P.U.(A) |
Remarks (Please access the Order and Rules for the full details)
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240/2023
Income Tax (Exemption) Order 2023
(Gazetted on 15 August 2023)
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- This Order is deemed to have effect from the year of assessment (YA) 2021.
- A qualifying company (QC) is exempted from income tax in respect of statutory income derived from a qualifying activity (QA) equivalent to the amount of qualifying capital expenditure (QCE) made bt the QC.
2.1 An application for the exemption shall be made in writing by the QC and received by the Minister through MIDA on or after 1 July 2020 but not later than 31 Dec 2024, and comply with the conditions imposed by the Minister.
2.2 The exemption granted pursuant to the application is subjec to the QC complying with all the conditions imposed by the Minister as specified in the approval letter including:- · Incurs minimun amount of investment in fixed assets excluding land of more than RM300 million within 3 years from the date of the 1st QCE mde; and · Emplys at least 80% full-time Malaysian employees on or before the 3rd year form the date of the 1st invoice in relation to the QA issued by the QC untill the exemption period ends.
2.3 The exemption shall be for 5 consecutive years commencing from the date of the first QCE made by the QC as determined by MIDA. The date of the first QCE made by the QC shall not be earlier than 1 Jul 2020.
2.4 Where the QC has been granted the exemption, any related company is not entitled to be granted the exemption in respect of the same QA. Related company has the same meaning assigned to it in S.2(1) of the Promotion of lnvestments Act 1986.
- "QA" means a new manufacturing activity undertaken by a QC but doesn't include any activity specified in the Schedule to this Order.
- “QC” means an existing company that qualifies for the exemption in item 2 above."Existing company" means a company that: -
· ls incorporated under the Companies Act 2016 and resident in Malaysia; · Has an existing manufacturing operation in Malaysia (MY); and · Relocates its manufacturing operations to MY for a new business where the product for the new business is not an expansion project for the existing product.
- Other provisions in this Order are as follows:-
· QCE - Para 4; · Statutory income - Para 5; · Disposal of factory, machinery or plant within 5 years - Pare 6; · Determination of QCE for factory, machinery or plant disposed to related company - Para 7; · Withdrawal of exemption - Para 8 and Surrender of exemption - Para 9; · Separate source and separate account - Para 10; and · Non-pplication - Para 11.
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241/2023
Income Tax (Relocation of Manufacturing Business Incentive Scheme) Rules 2023
(Gazetted on 15 August 2023)
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- These Rules are deemed to have effect from YA 2021 and apply to a QC that applies in writing to the Minister for the Relocation of Manufacturing Business Incentive Scheme (RMBIS).
- The income tax rate for the specified YAs on the chargeable income of a QC which carries on business in respect of a QA under the RMBIS is 0%.
2.1 The specified YAs is a period commencing from the YA determined by Minister, in relation to investment in fixed assets excluding land of :- · RM300 million to RM500 million, for 10 YAs; or · More than RM500 million, for 15YAs.
2.2 An application for RMIBS by a QC shall be received by the Minister through MIDA on or after 1 Jul 2020 but not later than 31 Dec 2024. The QC shall comply with the conditions imposed by the Minister as pecified in the approval letter including :- · Incurs minimum amount f invesrtment in fixed assets excluding land within 3 years from the date of the 1st QCE incurred amounting to :- - RM300 million for approval of 10 YAs; or - More than RM500 million for approval of 15YAs; and · Employs at least 80 full-time Malaysian employees on or before the 3rd year from the date of the 1st invoice in relation to the QA issued by the QC until the end of the specified YAs.
- “QA” means a manufacturing activity undertaken by the QC but doesn't include any activity specified in the Schedule to these Rules.
- RMBIS is an incentive scheme for the QC which carries on QA and is
approved by the Minister.
- A QC is a new company that fulfils the eligibility conditions in item 2.2 above and the conditions provided under S.65B of the lncome Tax Act (ITA) 1967.“New company” means a company that: -
· ls incorporated under the Companies Act 2016 and resident in Malaysia; · Does not have an existing manufacturing operation in MY; and · Relocates manufacturing activity for a QA into MY or establishes anew operation to carry on a QA in MY.
- Other provisions in these Rules are as follows: -
· Surrender of RMBIS - Rule 9; and · Non-application - Rule 10.
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242/2023
Income Tax (For an Individual Resident Who is Not A Citizen and Holds C Suide Position in an Approved Company) Rules 2023
(Gazetted on 15 August 2023)
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- These Rules are deemed to have effect from YA 2021.
- The income tax rate for the specified YAs on chargeable income of a qualifying individual (QI) having and exercising employment in an approved company (AC) is 15%.
2.1 The chargeable income of a QI referred to in item 2 above shall be determined in accordance with the formula in Rule 6(2), and any excess of chargeable income of that Ql that is subject to tax shall be charged to income tax at the applicable rate under Part of Schedule 1 to the ITA 1967.
2.2 Specified YAs is a period of 5 consecutive YAs commencing from the YA determined by the Minister in the approval letter referred to in item 2.4 below.
2.3 A QI may apply for an incentive under these Rules subject to: - · The application shall be made in writing by an AC and received by the Minister through MIDA: - - On or after 7 Nov 2020 but not later than 31 Dec 2024, in relation to an AC that has been granted tax exemption under PU(A) 240/2023 or an incentive scheme under PU(A) 241/2023; and - On or after 7 Nov 2020 but not later than 31 Dec 2022, in relation to an AC that has been granted an incentive scheme under PU(A)398/2022. · The QI has never been granted an incentive under these Rules.
A QI is an individual resident who is not a citizen employed by an AC and holding the C Suite position during the specified YAs. The number of Ql for every AC is limited to 5 only.
2.4 A Ql whose application in item 2.3 above is approved shall fulfil the conditions imposed by the Minister as specified in the approval letter including:- · Resident in Malaysia for each YA in the specified YAs; · Receives income from employment with an AC in the specified YAs; · Holds a C Suite position in the AC in the specified YAs; and · Receives a minimum basic salary of RM25000 per month.
2.5 “C Suite position” means the position of top senior executives which relies on functional know-how and technical skills such as Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Chief Information Officer.
- Other provisions in these Rules are as follows:-
· Withdrawal of incentive - Rule 8; and · Cessation of application - Rule 9
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References:
1. Income Tax (Exemption) Order 2023 [PU(A) 240/2023].
2. Income Tax (Relocation of Manufacturing Business Incentive Scheme) Rules 2023 [PU(A)241/2023].
3. Income Tax (For an Individual Resident Who is Not A Citizen and Holds C Suite Position in an Approved Company) Rules 2023 [PU(A) 242/2023].