022 – 31/03/2023 12 months
Please note that there is no basis period for year of assessment 2020 and 2021. The first set of accounts
are prepared covering 3 calendar years (2020 to 2022) and closed in 2022. The period (18 months) is
accepted as the basis period for the first year of assessment (YA 2022).
Example 10: Vortex Bhd normally prepared its account on 31 March each year. In 2022, the date has been changed to 31 December. The accounts were prepared as follows:
01/04/2022 – 31/12/2022 (9 months - failure year, ending in the same year in, i.e. - 2022)
Determine the basis period for Vortex Bhd for year assessment 2022 to 2024.
Suggested answer:
For YA 2023 the basis period covers the two accounting periods which are from 1 April 2022 to 31 December 2022 and 1 January 2023 to 31 December 2023. The basis period for YA
2024 is from 1 January 2024 until 31 December 2024.
Example 13: On 1 December 2022, the board of director of Adam Bhd decided to change its financial year
end from 30 November to 28 February. The new accounting period covers the periods from 1 December
2022 to 28 February 2024 (15 months.).
Determine the basis period of Adam Bhd for the year assessment of 2022 to 2024.
Suggested answer:
Normal accounting date for Adam Bhd is 30 November and it was changed to 28 February beginning from
2024. The new accounting period from 1 December 2022 to 28 February 2024 will be divided into two basis
period as follows:
Year of Assessment Basis Period Period
YA 2022 01/12/2021 - 30/11/2022 12 months (normal)
YA 2023 01/12/2022 - 31/07/2023 8 months *
YA 2024 01/08/2023 - 28/02/2024 7 months
* Since total number of months is odd (15 months) or 7.5 months for each basis period, the 0.5 will be
added to the first failure year.
DR ARYATI JULIANA SULAIMAN 18
COMPANY JOINING A PARTNERSHIP
A company may join a partnership to venture into a new business. If a company joins a partnership, the
partnership will be regarded as a new business of the company. The basis period of the existing business is also the
basis period for partnership source.
Example 14: Restu Sdn Bhd closes its account on 30 April every year. In 2022, the company joined a partnership
which commenced business on 18 March 2022. The first account of the partnership has been prepared for a
period to 30 June 2022. Determine the basis period of the partnership for the year of assessment 2022 and 2023.
Suggested answer:
In this case, the basis period of the partnership has to follows the accounting period of Restu Sdn Bhd. Therefore,
the basis periods for partnership source for the year of assessment 2022 and 2023 would be as follows:
Year of Assessment Basis Period
YA 2022 18/03/2022 – 30/04/2022 (2 months)
YA 2023 01/05/2022 – 30/04/2023 (12 months)
The failure year occurs in 2021. The DGIR will determine the basis periods for year assessment 2021 onwards. The new
accounting period (01/04/2021 – 20/07/2021) and the following accounting period (21/07/2021 – 20/01/2022) are
combined and taken as the basis period for the year of assessment in the failure year. The next two 6-month accounting
periods form the basis period for the subsequent years of assessment.
Under this situation the first set of account for the failure year is from 01/10/2021 until the date of liquidation
15/08/2022 (10 months 15 days). The period is taken as a basis period for the year assessment 2022. The next two
6-month accounting periods form the basis period for the subsequent years of assessment.
The failure year occurred in YA 2022 (16 months), from 01/07/2021 to the date before the liquidation
(31/10/2022). The date is taken for the basis period for the year of assessment 2022. The next two 6-month
accounting periods form the basis period for the subsequent years of assessment.
The period 01.11.2021 to 10.02.2023 involved two years of assessment, the periods are divided into two periods
(YA 2022 – 8 months, YA 2023 – 7 months 10 days). For uneven division of basis period, any fraction of a month
should be treated as failing in the first period to form a complete month.
The basis period from 01/01/2022 to 09/01/2022 is too short (only 9 days) to be taken as a basis period for 2022. The
period does not reflect the activities carried out by the company. For practical purposes the DG will accept accounting
period for at least three months. Therefore, the period from 01/01/2022 to 09/01/2022 (9 days) will be combined with
the next period (10/01/2022 to 09/07/2022 – 6 months) as a basis period for the year of assessment 2022. The next
two 6-months periods form the basis period for the subsequent year of assessment.
The first failure year was in 2022. For 2022, the DGIR shall direct the basis period for the failure year by applying the
principles set out by PR 8/2014. The accounts in the failure year were prepared for a period of less than 12 months and
ended in same year. The period from 1/1/2022 to 19/11/2022 is accepted as the basis period for year of assessment
2022. The accounts in the second failure year (2023) were prepared for a period of less than 12 months and ended in
the following year. Therefore, the period is combined with the next period to form a basis period for year of assessment
2023. The next two 6-month periods form the basis period for the following year of assessment
Determine the basis periods of Bintang Cerah Sdn Bhd for the year of assessment 2021 to 2024.
Note: The accounting period of the failure year is accepted as a basis period for the year of assessment 2022. If the
company’s accounts are prepared for a period of 12 months ending on any date other than 31 December in a basis
year, that accounting period is the basis period for the year of assessment in which the accounts are closed. The next
two 6-month periods form the basis period for the following year of assessment.
New
Account ended on
30 June 2022 01.01.2022 – 30.06.2022 2022 01.01.2022 – 30.06.2022 (6 months) At the latest
30 May 2022