PUTRAJAYA: The Federal Court has ruled in favour of the Inland Revenue Board of Malaysia (IRB) regarding an additional tax assessment notice issued to Tenaga Nasional Berhad (TNB) for the year 2018.
The decision overturns previous rulings by the High Court and Court of Appeal, which had sided with TNB in its judicial review application.
TNB disclosed in a Bursa Malaysia filing that the initial tax assessment notice dated July 13, 2020, amounted to RM1.81 billion.
However, after a penalty remission granted by IRB in December 2020, the net amount was reduced to RM1.25 billion.
The company noted that this adjustment aligns with its earlier announcements made between 2020 and 2025.
The court determined that TNB, as a utility company, falls under Schedule 7B of the Income Tax Act 1967, which pertains to Investment Allowance, rather than Schedule 7A for Reinvestment Allowance.
TNB stated it will now pursue claims under Schedule 7B.
While the ruling may negatively affect TNB’s earnings and net assets for the financial year ending December 31, 2025, the company clarified that its day-to-day operations will remain unaffected.
TNB is currently evaluating the full financial implications of the decision.
