The Income Tax (Exemption) Order 2024 [P.U. (A) 37/2024] provides tax exemptions for IDR-status companies undertaking qualifying activities in approved nodes within the Iskandar Development Region (“IDR“)
This Order aims to promote investments in certain sectors to drive regional economic growth.
The Order defines an IDR status company and specifies the qualifying activities across sectors like creative industries, education, healthcare, logistics, tourism, global business services and digital business that are eligible for the 100% income tax exemption.
The exemption is for a period of 5 consecutive years. It applies to statutory income equivalent to capital allowances on qualifying capital expenditure incurred for buildings, machinery or plants used to carry out the approved qualifying activities.
Companies must meet certain conditions to qualify, and the Minister can withdraw the exemption if conditions are breached.
Provisions are also included to avoid double tax benefits.
Except for subitem 3(e) and items 6 and 7 of the Schedule, this Order is deemed to have come into operation on 24 October 2013.
Subitem 3(e) and item 7 of the Schedule are deemed to have come into operation on 1 January 2021.
Item 6 of the Schedule is deemed to have come into operation on 1 November 2016.
In conclusion, the Income Tax (Exemption) Order 2024 grants attractive tax incentives for IDR-status companies to spur investments and economic activities in targeted sectors within the Iskandar Development Region between 24 October 2013 and 31 December 2024. We encourage readers to download the Income Tax (Exemption) Order 2024 by clicking the attachment below for a comprehensive look at the contents:-
