Tag: Tax Incentive

  • Automation Capital Allowance for Automation Equipment in Manufacturing, Services & Agriculture

    Automation Capital Allowance for Automation Equipment in Manufacturing, Services & Agriculture

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

    Update: The Ismail Sabri Government Budget is no longer applicable.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

    Automation Capital Allowance (ACA) is a tax incentive introduced in Budget 2015 to encourage manufacturers to engage in innovative and productive activities, expedite the adoption of automation, especially for labour-intensive industries, and further spur automation initiatives.

    The incentive is split into 2 categories of industries i.e.

    • Category 1: High Labour-intensive Industries (Rubber products, plastics, wood, furniture and textiles); and
    • Category 2: Industries Other than Category 1

    It was proposed in Budget 2020 that the existing Automation Capital Allowance (ACA) incentive for Category 2 of the manufacturing sector be expanded to the services sector to boost productivity and efficiency in labour-intensive industries.

    Manufacturing and services companies which incur qualifying capital expenditure on automation equipment are given tax incentives as follows:

    Category 1: Labour-Intensive Industry (rubber, plastic, wood and textile products)

    • ACA of 100% for automation equipment on the first RM4 million for Qualifying Capital Expenditure incurred and can be utilised within 1 year.

    Category 2: Industries other than Category1 including the services sector

    • ACA of 100% for automation equipment on the first RM2 million for qualifying capital expenditure incurred and can be utilised within 1 year.

    Both categories are eligible for income tax exemption equivalent to 100% of qualifying capital expenditure incurred for automation equipment. Thus, eligible capital expenditure that can be absorbed is 200%within a year.

    The tax incentive is for applications received by the Malaysian Investment Development Authority (MIDA) until 31 December 2023.

    Guideline and Procedure for the Application of Automation Capital Allowance (Automation CA) for Services Sector – for an existing company only.

    173.1-Guideline-and-Procedure-for-the-application-of-Automation-Capital-Allowance-Automation-CA-for-Services-Sector-–-for-existing-company-onlyDownload

    Effective Date

    To further drive productivity and improve efficiency through automation, it is proposed the ACA for automation equipment be enhanced as follows:

    • scope of automation to include the adaptation of Industry 4.0 elements;
    • scope of tax incentives is expanded to include the agriculture sector; and
    • capital expenditure threshold for categories 1, 2 and agriculture be aligned and increased to RM10 million.

    For applications received by MIDA and the Ministry of Agriculture and Food Security (MAFS) from 1 January 2023 until 31 December 2027.

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

    CTIM proposed the mutually exclusive rules to be applied on an asset basis instead of a company basis.

    MOF’s Feedback:

    The proposal was duly noted.

    Further studies will be conducted regarding the mutually exclusive clause to ensure its suitability for implementation.

    For assets under hire purchase, kindly confirm there is no requirement for the hire purchase instalments to commence and end within the qualifying period from 1 January 2023 until 31 December 2027 to qualify for the accelerated capital allowance (“ACA”) claim.

    In essence, as long as it is a qualifying asset, the incentive applies to the whole capital expenditure incurred.

    LHDNM’s Feedback:

    The ACA incentive also applies to assets acquired through hire-purchase agreements.

    The eligible capital expenditure for hire-purchased assets is the principal amount incurred during the basic period of a particular assessment year for assets acquired between 1 January 2023 and 31 December 2027.

    Therefore, principal payments made outside the incentive period are not eligible to enjoy this incentive.

    ACA on capital expenditure up to RM10 million is welcomed.

    Still, there should be clarity on whether it is a 200% allowance like in the past (i.e. 100% accelerated capital allowance plus 100% automation capital allowance) or just a 100% accelerated capital allowance.

    LHDNM’s Feedback:

    This extended Accelerated Capital Allowance (ACA) incentive refers to the incentive under ACA (Automation Enhancement).

    This incentive should be read and applied with the income tax order that provides an exemption equal to 100% of the ACA (Automation Enhancement) amount.

