26/05/2025

BIZ & FINANCE MONDAY | MAY 26, 2025

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Can you claim credits for tax paid abroad? I NDIVIDUALS and other taxable entities such as companies, trusts, limited liability partnerships, coopera the taxes are suffered in countries where there are no double tax agreements, the income should Until Dec 31, 2026, all entities other than individuals will be exempted from Malaysian tax on foreign-sourced dividends and foreign tax imposed on the foreign income or the Malaysian tax chargeable in respect of the foreign income, whichever is lower. income sourced in Malaysia and taxable in Malaysia.

Planning the recognition and the flow of foreign income into Malaysia is crucial to take advantage of the benefits provided under the double tax agreement to avoid double taxation. It is also important to understand the anti-avoidance provisions such as the principal purpose test and the general anti avoidance provisions that are embedded in many treaties to avoid taxpayers from treaty shopping.

be similar to the income recognised in Malaysia for income tax purposes. The tax suffered overseas will only be available for crediting against the similar income being taxed in Malaysia. It is possible for the foreign income to be brought into the Malaysian books of accounts such as interest income or rental income earned overseas without being taxed in Malaysia on the grounds that the income was not remitted into Malaysia. In this case, the tax credit will not be available at the time of recognition of the income. However, the same income to be remitted later at which point in time the tax credit will be available to be offset against the Malaysian tax payable on that income.

Any unutilised tax credits which cannot be offset against Malaysia taxes cannot be carried forward. Foreign income will be subject to Malaysian tax if it is derived or sourced from Malaysia. A simple example would be where a Malaysian IT company enters into a contract with a foreign company to install software overseas by deploying its people for short periods in the overseas country. The staff installing the software will be under the direction of the Malaysian company, and the business relationship will be maintained between the overseas customer and the Malaysian head quarters. In such an instance, since the brains of the business and the direction of the business are in Malaysia, it will be regarded as

capital gains remitted into Malaysia. Individuals are exempted on all income remitted into Malaysia until Dec 31, 2036. During this period, the tax credits cannot be utilised against Malaysian taxes on sources of income. There are two types of tax credits – bilateral credits and unilateral credits. An election should be made within two years after the end of the year of assessment. In the case of bilateral tax credits, the claim cannot exceed the Malaysian tax imposed on the foreign income. Unilateral credit is appli cable where the foreign income is derived from a country with which Malaysia does not have a full double tax agreement. In the case of unilateral credits, the claim will be limited to half of the

tives, etc, exporting goods and services or carrying on business overseas may be subject to foreign taxes on the profit and capital gains generated overseas. Passive income such as interest income, rental income, dividend income, royalty income may be subject to foreign income tax in the form of withholding tax. Can Malaysian taxpayers claim tax credit in Malaysia for tax suffered overseas? Yes, you can claim the tax credit, but it will be confined to the taxes defined in the double tax agreements. Taxes based on fixed assets or turnover may not qualify for tax credits unless they are specified in the double tax agreements. In case

However, you can avoid these problems provided the substance requirements can be met in the respective countries where the income is generated and flows through finally back into Malaysia. This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com). Allianz Malaysia starts FY25 on strong note PETALING JAYA: Allianz Malaysia Bhd recorded insurance revenue of RM1.53 billion for the first quarter ended March 31, 2025, an increase of 14.3% over the RM1.34 billion recorded in the same quarter a year ago. Gross written premiums (GWP) for the first three months of the year rose to RM2.01 billion from RM1.90 billion the year before. The group’s total assets as at March 31, 2025 stood at RM28.59 billion compared to RM28.49 billion as at Dec 31, 2024. “We started the year strong, sustaining the momentum from the previous year with both our life and general subsidiaries growing strongly. Going into the second quarter and beyond, we remain focused on driving key initiatives to fulfil the needs of our customers and agents, while staying agile and adaptable in growing the business,” said Allianz Malaysia CEO Sean Wang. The general insurance subsidiary of the group, Allianz General Insurance Company (Malaysia) Bhd, recorded RM978 million in GWP for the quarter in focus, reflecting a 10.6% increase from RM884.6 million a year earlier. The general insurance segment posted insurance revenue of RM862.5 million in the first three months of 2025, an increase of 14.3% from RM754.8 million the year before. Profit before tax (PBT) stood at RM159.7 million, up 20.7% from RM132.3 million recorded the year prior. Allianz General maintained its pole position in the industry with a market share of 14.9%, mainly driven by strong motor and commercial growth. “We saw robust growth in our motor and commercial business over the January to March 2025 period, which strengthened our market leadership and deepened our commitment towards providing the best services to our customers,“ said Wang, who is also CEO of Allianz General. The group’s life insurance subsidiary, Allianz Life Insurance Malaysia Bhd, saw GWP grow to RM1.03 billion in the first quarter of 2025, from RM1.02 billion a year ago. Annualised new premiums came in at RM213.5 million for the quarter in review, following the RM234.8 million posted in the previous year. PBT rose to RM126.9 million, up 3.8% from RM122.3 million recorded in the corresponding quarter of 2024. Allianz Life’s market share as at March 31, 2025 stood at 11.8%, with the company retaining its number four rank in the industry.

