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TaXavvy Issue 10/2019

In this special issue:

  • Allowance for increased exports - new gazette orders
    Three gazette orders have been issued in relation to the Allowance for Increased Exports (AIE) incentive for export of manufactured products and agriculture produce. Two of the gazette orders:
    • revoke the earlier gazette orders, and 
    • update the AIE incentive by imposing new qualifying conditions.

The third gazette order covers the new AIE incentive for Small and Medium Enterprises (SMEs) as announced in Budget 2016.

  • Integrated Logistics Services incentive (second round) - new guideline
    The Malaysian Investment Development Authority has issued a new Guideline for second round of the Integrated Logistics Services incentive. Under this second round incentive, an existing approved logistics company may enjoy either of the following:
    • Income tax exemption of 70% of statutory income for a period of 5 years, or
    • Income tax exemption of 60% of qualifying capital expenditure incurred within 5 years to be set off against 70% of statutory income.
       
  • Labuan Investment Committee - Pronouncement 1-2019
    The Labuan Investment Committee, comprising Ministry of Finance, Labuan Financial Services Authority and Inland Revenue Board, has been established to recommend policies and monitor enforcement on the substantial activity requirements for Labuan IBFC. The Committee has issued its first Pronouncement 1-2019 dated 19 June 2019 to clarify the following:
  1. Non-application of restriction of the deduction for payments made to Labuan entities
  2. Compliance with substantial activity requirements
  3. Meaning of full-time employees
  • Further deduction for employment of ex-convict, senior citizens etc.
    Following the Budget 2019 proposal, the Income Tax (Deduction for Employment of Senior Citizen, Ex-Convict, Parolee, Supervised Person and Ex-Drug Dependant) Rules 2019 (“the Rules”) has been gazetted. The Rules is effective for years of assessment 2019 and 2020 and provides employers a further deduction for the remuneration paid to an employee who is a citizen and resident in Malaysia.

  • Approved social enterprise - application guideline
    Budget 2019 announced that income tax deduction will be provided for contributions to a social enterprise to support the government’s efforts in uplifting underprivileged and marginalised communities.

    The Ministry of Finance has now issued a Guideline on the Application of Social Enterprise to be approved under section 44(11C) of the Income Tax Act 1967 which explains the procedures and conditions for approval for a social enterprise.

  • Other updates
    • Guideline on tax treatment related to the implementation of MFRS 121
    • Guideline for approval of Director General of Inland Revenue under Subsection 44(6) of the Income Tax Act 1967 - revised
    • National Home Ownership Campaign 2019 - extension of stamp duty exemptions

TaXavvy is a newsletter issued by PricewaterhouseCoopers Taxation Services Sdn Bhd. While every care has been taken in compiling this newsletter, we make no representations or warranty (expressed or implied) about the accuracy, suitability, reliability or completeness of the information for any purpose. PricewaterhouseCoopers Taxation Services Sdn Bhd, its employees and agents accept no liability, and disclaim all responsibility, for the consequences of anyone acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. Recipients should not act upon it without seeking specific professional advice tailored to your circumstances, requirements or needs.

 

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