    This exemption applies to statutory income from eligible projects but is limited to 70%.

    The characteristics of the incentive are the same as the original incentive.

    This matter will be clarified in the relevant subsidiary legislation.

    MOF’s Feedback:

    The characteristics of the incentive will be the same as the original incentive.

    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 ✍

    4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy

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

    19
  • Extension of Tax Incentive for the Shipbuilding and Ship Repairing Industry

    Extension of Tax Incentive for the Shipbuilding and Ship Repairing Industry

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

    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 ✍

    4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy

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

    16
  • Review of Tax Incentive for Equity Crowdfunding

    Review of Tax Incentive for Equity Crowdfunding

    Update: The Ismail Sabri Government Budget is no longer applicable.

    Malaysia’s national budget for 2023 was re-tabled again in February 2023; for more info, please visit – https://www.ccs-co.com/post/budget-2023-malaysia-madani.

    This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023.

    Response from MOF: MOF is currently reviewing off-budget items.

    The phrase “MOF is currently reviewing off-budget items” typically refers to the Ministry of Finance (MOF) evaluating or examining expenses or financial matters that are not included in the official budget. Off-budget items are expenditures or revenue sources not directly accounted for in the regular budgeting process.

    Governments often create budgets to allocate funds for various programs, projects, and expenses. However, certain financial activities may fall outside the scope of the official budget. These off-budget items could include emergency spending, special funds, grants, subsidies, or other financial transactions not explicitly accounted for in the regular budgeting process.

    When the MOF reviews off-budget items, they are scrutinising these financial activities to assess their impact, legality, appropriateness, or potential risks. This review aims to ensure transparency, fiscal responsibility, and effective financial management within the government. It helps identify discrepancies, assess the necessity and effectiveness of off-budget items, and make informed decisions regarding their continuation or modification.

    Current Position

    In Budget 2021, individual investors who invest in equity crowdfunding platforms approved by the Securities Commission (SC) will be allowed a tax exemption for a specified amount of aggregate income.

    The proposal has been legislative under the Income Tax (Exemption) (No 4) Order 2022.

    Under the Order, 50% of the amount invested for each year of assessment will be deductible against the individual’s aggregate income, subject to the conditions as follows:

    1. the eligible amount for tax exemption is limited to RM50,000 each year of assessment;
    2. the deductible amount is limited to 10% of the aggregate income for that year of assessment. The excess amount will be disregarded;
    3. the Securities Commission Malaysia must verify the investor, investee company and amount of investment made;
    4. the investor must not have any family relationship with the investee company;
    5. the investment must be made through an equity crowdfunding platform approved by the Securities Commission Malaysia; and
    6. the investment is not allowed to be disposed of within 2 years from the date of investment.

    The tax incentive is for investments made from January 1, 2021, until December 31, 2023.

    Proposal [This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023]

    To attract more individual investors to invest in start-up companies through equity crowdfunding, it is proposed tax incentives be reviewed as follows:

    • scope of tax incentives be expanded to include investments made by individuals investor through Limited Liability Partnership Nominee Company; and
    • the investment period to be extended for 3 years.

    Effective Date

    For investment made from 1 January 2024 until 31 December 2026.

    Our website's articles, templates, and material are solely for reference. Although we make every effort to keep the information up to date and accurate, we make no representations or warranties of any kind, either express or implied, regarding the website or the information, articles, templates, or related graphics that are contained on the website in terms of its completeness, accuracy, reliability, suitability, or availability. Therefore, any reliance on such information is strictly at your own risk.

    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

    1. Website ✍️ https://www.ccs-co.com/ 2. Telegram ✍️ http://bit.ly/YourAuditor 3. Facebook ✍

    4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy

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

    16
  • Extension of Tax Incentive for Angel Investor

    Extension of Tax Incentive for Angel Investor

    Update: The Ismail Sabri Government Budget is no longer applicable.

    Malaysia’s national budget for 2023 was re-tabled again in February 2023; for more info, please visit – https://www.ccs-co.com/post/budget-2023-malaysia-madani.

