Tag: Income Tax Exemption

Review of Tax Incentives for Bionexus Status Company
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Updated on 15 July 2023- Dialogue between MOF, LHDNM, and CTIM [21/6/2023]
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To Download Revised Budget 2023 Speech and some other related publications – https://www.ccs-co.com/post/budget-2023-malaysia-madani

Current Position

“Bio Nexus Status Company” means a company incorporated under the Companies Act 2016 [Act 777] engaged in the life sciences business.

Tax incentives for BioNexus status companies are given as follows:
1. a company undertaking biotechnology activity and approved with BioNexus status:
  1. Income Tax Exemption of 70% on statutory income commencing from the first statutory income for a period of 10 or 5 years, subject to new or existing business (expansion project);
  2. concessionary tax rate of 20% on income from qualifying activities for 10 years upon the expiry of the tax exemption period;
  3. Double Tax Deduction on research & development expenditure;
  4. Industrial Building Allowance on building for biotechnology research activities; and
  5. Import Duty Exemption on raw materials / components and machinery / equipment.
2. a company that undertakes investment in a BioNexus status subsidiary company engaging in a new project is given a tax deduction equivalent to the amount of investment made in the basis year the investment is made.
The tax incentive is for applications received by the Malaysian Bioeconomy Development Corporation from 1 January 2021 until 31 December 2022.

Proposal

To encourage more industry players, it is proposed tax incentives be reviewed as follows:
- income tax exemption on statutory income be increased from 70% to 100%; and
- the application period for tax incentives is extended for 2 years.
Effective Date

For applications received by the Malaysian Bioeconomy Development Corporation from 1 January 2023 until 31 December 2024.

Updated on 15 July 2023- Dialogue between MOF, LHDNM, and CTIM [21/6/2023]

BioNexus status companies also get an income tax exemption which is equivalent to the allowance based on 100% of qualifying capital expenditure (“QCE”), i.e. Investment Tax Allowance (“ITA”).

CTIM sought to confirm that the proposed two years application period extension applies to all tax incentives for BioNexus status companies, including the ITA and is not just restricted to the items listed in Appendix 19.

MOF’s Feedback:

Extending the 2-year application period applies to all tax incentives for BioNexus status companies, including the Investment Tax Allowance.

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17
February 26, 2023
Extension of Tax Incentive for the Shipbuilding and Ship Repairing Industry
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Updated on 15 July 2023- Dialogue between MOF，LHDNM， and CTIM [21/6/2023]
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Update: The Ismail Sabri Government Budget is no longer applicable. Malaysia’s national budget for 2023 was re-tabled again in February 2023.

To Download Revised Budget 2023 Speech and some other related publications – https://www.ccs-co.com/post/budget-2023-malaysia-madani

Background to the Shipbuilding and Ship Repairing Industry

Malaysia’s strategic location on a crucial sea lane has made the country well-positioned to access global trade routes.

The Greek geographer Ptolemy described us as the “Golden Khersonene,” meaning Golden Peninsula, in his atlas Geographica in AD 150.

In modern times, the Malaysian shipbuilding and ship repair (SBSR) sub-sector encompass companies that manufacture seagoing vessels and marine equipment, as well as providers of related services, including ship repair, design, upgrade/ conversion of vessels and maintenance, repair and overhaul (MRO).

Introduced in 2016, the SBSR industry incentives are available for both new and existing companies until the end of 2022.

Current Position

Companies undertaking SBSR activities in Malaysia are eligible for tax incentives as follows:

New Company
1. Pioneer Status with an income tax exemption of 70% of statutory income for 5 years; or
2. An Investment Tax Allowance of 60% on Qualifying Capital Expenditure incurred within 5 years and can be set off against 70% of the statutory income for each assessment year.
Existing Company

Investment Tax Allowance of 60% on qualifying capital expenditure incurred within 5 years and can be set off against 70% of the statutory income for each assessment year.

The tax incentive is for applications received by the Malaysian Investment Development Authority (MIDA)from 1 January 2020 until 31 December 2022.

In addition, SBSR companies with bona fide status are also eligible for import duty and sales tax exemption under Item 53, Customs Duties (Exemption) Order 2017 and Item 44, Schedule A, Sales Tax (Persons Exempted from Payment of Tax) Order 2018.

These exemptions are given for bona fide status applications received by the Ministry of Finance until 31 December 2022.

