Federal Court Rules In Favour Of IRB In TNB Tax Assessment Appeal

PUTRAJAYA, July 2 (Bernama) — The Federal Court today allowed the Inland Revenue Board of Malaysia’s (IRB) appeal in relation to the notice of additional tax assessment issued to Tenaga Nasional Berhad (TNB) for the year of assessment 2018.

In a statement filed with Bursa Malaysia, TNB stated that the Federal Court had set aside the earlier decisions of the High Court and the Court of Appeal, which had granted its judicial review application to quash the notice of additional assessment dated July 13, 2020.

TNB said the notice of additional assessment dated July 13, 2020, issued by IRB to the company for the year of assessment 2018 initially amounted to RM1,812,506,384.64 billion.

“However, following a penalty remission granted by IRB through a consent order dated Dec 29, 2020, the net amount was reduced to RM1,250,004,403.20 billion,” said TNB, adding that this was to be read with its previous announcements made between July 2020 and June 2025.

TNB further stated that it is assessing the full impact of today’s decision.

TNB added that the Federal Court held that as a utility company, the applicable Schedule is 7B of the Income Tax Act 1967, namely Investment Allowance instead of Schedule 7A Reinvestment Allowance.

“Accordingly, in light of the Federal Court’s decision, TNB will be pursuing to claim for the Investment Allowance under Schedule 7B.

“This decision has a potential negative financial impact on the earnings and net assets of the company and Group for the financial year ending 31 December 2025.

“However, the decision is not expected to have any operational impact on the company and group,” said TNB. 

— BERNAMA