    This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023.

    Response from MOF: MOF is currently reviewing off-budget items.

    The phrase “MOF is currently reviewing off-budget items” typically refers to the Ministry of Finance (MOF) evaluating or examining expenses or financial matters not included in the official budget. Off-budget items are expenditures or revenue sources not directly accounted for in the regular budgeting process.

    Governments often create budgets to allocate funds for various programs, projects, and expenses. However, certain financial activities may fall outside the scope of the official budget. These off-budget items could include emergency spending, special funds, grants, subsidies, or other financial transactions not explicitly accounted for in the regular budgeting process.

    When the MOF reviews off-budget items, they scrutinise these financial activities to assess their impact, legality, appropriateness, or potential risks. This review aims to ensure transparency, fiscal responsibility, and effective financial management within the government. It helps identify discrepancies, assess the necessity and effectiveness of off-budget items, and make informed decisions regarding their continuation or modification.

    Current Position

    According to the Income Tax (Exemption) (No 3) Order 2014, an Angel Investor is exempt from income tax in the second year of assessment following the year of assessment in which the angel investor makes an investment in an investee company.

    The total amount of income that will be exempt from taxation equals the amount of investment that the angel investor made in the company they funded (the investee company).

    The angel investor is required to satisfy the following conditions to be eligible for the income tax exemption:

    • a resident in Malaysia whose sources of income are not solely derived from business;
    • an application is made to the Minister of Finance in the period from 1 January 2013 until 31 December 2023 (extended from 31 December 2020 under the Income Tax (Exemption) (No 3) 2014 (Amendment) Order 2019) to invest in an investee company.
      • The time frame for the application period of this incentive was initially up to 31 December 2017 and given the first extension to 31 December 2020 under the Income Tax (Exemption) (No 3) 2014 (Amendment) Order 2017;
    • the angel investor does not have a parent, a parent-in-law, a child including a stepchild or adopted child, a brother or sister, a grandparent or grandchild or a spouse who makes any investment in the investee company;
    • the investment is in the form of holding ordinary shares in the investee company and is paid in cash;
    • the investment is for the sole purpose of financing the activities of the investee company as approved by the Minister, and
    • the investment shall not be more than 30% of the invested company’s total paid-up share capital.
    Investee Company
An investee company refers to a company resident in Malaysia where at least 51% of its shares are owned directly by Malaysian shareholders. It engages in activities approved by the Malaysian government.

    Footnotes

    An angel investor who has made a claim for a deduction under the Income Tax (Deduction for Investment in a Venture Company) Rules 2005 will not be eligible for the exemption under the Income Tax (Exemption) (No 3) Order 2014.

    Proposal [This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023]

    To attract more angel investors to contribute to economic activities through capital funding in investee companies, tax incentives are proposed to be extended for 3 years.

    Effective Date

    For applications received by the Ministry of Finance from 1 January 2024 until 31 December 2026

    Our website's articles, templates, and material are solely for reference. Although we make every effort to keep the information up to date and accurate, we make no representations or warranties of any kind, either express or implied, regarding the website or the information, articles, templates, or related graphics that are contained on the website in terms of its completeness, accuracy, reliability, suitability, or availability. Therefore, any reliance on such information is strictly at your own risk.

    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

    1. Website ✍️ https://www.ccs-co.com/ 2. Telegram ✍️ http://bit.ly/YourAuditor 3. Facebook ✍

    4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy

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

    19
  • Extension of Tax Incentive for Intellectual Property Development

    Extension of Tax Incentive for Intellectual Property Development

    Update: The Ismail Sabri Government Budget is no longer applicable.

    Malaysia’s national budget for 2023 was re-tabled again in February 2023; for more info, please visit – https://www.ccs-co.com/post/budget-2023-malaysia-madani.

    This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023.

    Response from MOF: MOF is currently reviewing off-budget items.

    The phrase “MOF is currently reviewing off-budget items” typically refers to the Ministry of Finance (MOF) conducting an evaluation or examination of expenses or financial matters that are not included in the official budget. Off-budget items are expenditures or revenue sources not directly accounted for in the regular budgeting process.

