He said the only donation exempted from tax is from parents and loved ones as these are considered as gifts and have nothing to do with services rendered.
“If someone gets a donation, but not from parents or a child, the question arises: why did you get it?” he said on the sidelines of a conference titled “Malaysia Baru’s Tax Reform Agenda – What’s Next?” here today.
He added that if the funds had gone to a political party, it would be viewed from a different perspective.
“If a party received it, it would not be taxable. It is taxable if the funds were divested into property and such. But when an individual receives it, that’s different,” he said, adding that it is important to establish the main purpose of the donation and its origin.
Veerinderjeet was answering questions on former prime minister Najib Razak’s reported RM1.5 billion tax bill, and an alleged RM2.6 billion donation from Saudi Arabia.
Earlier, Inland Revenue Board CEO Sabin Samitah said in his speech that tax on foreign donations or income is reviewed on a case-by-case basis.