"Business purpose" test for transfer of assets in business merger, consolidation or expansion

The tax authorities released the Regulation of the Director General of Taxation No. PER-28/PJ./2008 dated 19 June 2008 setting out details of the "business purpose" test which must be met by taxpayers who wish to apply the book value of assets that are transferred as part of a business merger, consolidation or expansion. An application for the use of the assets' book values must be submitted to the Director General, who would refer to the following criteria in deciding whether o…