Income Tax (Deduction for Cost of Preparation of Corporate

In exercise of the powers conferred by paragraph 154(1)(b) of the Income Tax Act 1967 [Act 53], the Minister makes the following rules:

Citation and commencement

1. (1) These rules may be cited as the Income Tax (Deduction for Cost of Preparation of Corporate Knowledge-Based Master Plan) Rules 2009.

(2) These Rules are deemed to have come into operation from the year of assessment 2003 and subsequent years of assessment subject to rule 3.

Application

2. (1) These Rules apply to a company—

(a) incorporated under the Companies Act [Act 125] and is resident in Malaysia; and

(b) approved by the Minister to participate in a strategic knowledge-intensive activity—

(i) based on the corporate knowledge based master plan referred to in subrule 3(1); and

(ii) which the application for participation in the activity is made by the company to the Minister on or after 21 September 2002 but not later than 31 December 2011.

(2) The strategic knowledge-intensive activity referred to in paragraph (1)(b) shall be a promoted activity under the Promotion of Investment Act 1986 [Act 327] which is approved by the Minister charged with such responsibility under such Act.

Deduction

3. (1) In ascertaining the adjusted income of a company referred to in subrule 2(1) from its business for the basis period for a year of assessment in the basis period for a year of assessment, there shall be allowed as deduction the cost incurred by that company in the basis period for a year of assessment for the preparation of the corporate knowledge-based master plan which shall be the corporate strategic knowledge plan used for the business of a company verified by the Malaysian Industrial Development Authority established under the Malaysian Industrial Development Authority (Incorporation) Act 1965 [Act 397].

(2) For the purposes of subrule (1), the cost incurred shall be deemed to be incurred in the basis period for a year of assessment in which the corporate knowledge-based master plan is implemented.

(3) The corporate knowledge-based master plan referred to in these Rules shall be implemented within two years from the date of verification by the Malaysian Industrial Development Authority as required under subrule (1).

(4) Any cost incurred by the company in the preparation of subsequent corporate knowledge-based master plan shall only be allowed as a deduction after a period of three years from the end of the basis period for a year of assessment where the company is deemed to have incurred the cost under subrule (2).

Made 23 November 2009

[Perb. CR(8.09) 294/6/4-9(SJ.9)(2010); LHDN. 01/35/(S)/42/51/231-17.11;
PN(PU2)80/LVIII]

Dato’ Seri Haji Ahmad Husni bin Mohamad Hanadzlah
Second Minister of Finance

[To be laid before the Dewan Rakyat pursuant to subsection 154(2) Income
Tax Act 1967]