Income Tax (Exemption) (No. 6) Order 2009

Income Tax (Exemption) (No. 6) 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. 6) Order 2009.

(2) This Order shall have effect from the year of assessment 2010 until the year of assessment 2014.

Exemption

2. (1) The Minister exempts a person resident in Malaysia from the payment of income tax in respect of income derived from a healthcare services business given to a foreign client who is a company, a partnership, an organization or a cooperative society which is incorporated or registered outside Malaysia or non Malaysia citizen individual in the basis period for a year of assessment, in an amount and manner prescribed in paragraph 3.

(2) A non-Malaysian citizen individual referred to in subparagraph (1) shall not include the individual who is—

(a) a non-Malaysian citizen that participates in Malaysia My Second Home programme and his dependents;

(b) a non-Malaysian citizen holding a Malaysian student pass and his dependents;

(c) a non-Malaysian citizen holding a Malaysian work permit and his dependents; and

(d) a non-resident Malaysian citizen living abroad and his dependents.

Amount of income to be exempted

3. (1) The amount of income referred to in subparagraph 2(1) shall be equal to one hundred per cent of the value of increased services which is the difference of the value of the healthcare services provided in Malaysia in the basis period and the immediately preceding basis period (hereinafter referred to as “value of increased services”).

(2) Where an amount of income equivalent to one hundred per cent of the value of increased services has been determined for a year of assessment, so much of the statutory income of the business of that person for that year of assessment as is equal to that value of increased services (or to the aggregate amount of any such value of increased services as the case may be) but not exceeding seventy per cent of the statutory income, such amount of income shall be exempted from tax.

(3) The statutory income from the business referred to in subparagraph 2(1) in the basis period for a year of assessment 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.

(4) Where an asset used for the purpose of healthcare services business referred to in subparagraph 2(1) is also used for the purpose of a business other than that business, 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 the first mentioned business.

(5) Nothing in subparagraph (1) shall absolve or is deemed to have absolved the person 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.

Insufficiency of income

4. Where, by reason of the restriction of seventy per cent, as prescribed in subparagraph 3(2), of the statutory income or of an insufficiency or absence of statutory income from a business of the person for the basis period for a year of assessment, exemption cannot be given or cannot be given in full to the amount of the determined value of increased services to which the person is entitled under paragraph 2(1) for that year of assessment, then so much of that amount or the aggregate amount as cannot be given for that year shall be given to the person for the first subsequent year of assessment for the basis period for which there is statutory income from that business, and for subsequent years of assessment until the person has received the whole of the amount or the aggregate amount to which the person is so entitled.

Separate account

5. A person who is exempted under paragraph 2(1) shall maintain a separate account for the income derived from the healthcare services business referred to in that paragraph.

Application of paragraphs 5 and 6 of Schedule 7A

6. Paragraphs 5 and 6 of Schedule 7A to the Act shall apply mutatis mutandis to the amount of income exempted under paragraph 2(1).

Non-application

7. This Order shall not apply to a person who in the basis period for a year of assessment—

(a) has been granted any incentives (except for deductions for promotion of exports) under the Promotion of Investments Act 1986 [Act 327];

(b) has been granted investment allowance in respect of an approved service project under Schedule 7b of the Act;

(c) has been granted an exemption under paragraph 127(3)(b) of the Act or subsection 127(3A) of the Act; or

(d) has been granted an exemption under the Income Tax (Exemption) (No. 9) 2002 [P.U. (A) 57/2002].

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) of the
Income Tax Act 1967]