Foreign donations taxable on case-by-case basis, says LHDN

LHDN boss Sabin Samitah says taxing foreign donations is done on a case-by-case basis. (Bernama pic)

KUALA LUMPUR: The Inland Revenue Board (LHDN) today said donations from abroad are still taxable but on a case-by-case basis, following former prime minister Najib Razak’s claim that the RM2.6 billion in his bank account should not be taxed as it was a donation from Saudi Arabia.

“Foreign donations will be assessed on a case-by-case basis in regard to their taxability,” LHDN CEO Sabin Samitah told reporters after officiating the Malaysian Tax Conference 2019 here.

The Edge had reported that Najib was slapped with a RM1.5 billion tax bill for some RM4 billion he received between 2011 and 2017, including the RM2.6 billion donation purportedly received from Saudi Arabia’s King Abdullah Abdulaziz in 2012.

Najib has not confirmed the report, but insists that the money was a political donation which was not taxable due to certain grey areas in accounting terms.

Malaysia practises the territorial system of taxation where only income derived in Malaysia is taxed.