Income Tax (Exemption) (No. 5) Order 2009

Income Tax (Exemption) (No. 5) 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. 5) Order 2009.

(2) This Order is deemed to have come into operation on 24 October 2009 and shall effect subject to paragraph 3.

Application

2. This Order shall apply to a company resident in Malaysia which is—

(a) an insurer licensed under the Insurance Act 1996 [Act 553]; and

(b) a takaful operator registered under the Takaful Act 1984 [Act 312].

Exemption

3. (1) The Minister exempts for five consecutive years of assessment (hereinafter referred to as “exempt period”) the company referred to in paragraph 2 from the payment of income tax in respect of statutory income in relation to sources of income derived from a branch of the company or a company where at least twenty per cent of the issued share capital of such company is directly owned by the company referred to in paragraph (2) (hereinafter referred to as “investee company”)—

(a) which carries or will carry on insurance or takaful business, or any part of such insurance or takaful business; and

(b) which is located outside Malaysia.

(2) To qualify for an exemption under this Order—

(a) an application for such exemption shall be made by the company to the Minister;

(b) the application for approval to carry out insurance or takaful business, or any part of such insurance or takaful business by the branch of the company or investee company is received by the Central Bank of Malaysia on or after 24 October 2009 but not later than 31 December 2015; and

(c) the branch of the company or investee company shall commence insurance or takaful business, or any part such insurance or takaful business within two years from the date of approval issued by the Central Bank of Malaysia.

(3) Commencement of the exempt period referred to in subparagraph (1) shall be determined by the company but later than the third year of assessment the branch of the company or investee company commences insurance or takaful business, or any part such insurance or takaful business.

(4) Nothing in subparagraph (1) shall absolve or be deemed to have absolved the company from complying with any requirement to submit any return or statement of accounts or to furnish any other information under the provisions of the Act.

Application of paragraphs 5 and 6 Schedule 7A

4. Paragraphs 5 and 6 of Schedule 7A to the Act shall apply, mutatis mutandis, to the amount of income exempted under subparagraph 3(1).

Separate account

5. The company exempted under subparagraph 3(1) shall maintain a separate account for the income exempted under such subparagraph.

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 127(4) of the
Income Tax Act 1967]