Pecca’s nine-month earnings increase to RM44m PETALING JAYA: Malaysian automotive leather upholstery manufacturer Pecca Group Bhd announced profit after tax (PAT) of RM44.1 million for the nine months ended March 31, 2025 (9M25), a 9.1% increase compared to RM40.5 million in the corresponding period of the previous year. Revenue stood at RM171.7 million compared to RM188.3 million previously.

PETALING JAYA: AwanBiru Technology Bhd (Awantec) posted profit after tax of RM1 million for the third quarter ended March 31, 2025 (Q3’25), reversing a RM3.7 million loss in the previous quarter. Revenue rose to RM63.7 million, supported by strong contributions from strategic accounts. As part of its transformation strategy, Awantec has broadened its digital solutions and services portfolio with enterprise-focused offerings in artificial intelligence, cybersecurity, Executive director Hugo Teoh Zi Yi said: “Pecca has demonstrated resilience in navigating the automotive landscape, with our focus on operational efficiency enabling us to achieve robust profitability. Building on our foundation, we are expanding our presence in the high-growth aviation sector, and actively pursuing strategic collaborations, particularly with innovative automotive players. These initiatives come alongside our strong foundation in the OEM segment and are expected to drive Pecca’s sustainable growth.” With the robust 9M25 results, Pecca declared a third interim dividend of 1 sen per share for the financial year ending June 30, The group achieved an enhanced PAT margin of 25.7% in 9M25 from 21.5% in the prior year, primarily driven by enhanced production cost efficiency, lower admini strative expenses and favourable sales mix. Meanwhile, the group’s performance in the third quarter ended March 31, 2025 (Q3’25) remained robust, with PAT of RM14.2 million, mirroring the RM14 million achieved in the same quarter of the previous year. The stable profitability was attained despite a slight decrease in revenue to RM53.1 million in Q3’25, compared to RM59.5 million in Q3’24, due to lower sales volume resulting from temporary factory closures by customers for maintenance which coincided with domestic holidays in January and March 2025.

Pecca declared a third interim dividend of 1 sen per share for FY25.

Awantec reports Q3 net profit of RM1m after loss in previous quarter 2025 (FY25). This brings the total dividends for FY25 to 4 sen per share, underscoring the group’s commitment to delivering shareholder value. The dividend is scheduled with an ex date of June 9 and a payment date of June 20. As for operations, the group’s aviation division is gaining momentum, marked by the successful completion of a business class seat cover replacement programme for an Airbus A320 aircraft operated by a government owned international airline. The project adds to Pecca’s growing portfolio in the aviation sector, which includes servicing seat covers for both local and international civilian and government helicopters. Additionally, the group has completed multiple maintenance, repair, and overhaul projects for both local and international airlines.

Prestariang Skin Sdn Bhd received RM201.4 million as full and final settlement pursuant to the consent order recorded in the Court of Appeal of Malaysia on March 24. “This marks a pivotal moment for Awantec, providing both certainty and expedience. With this settlement, the group can now fully focus on our growth drivers, particularly in AI and cybersecurity, while investing in the enhancement of its technical capabilities to drive innovation,” Awantec said in a statement.

e-invoicing and enterprise resource planning. These solutions and services support the government’s digital agenda and strengthen the group’s role as a Google Cloud Premier Partner in Malaysia. “This allows us to fully focus on scaling high-value digital services that meet the country’s growing appetite for AI, cybersecurity and cloud infrastructure,” said Awantec CEO Azlan Zainal Abidin. On May 14, Awantec’s subsidiary