Income Tax (Exemption) (No. 8) Order 2009

Income Tax (Exemption) (No. 8) 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. 8) Order 2009.

(2) This Order shall have effect from the year of assessment 2009 and subsequent years of assessment subject to paragraph 3 and subsubparagraph 5(3)(b).

Interpretation

2. In this Order—

“Board of Architects Malaysia” means a board which is established under section 3 of the Architects Act 1967 [Act 117];

“person” means a person resident in Malaysia and with respect to a company, refers to a company incorporated under the Companies Act 1965 [Act 125];

“qualifying expenditure” means an additional expenditure incurred in relation to construction of a building, alteration, renovation, extension or improvement of an existing building.

Application

3. This Order shall apply to a person who has obtained a green building index certificate issued by the Board of Architects Malaysia from 24 October 2009 until 31 December 2014.

Non-application

4. This Order shall not apply to a person who has been granted with investment tax allowance or pioneer status under the Promotion of Investments Act 1986 [Act 327] in respect of qualifying expenditure incurred on activity for generation of renewable energy or for conservation of energy.

Exemption

5. (1) The Minister exempts a person in the basis period for a year of assessment from the payment of income tax in respect of the statutory income which is equal to the amount of qualifying expenditure incurred by that person for the purpose of obtaining a green building index certificate issued by the Board of Architects Malaysia.

(2) The qualifying expenditure incurred by the person referred to in subparagraph (1), prior to the issuance of a green building index certificate—

(a) shall be deemed to have been incurred on the day the green building index certificate is issued; and

(b) may be claimed in the basis period for a year of assessment when the person commences to carry on with his business at the building which is issued with that green building index certificate.

(3) Where by reason of an absence or insufficiency of statutory income of a person from his business for the basis period for a year of assessment—

(a) an exemption shall not be given or shall not be given in full to the amount to which the person is entitled under subparagraph (1) for that year of assessment; and

(b) the amount, which shall not be given exemption or shall not be given exemption in full as referred to in subsubparagraph (a) for that year of assessment, shall be exempted 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 whole of the amount to which the person is so entitled is exempted.

(4) Nothing in subparagraph (1) shall absolve or be 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.

Qualifying expenditure under a hire-purchase agreement

6. (1) Where the person referred to in subparagraph 5(1) becomes a party of a hire-purchase agreement to purchase an asset for the purpose of his business which is being conducted at a building which is issued to it with the green building index certificate and incurs a qualifying expenditure, the person shall be entitled for an exemption in accordance with subparagraph 5(1).

(2) The amount of an exemption to be given in respect of the qualifying expenditure incurred by the person for the basis period for a year of assessment shall be—

(a) the capital portion of any instalment payment made by the person under a hire-purchase agreement; or

(b) where there is more than one payment, the aggregate of those payments, made by the person under a hire-purchase agreement.

(3) For the purpose of this Order, the person shall be deemed to be the owner of the asset purchased under a hire-purchase agreement.

Capital allowance and industrial building allowance

7. For the purpose of this Order, a person who incurs a qualifying expenditure referred to in subparagraph 5(1) shall only be entitled to make a claim for a capital allowance and industrial building allowance under Schedule 3 of the Act if the qualifying expenditure is a qualifying capital expenditure under that Schedule.

Certification by the Board of Architects Malaysia

8. The Board of Architects Malaysia may certify any other expenditure incurred, for the purpose referred to in subparagraph 5(1), to be the qualifying expenditure.

Application of paragraphs 5 and 6 of Schedule 7A

9. Paragraphs 5 and 6 of Schedule 7A of the Act shall apply, mutatis mutandis, to the amount of statutory income exempted from income tax which is derived from the activity referred to in subparagraph 5(1).

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]