    Governments often create budgets to allocate funds for various programs, projects, and expenses. However, certain financial activities may fall outside the scope of the official budget. These off-budget items could include emergency spending, special funds, grants, subsidies, or other financial transactions not explicitly accounted for in the regular budgeting process.

    When the MOF reviews off-budget items, they are scrutinising these financial activities to assess their impact, legality, appropriateness, or potential risks. This review aims to ensure transparency, fiscal responsibility, and effective financial management within the government. It helps identify discrepancies, assess the necessity and effectiveness of off-budget items, and make informed decisions regarding their continuation or modification.

    Current Position

    The government proposed in Budget 2020 that qualifying intellectual property (IP)-generated income derived from the development of patents and copyright software be given a 100% income tax exemption for up to 10 years.

    In response to the proposal presented above, the Malaysian Investment Development Authority (MIDA) has published, with an effective date of January 1, 2020, the Guidelines on Incentives for Intellectual Property (IP) Development.

    For tax exemption computation, the income that qualifies for the exemption will be calculated based on the Modified Nexus Approach (MNA).

    Eligible applicants

    New/existing companies own the rights of the qualifying IPs and are receiving income from the qualifying IP activities related to the promoted activities/list prescribed under the Promotion of Investments Act 1986 (PIA) and the Income Tax Act 1967 (ITA).

    Qualifying IP asset types

    • Patent or utility innovation
    • Copyrighted software
    • Family of qualifying IPs

    Qualifying IP income types

    • Royalty
    • Licensing Fees

    Eligibility criteria

    • R&D activities must be conducted in Malaysia, where such activities lead to the development, improvement, modification or creation of the Qualifying Asset.
    • Adequate operating expenditure incurred annually to support the company in conducting its business operation in Malaysia.
    • The company must have at least 30% of science and technical staff have a degree or diploma with a minimum of five years of experience from related fields.

    Qualifying R&D expenditure

    • Eligible R&D expenditure for MNA calculation will align with the eligible expenditure types under s 34A of the ITA.
    • Includes expenditure under cost-sharing agreements, provided that the cost of payable R&D is clearly stated in the agreement.
    • Qualifying expenditure can be backdated up to three years from the date the IP is registered/filed.

    The incentive will apply to applications received by MIDA between 1 January 2020 and 31 December 2022. Three sets of the application are to be submitted to the following:

    • Chief Executive Officer
    • Malaysian Investment Development Authority (MIDA)
    • MIDA Sentral
    • No. 5, Jalan Stesen Sentral 5
    • Kuala Lumpur Sentral
    • 50470 Kuala Lumpur

    (Attention: Advanced Technology and Research & Development Division (ATRD) Division)

    Proposal [This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023]

    To further encourage R&D activities and IP registration in Malaysia, the proposed tax incentive will be extended for 3 years.

    Effective Date

    For applications received by MIDA from 1 January 2023 until 31 December 2025.

    Our website's articles, templates, and material are solely for reference. Although we make every effort to keep the information up to date and accurate, we make no representations or warranties of any kind, either express or implied, regarding the website or the information, articles, templates, or related graphics that are contained on the website in terms of its completeness, accuracy, reliability, suitability, or availability. Therefore, any reliance on such information is strictly at your own risk.

    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

    1. Website ✍️ https://www.ccs-co.com/ 2. Telegram ✍️ http://bit.ly/YourAuditor 3. Facebook ✍

    4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy

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

    16
  • Extension of Tax Incentive for Pharmaceutical Companies

    Extension of Tax Incentive for Pharmaceutical Companies

    Update: The Ismail Sabri Government Budget is no longer applicable.

    Malaysia’s national budget for 2023 was re-tabled again in February 2023; for more info, please visit – https://www.ccs-co.com/post/budget-2023-malaysia-madani.

    This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023.

    MOF's response: Not applicable.

