news

Aspen Group reaches settlement of RM56.4m tax with IRB

KUALA LUMPUR (Oct 7): Aspen (Group) Holdings Ltd said its wholly-owned indirect subsidiary Aspen Vision Land Sdn Bhd (AVL) and three other subsidiaries of the group had entered into composite agreements with the director-general of the Inland Revenue Board (IRB) for a sum of RM56.4 million (total tax liability) as the full and final global settlement of all potential additional tax claims for years of assessment 2014 to 2020.

Aspen said in a statement filed with the Singapore Exchange (SGX) on Wednesday that out of the total tax liability, RM19.63 million was paid to the IRB upon signing of the agreements.

This resulted in a balance of tax payable of RM36.77 million, which will be settled via instalment payment over six years, it said.

According to Aspen, the settlement is not expected to have a material financial impact on the company’s current financial year ending Dec 31, 2021 (FY21) as the IRB has agreed on a consolidated basis at a group level that RM40.73 million from the total tax liability attributable to AVL will be allowed to be treated and claimable as tax credit in the Aspen Vision City development for past, current and future projects together with unsold inventories on hand.

In view of the out-of-court settlement, it said, AVL will withdraw its application with the High Court for leave to commence a judicial review to challenge the notice.

“The board would like to emphasise that the settlement with the IRB is not an admission of liability or that the group carried out tax evasion or concealment of information from the IRB.

“The settlement is undertaken because the company does not wish to be engaged in protracted litigation with the IRB and wishes to resolve the matter amicably and expeditiously,” it said.

Aspen on Aug 25 received from the IRB a notice of additional assessment for the year of assessment 2014, including penalties totalling RM175.44 million.

The notice was raised by the IRB in relation to a sale-of-land transaction involving previous landowner AVL and nominated sub-purchasers in 2014.

The additional assessment arose from the adjustment made by the IRB, treating the whole transaction value as a "gain" for income tax purposes for AVL without recognising any cost whatsoever for the said land transaction.

“This erroneous treatment made the entire cost of the said land transaction as a purported gain,” said Aspen.

Thus, AVL, upon consultation with and on the advice of its tax solicitors, on Sept 6 initiated legal proceedings in the High Court for leave to commence a judicial review and a stay of the enforcement of the notice pending the final and full determination of AVL’s judicial review application.

Get the latest news @ www.EdgeProp.my

Subscribe to our Telegram channel for the latest stories and updates 

Click here for more property stories

Like our content? Check out Narratives – where we curate stories based on topics to keep you well and broadly informed about Malaysian real estate.

Looking for property? Check out Location Scan, where we summarize all available options and facts you need in a few clicks. We have updated the tool to include MRT3 stations too.

Curious how much you can borrow? Use LoanCheck to get your maximum loan eligibility from various banks, or LoanReport to get a FREE CTOS/CCRIS credit report.
SHARE
RELATED POSTS
  1. Najib, Nazifuddin granted interim stay of execution in tax arrears suit
  2. IRB CEO’s contract cut short, deputy takes over
  3. Najib’s application to quash RM1.69b IRB bankruptcy claim set for Dec 7