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As an ACCA student, you will have a lot of tax-related areas in your studies and you cannot run away from hearing the word “case laws”. Here are something you might find interesting.

This article is shared with you from an external publication accessible from TheMalaysian awyer.com with the title of TOP 5 TAX CASES 2021. Excerpts:

#1: Continental Choice Decision – Court of Appeal Determination of a Real Property Company

Grounds by: Darryl Goon JCA

(Continental Choice Sdn Bhd & Anor v Ketua Pengarah Hasil Dalam Negeri [2021] 4 MLJ 796, CA and grounds of judgment dated 11 May 2021)

Why is the case important?

The main issue was whether real property gains tax (RPGT) is payable upon the disposal of shares in a company whose total tangible assets consist mainly of land. The case dwelled primarily in the construction of revenue legislation and interpreting Paragraph 34A of Schedule 2 of the Real Property Gains Tax Act 1976 (RPGTA).

In determining a real property company (RPC) under Paragraph 34A of Schedule 2 of the RPGTA, the Court of Appeal held that an RPC is as defined, and not based on the intention or objective of a person who acquired or disposed of shares in such a company. The company turns into an RPC once the defined value of its real property and/or shares in RPC exceeds 75% of its total tangible assets. The intention and purpose for acquiring the shares in the company are irrelevant.

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