    Current Position

    To attract investment in Malaysia on the part of makers of pharmaceutical products, including vaccines, in particular, the COVID-19 vaccine, Manufacturer of pharmaceutical products is eligible for tax incentive as follows::

    • income tax rate of 0% up to 10%for the first 10 years; and
    • income tax rate of 10% for the subsequent 10 years.

    The tax incentives will be effective for applications received by the Malaysian Investment and Development Authority from November 7, 2020, to December 31, 2022.

    Proposal [This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023]

    To further encourage the development and manufacturing of pharmaceutical products, particularly vaccines, the proposed tax incentive is extended for 3 years.

    Effective Date

    For applications received by MIDA from January 1, 2023, until December 31. 2025.

    Our website's articles, templates, and material are solely for reference. Although we make every effort to keep the information up to date and accurate, we make no representations or warranties of any kind, either express or implied, regarding the website or the information, articles, templates, or related graphics that are contained on the website in terms of its completeness, accuracy, reliability, suitability, or availability. Therefore, any reliance on such information is strictly at your own risk.

    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

    1. Website ✍️ https://www.ccs-co.com/ 2. Telegram ✍️ http://bit.ly/YourAuditor 3. Facebook ✍

    4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy

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

    15
  • Extension of Tax Incentive for Medical Tourism

    Extension of Tax Incentive for Medical Tourism

    Update: The Ismail Sabri Government Budget is no longer applicable.

    Malaysia’s national budget for 2023 was re-tabled again in February 2023; for more info, please visit – https://www.ccs-co.com/post/budget-2023-malaysia-madani.

    This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023.

    Response from MOF (Ministry of Finance): Not extended/Discontinued

    Current Position

    If a private healthcare company makes a new investment or engages in expansion, modernisation, or refurbishment activities, it may be eligible for an income tax exemption equivalent to the Investment Tax Allowance of 100% of the qualifying capital expenditure for a period of 5 years.

    Additionally, this allowance may be set off against 100% of the company’s statutory income.

    The tax incentive is subject to the following conditions:

    1. at least 10% of the total number of patients receiving private healthcare services for each year of assessment are comprised of qualified healthcare travellers; and
    2. at least 10% of the company’s gross income for each year of assessment is derived from services to qualified healthcare travellers.

    The tax incentive is for applications received by the Malaysian Investment Development Authority (MIDA) from 1 January 2021 until 31 December 2022.

    Proposal [This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023]

    It is proposed that the tax incentive be extended for three years further to support the growth of quality private healthcare services and increase the arrival of healthcare travellers.

    Effective Date

    For applications received by MIDA from 1 January 2023 until 31 December 2025.

    Our website's articles, templates, and material are solely for reference. Although we make every effort to keep the information up to date and accurate, we make no representations or warranties of any kind, either express or implied, regarding the website or the information, articles, templates, or related graphics that are contained on the website in terms of its completeness, accuracy, reliability, suitability, or availability. Any reliance on such information is therefore strictly at your own risk.

    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

    1. Website ✍️ https://www.ccs-co.com/ 2. Telegram ✍️ http://bit.ly/YourAuditor 3. Facebook ✍

    4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy

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

    17
  • Review of Tax Incentive for Tour Operators

    Review of Tax Incentive for Tour Operators

    Update: The Ismail Sabri Government Budget is no longer applicable.

    Malaysia’s national budget for 2023 was re-tabled again in February 2023; for more info, please visit – https://www.ccs-co.com/post/budget-2023-malaysia-madani.

    This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023.

    Response from MOF (Ministry of Finance): Not extended/Discontinued

    Current Position

    As part of Budget 2018, tour operators have been provided with tax incentives, including the following: 

    1. a tax exemption of 100 percent on statutory income derived from the business of operating tour packages to Malaysia with the participation of at least 750 inbound tourists per year; and
    2. a tax exemption of 100 percent on statutory income derived from the business of operating tour packages within Malaysia with participation of at least 1,500 local tourists per year.