Proposal

To position Malaysia as a regional hub for SBSR, it is proposed that existing tax incentives and bona fide status be extended for 5 years.

Effective Date
- For SBSR applications received by MIDA from 1 January 2023 until 31 December 2027.
- For bona fide status applications received by the Ministry of Finance from 1 January 2023 until 31 December 2027.
Updated on 15 July 2023- Dialogue between MOF，LHDNM， and CTIM [21/6/2023]

LHDNM confirms that for Ship Building and Ship Repairing activities, the mechanism for implementing tax incentives is through PU(A)112/2006 or PU(A)113/2006.

CTIM sought confirmation that the qualifying company could follow the tax treatment (e.g. losses or capital allowance) mentioned under PU(A) 112/2006 and PU(A) 113/2006, regardless of whether the approval letter made reference to the said PU orders.

LHDNM’s Feedback:

For Ship Building and Ship Repairing activities, the approval letter will specify the specific provisions of the law in granting tax incentive approval and the prescribed approval conditions to ensure that the approved company carries out proper tax compliance services and adheres to the established approval conditions.

Disclaimer:

The articles, templates, and other materials on our website are provided only for your reference.

While we strive to ensure that the information presented is current and accurate, we cannot guarantee the completeness, reliability, suitability, or availability of the website or its content, including any related graphics. Consequently, any reliance on this information is entirely at your own risk.

If you intend to use the content of our videos and publications as a reference, we recommend that you take the following steps:
1. Verify that the information provided is current, accurate, and complete.
2. Seek additional professional opinions, as the scope and extent of each issue, may be unique.
免责声明：

我们网站上的文章、模板和其他材料只供参考。

虽然我们努力确保所提供的信息是最新和准确的，但我们不能保证网站或其内容，包括任何相关图形的完整性、可靠性、适用性或可用性。因此，您需要承担使用这些信息所带来的风险。

如果你打算使用我们的视频和出版物的内容作为参考，我们建议你采取以下步骤：
1. 核实所提供的信息是最新的、准确的和完整的。
2. 寻求额外的专业意见，因为每个问题的范围和程度，可能是独特的。
Keep in touch with us so that you can receive timely updates

请与我们保持联系，以获得即时更新。

1. Website ✍️ https://www.ccs-co.com/ 2. Telegram ✍️ http://bit.ly/YourAuditor 3. Facebook ✍
- https://www.facebook.com/YourHRAdvisory/?ref=pages_you_manage
- https://www.facebook.com/YourAuditor/?ref=pages_you_manage
4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy

6. LinkedIn ✍ https://www.linkedin.com/company/74734209/admin/

16
February 26, 2023
Tax Incentives for Chicken Rearing in Closed House System
Update: The Ismail Sabri Government Budget is no longer applicable. Malaysia’s national budget for 2023 was re-tabled again in February 2023.

To Download Revised Budget 2023 Speech and some other related publications – https://www.ccs-co.com/post/budget-2023-malaysia-madani

Current Position

RA was extended to the agricultural sector to encourage local food production and thus increase its supply.

In Budget 2003, chicken and duck farmers who switched from an open house system to a closed house system were given Reinvestment Allowance (RA) for 15 consecutive years.

The RA is given on 60% of qualifying capital expenditure incurred and is allowed to be set off against 70% (100% for promoted areas) of statutory income.

For YAs 2009 and 2010, chicken and duck rearers who reinvest to expand the closed house system in existing or new locations approved by the Ministry of Agriculture and Agro-based Industry are given incentives as follows:
- projects located in the promoted areas are eligible for RA of 60% on qualifying capital expenditure to be set off against 100% of the statutory income, and
- projects located outside the promoted areas are eligible for RA of 60% on qualifying capital expenditure to be set off against 70% of the statutory income.
Proposal

To encourage more chicken rearers to adopt an environmental-friendly closed house system, it is proposed tax incentives be given as follows:
1. Accelerated Capital Allowance (ACA) 100% on the qualifying capital expenditure; and
2. Income Tax Exemption of 100% equivalent to the qualifying capital expenditure.
These tax incentives are given on the Qualifying Capital Expenditure incurred from the year of assessment 2023 until the year of assessment 2025 and are to be fully absorbed within a year.

Effective Date

From the year of assessment 2023 until the year of assessment 2025.
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Keep in touch with us so that you can receive timely updates |

要获得即时更新，请与我们保持联系

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22
February 26, 2023