B17 INCENTIVES IN PROMOTED AREAS

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1 B17 INCENTIVES IN PROMOTED AREAS INCENTIVES IN PROMOTED AREAS Type of Incentive Sector Promoted Area Legislation 1(a) 1(b) Pioneer Status Tax exemption on 85% of statutory income for five years (as compared to exemption of 70% for projects located in areas outside the promoted areas). This 2005 (2001 The exemption will be increased from 85% to 100% for applications received by MIDA from 13 Sep 2003 to 31 Dec 2005 (2004 The application period has been extended for 31 Dec 2010 (2006 2nd Round of exemption for existing companies which relocate their manufacturing activities to the promoted areas (2005 Or Investment Tax Allowance (ITA) 85% of statutory of assessment from Agriculture (including rearing of chicken and duck w.e.f. 20 Oct 2001), Hotel and Tourism, and Manufacturing Related Services w.e.f. 20 Oct 2001 Agriculture, Hotel and Tourism, and Manufacturing Related Services w.e.f. 20 Dec 2001 Pahang District of Mersing in the State of Johor Pahang PU(A) 482/1994 and 80/1998 S. 21D of PIA PU(A) 482/

2 ITA computed at 80% (as compared to tax exemption on 70% of statutory income from ITA computed at 60% for projects located outside the promoted areas) within five years from the date which the approval is to take effect. This incentive has been extended for 31 Dec 2005 (2001 The rate of ITA will be increased from 80% to 100% of capital expenditure incurred and will be allowed to be set off against 100% of statutory income for applications received by MIDA from 13 Sep 2003 to 31 Dec 2005 (2004 The application period has been extended for 31 Dec 2010 (2006 (Prior to 1 Nov 1991, the ITA rate varied in accordance with the criteria met and the location of the promoted activities). 2nd Round ITA for existing companies which relocate their manufacturing activities to the promoted areas (2005 And District of Mersing in the State of Johor and 80/1998 S. 29C of PIA (Amended) Order

3 1(c) Infrastructure Allowance (IA) of assessment on IA computed at 100% on capital expenditure incurred within five years for the provision of infrastructure. This 2005 (2001 The application period for IA has been 2010 ( Reinvestment Allowance (RA) of assessment from RA computed at 60% within five years. As per 2002 Budget, this extended for a 15-year period. Agriculture, Hotel and Tourism Agriculture, Industrial Adjustment Programme Pahang District of Mersing in the State of Johor Pahang District of Mersing in the State of Johor (w.e.f. Y/A 2003) PU(A) 482/94 and 80/98 S. 41B of PIA ITA 1967 (Act 53) Sch 7A 216

4 3(a) 3(b) Exemption of Statutory Income for Approved Service Tax exemption on 85% of statutory income for 5 years. Or Investment Allowance (IA) for 85% of statutory of assessment from IA computed at 80% on qualifying capital within five years from the date which the approval is to take effect. transportation communications utilities any other subsector as approved by Minister of Finance transportation communications utilities any other subsector as approved by Minister of Finance Guidelines on Guidelines on Approved Services [Sch 7B of ITA 1967 (Act 53) only provides for normal rate of 70% of statutory income] 4. Income tax exemption for Iskandar Development Region (IDR) status company Tax exemption on income from qualifying activities for 10 years provided the operations commence on or before the end of Income tax exemption for a developer undertaking development activities in IDR developer on statutory income from disposal Creative industries and related services Education services Financial advisory and consulting services Healthcare and related services Logistics services Tourism Selected areas in Johor Income Tax (Exemption) (No. 19) Order 2007 PU(A) 417 Income Tax (Exemption) (No. 20) Order 2007 PU(A)

5 of any right in or over any land in an approved node commencing from the first year of assessment until Y/A developer on statutory income from rental or disposal of building located in an approved node commencing from the first year of assessment until Y/A development manager on statutory income from the provision of management, supervisory or marketing services until Y/A

B18 TAX INCENTIVES 18.1 EXECUTIVE SUMMARY. Pioneer Status (PS)

B18 TAX INCENTIVES 18.1 EXECUTIVE SUMMARY Malaysia offers a wide range of tax incentives for the promotion of investments in selected industry sectors, which include the traditional manufacturing and agricultural