    During the COVID-19 pandemic, the tax incentive was reviewed as follows:

    1. extended for a period of 2 years from the year of assessment 2021 to the year assessment 2022; and
    2. tourism packages within Malaysia with participation of at least 200 local tourists per year and nil for inbound tourists for tourism packages to Malaysia

    Proposal [This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023]

    It is proposed that the following requirements of tax incentive programmes be revised to increase tourism activities in Malaysia during the transition phase to the endemic phase:

    1. tourism packages within Malaysia with the participation of at least 400 local tourists per year; or
    2. tourism packages to Malaysia with the participation of at least 200 inbound tourists per year; and
    3. tax incentive is extended for a year.

    Effective Date

    For the year of assessment 2023.

    Our website's articles, templates, and material are solely for reference. Although we make every effort to keep the information up to date and accurate, we make no representations or warranties of any kind, either express or implied, regarding the website or the information, articles, templates, or related graphics that are contained on the website in terms of its completeness, accuracy, reliability, suitability, or availability. Any reliance on such information is therefore strictly at your own risk.

    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

    1. Website ✍️ https://www.ccs-co.com/ 2. Telegram ✍️ http://bit.ly/YourAuditor 3. Facebook ✍

    4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy

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

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  • Extension of Tax Incentive for Export of Private Healthcare Services

    Extension of Tax Incentive for Export of Private Healthcare Services

    Update: The Ismail Sabri Government Budget is no longer applicable.

    Malaysia’s national budget for 2023 was re-tabled again in February 2023; for more info, please visit – https://www.ccs-co.com/post/budget-2023-malaysia-madani.

    This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023.

    Response from MOF (Ministry of Finance): Not extended/Discontinued

    Current Position

    Companies that provide private healthcare services are eligible for an income tax exemption equivalent to 100% of the increased value in services exports.

    Additionally, this exemption can be set off against 70% of the statutory income derived from the export of healthcare services to foreign healthcare travellers either from Malaysia or abroad, subject to the conditions that are outlined below:

    1. at least 10% of the total number of patients receiving private healthcare services for each year of assessment are comprised of qualified healthcare travellers; and
    2. at least 10% of company’s gross income for each year of assessment is derived from services to qualified healthcare travellers.

    The tax incentive is effective from the year of assessment 2021 until the year of assessment 2022.

    Proposal [This tax incentive included in Budget 2023, tabled in Parliament on 7 October 2022, was not included in Budget 2023 (Re-tabled) on 24 February 2023]

    To further encourage private healthcare services and position Malaysia as a health tourism hub, it is proposed that tax incentives be extended for 3 years.

    Effective Date

    For the year of assessment 2023 until the year of assessment 2025.

    Our website's articles, templates, and material are solely for reference. Although we make every effort to keep the information up to date and accurate, we make no representations or warranties of any kind, either express or implied, regarding the website or the information, articles, templates, or related graphics that are contained on the website in terms of its completeness, accuracy, reliability, suitability, or availability. Any reliance on such information is therefore strictly at your own risk.

    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

    1. Website ✍️ https://www.ccs-co.com/ 2. Telegram ✍️ http://bit.ly/YourAuditor 3. Facebook ✍

    4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy

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

    18
  • Tax Incentive for Investment in a Bionexus Status Company

    Tax Incentive for Investment in a Bionexus Status Company

    Principal Rules – Tax Incentive

    According to the Income Tax (Deduction for Investment in a BioNexus Status Company) Rules 2016 [P.U.(A) 306/2016]:

    • a qualifying person is permitted a deduction of an amount equivalent to the actual value of investment made by the qualifying person in a BioNexus Status Company
    • for the investment period between January 1, 2016, and December 31, 2020. 

    Amendment Rules

    On 22 June 2022, the Minister, in the exercise of the powers conferred by paragraph 154(1)(b) of the Income Tax Act 1967 [Act 53], gazetted the Income Tax (Deduction for Investment in a Bionexus Status Company) (Amendment) Rules 2022 [P.U (A) 212/2022].

    The Amendment Rules, deemed to have come into operation on January 1, 2021, have extended the eligibility period for the incentive to include qualifying investments made from January 1, 2021, all the way through December 31, 2022.

