MASB Exposure Draft 79 Determination of Announced Tax Rate as Substantively Enacted for Measurement of Deferred Tax Assets and Liabilities


The Malaysian Accounting Standards Board (MASB) has approved the release of MASB Exposure Draft 79 Determination of Announced Tax Rate as Substantively Enacted for Measurement of Deferred Tax Assets and Liabilities for public comment.

The objective of the Exposure Draft is to seek feedback on the tentative conclusion by the MFRS Application and Implementation Committee (MAIC) in relation to a request received about the determination of the announced tax rate by the government as substantively enacted for the measurement of deferred tax assets and liabilities. 

In the fact pattern described in the request, the submitter noted that the International Accounting Standards Board Exposure Draft ED/2023/1International Tax Reforms – Pillar Two model Rules proposed companies to provide specific disclosures before and after the Pillar Two model rules are in effect, that is, when: 

• the rules are enacted or substantively enacted but not yet in effect

• the rules are in effect  

For the purpose of applying the proposed amendments, the submitter requested for a guidance, on whether the Global Minimum Top-up Tax (GMTT) that was proposed for implementation in 2024 during Government 2023 Budget, be considered as enacted or substantively enacted for the 2023 reporting period. 

The MAIC concludes that the announced tax rates by the government as “substantively enacted” for the measurement of deferred tax assets and liabilities shall be fulfilled after the voting by the Members of the House of Representatives by a simple majority after the Third Reading, since:

(a) historically, there were no changes in tax rate(s) at that stage, thereby maintaining the outcome of the tax rate(s) pending the concurrence of the Senate and the assent by His Majesty the Yang di-Pertuan Agong; and/or

(b) the tax rate(s) shall remain fixed where subsequent steps after the voting by the Members of the House of Representatives by a simple majority after the Third Reading shall not affect the tax rate(s).

Click here to download the Exposure Draft.

Invitation to comment

The Exposure Draft is open for comment until 6 October 2023.

You may provide your comments via email to us at technical@masb.org.my

Click here to submit your comments. 

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1 International Tax Reform—Pillar Two Model Rules, which amended IAS 12 Income Taxes was issued by IASB in May 2023, and the equivalent amendments to MFRS 112 Income Taxes was issued by MASB in June 2023.