Income Tax (Exemption) (No. 2) Order 2009

Income Tax (Exemption) (No. 2) Order 2009

In exercise of the powers conferred by paragraph 127(3)(b) of the Income Tax Act 1967 [Act 53], the Minister makes the following order:

Citation and commencement

1. (1) This order may be cited as the Income Tax (Exemption) (No. 2) Order 2009.

(2) This Order is deemed to have come into operation on 2 September 2006.

Interpretation

2. In this Order, unless the context otherwise requires—

“approved business” means the new business and expansion project as defined in the Income Tax (Exemption) (No. 17) Order 2007 [P.U. (A) 371/2007] and the Income Tax (Exemption) (No. 18) Order 2007 [P.U. (A) 372/2007];

“approved company” means a Bio Nexus status company that has been given an exemption from the payment of income tax under the Income Tax (Exemption) (No. 17) Order 2007 [P.U. (A) 371/2007] or Income Tax (Exemption) (No. 18) Order 2007 [P.U. (A) 372/2007], as the case may be;

“the exemption year of assessment” means the year of assessment where an approved company has been given exemption from the payment of income tax under the Income Tax (Exemption) (No. 17) Order 2007 or the Income Tax (Exemption) (No. 18) Order 2007, as the case may be.

Exemption

3. (1) The Minister exempts an approved company in the basis period for a year of assessment from the payment of income tax in respect of statutory income derived from an approved business for a period of ten consecutive years of assessment commencing after the exempt year of assessment, relating to the approved company.

(2) Subject to paragraph 4, the statutory income referred to in subparagraph (1) shall be determined in accordance with the following formula:


A x C
B

Where A is the amount of tax charged on the chargeable incomeof the approved company in respect of its approved business at the prevailing tax rate reduced by the amount of tax charged on such chargeable income at the rate of twenty per cent;

B is the amount of tax charged on such chargeable income at the prevailing tax rate; and

C is the amount of such chargeable income.

(3) Nothing in subparagraph (1) shall absolve or is deemed to have absolvedthe approved company from complying with any requirement to submit any return or statement of accounts or to furnish any other information under the provision of the Act.

Statutory income

4. (1) The statutory income referred to in subparagraph 3(1) shall be determined after deducting allowances which fall to be made under Schedule 3 of the Act notwithstanding that no claim for such allowances has been made.

(2) Where an asset used for the purpose of the approved business is also used for the purpose of a business other than that approved business, then the allowances which fall to be made under Schedule 3 of the Act shall be deducted as is reasonable having regard to the extent to which the asset is used for the purpose of that approved business.

Chargeable income

5. (1) The chargeable income in relation to the source consisting of an approved business for a year of assessment shall be the statutory income from that source reduced by any deduction falling to be made pursuant to subsection 43(2) of the Act relating to that source.

(2) The chargeable income in relation to the source or sources other than the source consisting of an approved business for a year of assessment shall be the statutory income from that source or the aggregate of the statutory income from each of those sources, as the case may be, reduced by any deduction falling to be made pursuant to subsections 43(2) and 44(1) of the Act.

(3) For the purposes of subparagraph (2), in making the deductions under subsections 43(2) and 44(1) of the Act, no regard shall be made to the adjusted loss, if any, from the source consisting of the approved business.

Separate source and account

6. (1) Where an approved company carries on an approved business, the income derived from that approved business shall be treated as a separate and distinct business source of the approved company.

(2) The approved company which is exempted under subparagraph 3(1) shall maintain a separate account for the income derived from the approved business.


Made 9 April 2009

[Perb. 0.3865/366 Vol. 3 (SK. 5); LHDN 01/35/(S)/42/51/82-64; PN(PU2)80/LVI]

Tan Sri Nor Md bin Yakcop
Second Minister of Finance

[To be laid before the Dewan Rakyat pursuant to subsection 127(4) of the Income Tax Act 1967]