    108.1-Income-Tax-Deduction-for-Investment-in-a-BioNexus-Status-Company-Amendment-Rules-2022-P.UA-212Download
    108.2-Income-Tax-Deduction-for-Investment-in-a-BioNexus-Status-Company-Rules-2016-P.UA-306Download
    108.3-BioNexus-Status-3.0-Framework-GuidelineDownload

    A Friendly Reminder

    It is important to keep in mind that in order to be eligible for this tax incentive, the conditions that are outlined in the Principal Rules must be satisfied.

    Conditions for Deductions

    The investment made by the qualifying person in a BioNexus status company must be approved by the Minister of Finance.

    The application must be submitted on or after the 1st of January 2021 and not later than the 31st of December 2022 through the Malaysian Bioeconomy Corporation Sdn Bhd.

    Malaysia Bioeconomy Development Corporation Sdn. Bhd

    means a company incorporated under the Companies Act 2016/1965 whose function is for the purpose of developing the biotechnology industry in Malaysia.

    Qualifying Person means—

    1. a company incorporated under the Companies which is not related to another company which has been given a similar tax deduction for investment into a BioNexus status company [Rule 4(1)(b)]; or
    2. an individual who is a Malaysian citizen, resident and has a business income source, and who is not a family member/relative of a person who owns any of the paid-up capital of the BioNexus status company [Rule 4(1)(c)].

    BioNexus Status Company means—

    A company incorporated under the Companies Act which is engaged in a business of life sciences such as:

    • biology, medicine;
    • anthropology, ecology; or
    • any other branches of science

    which deal with living organisms and their organisation, life processes and relationships to each other and their environment.

    Qualifying Investment

    The investment must be for the purpose of financing activities at the initiation of commercialisation stage of a new business approved by the Minister.

    • “new business” means the first biotechnology business undertaken by a BioNexus status company;
    • initiation of commercialization stage” means the stage of research, assessment and development of an initial concept or prototype before the technology or product is commercialized but excludes the increase of production capacity, product development or product marketing.

    Investment is in the form of:

    • cash with no obligation to be repaid; or
    • holding of paid-up capital, i.e. investment which is paid in cash in respect of ordinary shares.

    Cessation of Tax Deduction

    The deduction allowed to a qualifying person under these Rules shall cease in the basis period for a year of assessment when the BioNexus status company begins the commercialization of the activities in respect of which the investment is made, which is based on the date of the first sales invoice.

    Disposal of Investment in the form of holding of Paid-up Capital in respect of Ordinary Shares

    Where an investment is in the form of holding paid-up capital, the ordinary shares shall not be disposed of within five years from the date of the last investment

    In the event that the ordinary shares are sold for a sale consideration within five years of the date of the investor’s latest investment, then the amount received by the investor shall be taxable to the investor upon receipt of the proceeds.

    • The taxable amount shall not exceed the total tax deduction claimed in relation to the investment.

    Non-application

    1. has made an investment in BioNexus status company which has been granted an exemption under the Income Tax (Exemption)(No. 18) Order 2007;
    2. has made a claim for reinvestment allowance under Schedule 7A to the Income Tax Act 1967(“ITA1967”) or investment allowance for the service sector under Schedule7B to the ITA1967;
    3. has been granted an incentive under the Promotion ofInvestmentsAct1986;
    4. has been granted an exemption under section 127 of the ITA1967;
    5. has made a claim for deduction under any rules made under section 154 of the ITA1967 except –
      1. the rules in relation to an allowance under Schedule3 to the ITA1967 (i.e. rules in relation to capital allowance, etc.);
      2. the Income Tax (Deduction for Audit Expenditure) Rules 2006;
      3. the Income Tax (Deduction for Cost relating to Training for Employees for the Implementation of Goods and Services Tax) Rules 2014; or
      4. the Income Tax (Deduction for Expenses in relation to Secretarial Fee and Tax Filing Fee) Rules 2014.
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