INCOME TAX (EXEMPTION) (NO. 11) 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. 11) Order 2009.

(2) This Order is deemed to have come into operation from 21 May 2003 and shall have effect subject to its application as prescribed in paragraph 3.

Interpretation

2. In this Order, “forest plantation project” means the project referred to in subparagraph 3(2).

Qualification for exemption

3. (1) A company incorporated under the Companies Act 1965 [Act 125] and is resident in Malaysia that undertakes a forest plantation project shall qualify for an exemption under this Order where it surrenders its adjusted loss, in full or in part, in the basis period for a year of assessment in respect of a forest plantation project to one or more of its related companies incorporated under the Companies Act 1965 and is resident in Malaysia (referred to in this Order as a “claimant company”), in the basis period for that year of assessment.

(2) In relation to a forest plantation project referred to in subparagraph (1)—

(a) the project shall be the first forest plantation project undertaken by a company for the species as specified in the Schedule; and

(b) the application to undertake the forest plantation project referred to in subparagraph (1) shall be made to the Minister through the Minister charged with the responsibility for that project on or after 21 May 2003 but not later than 31 December 2011.

(3) For the purpose of this Order, a company is related to a claimant company if at the end of the basis period for a year of assessment at least—

(a) seventy per cent of the issued share capital of the company are directly owned by the claimant company;

(b) seventy per cent of the issued share capital of the claimant company are directly owned by the company; or

(c) seventy per cent of the issued share capital of the company and claimant company are directly owned by another company.

Exemption

4. (1) Subject to subparagraph (2), the Minister exempts a company from the payment of income tax in relation to a forest plantation project for a period of ten consecutive years of assessment (referred to in this Order as the “exempt years of assessment”) in respect of its statutory income, commencing from the first year of assessment in which the company derived statutory income from that project.

(2) The statutory income of the forest plantation project referred to in subparagraph (1) in the basis period for each of the exempt years 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.

(3) Where an asset used for the purpose of the forest plantation project referred to in subparagraph (1) is also used for the purpose of a project or business other than that project, 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 forest plantation project.

(4) Nothing in subparagraph (1) shall absolve or is 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 provision of the Act.

Losses

5. (1) The amount of adjusted loss surrendered shall be allowed as a deduction against the aggregate income of the claimant company pursuant to subsection 44(1) of the Act.

(2) Subject to subparagraph (3), the amount of adjusted loss surrendered by a company in respect of a forest plantation project for any year of assessment shall be adjusted loss from the year of assessment in the basis period in which the forest plantation project commenced to the year of assessment immediately prior to the exempt years of assessment.

(3) Any amount of adjusted loss in any year of assessment from a forest plantation project that is not surrendered to any claimant company in that year of assessment shall not be available to any claimant company for any subsequent year of assessment.

(4) Where the basis period of a company does not coincide with the basis period of a claimant company, an adjusted loss from a forest plantation project shall be deemed to have accrued evenly over the basis period of the company and the amount of adjusted loss surrendered shall exceed such amount that is apportioned to the period that coincide with the basis period of the claimant.

(5) Any claim for a deduction by a claimant under this Order shall be made in a written statement and shall be accompanied by a notice of consent given by a company containing such particulars as to show the amount of adjusted loss being surrendered.

(6) Where it appears to the Director General that any deduction given to a claimant company ought not to have been so given, the Director General may raise such assessment or additional assessment upon that claimant company as may be necessary in order to make good any loss of tax.

(7) Any amount of adjusted loss in respect of a forest plantation project that is not surrendered prior to and during the exempt year or years of assessment shall be carried forward and deducted against the statutory income of the forest plantation project in the post-exempt year or years of assessment until that forest plantation project has utilized the whole amount of the adjusted loss to which it is so entitled.

(8) The amount of the adjusted loss in respect of a forest plantation project that was utilized to reduce the statutory income of that forest plantation project in the post-exempt year or years of assessment shall be disregarded for the purposes of subsections 43(2) and 44(2) of the Act.

Capital allowance

6. For the purpose of this Order, Schedule 3 of the Act shall apply.

Withdrawal of tax exemption

7. The Minister may withdraw the exemption on the statutory income of the project referred to in subparagraph 4(1) if a company fails to comply with the conditions as approved by the Minister.

Separate account

8. A company which is exempted under subparagraph 4(1) shall maintain a separate account for the income derived from the project referred to in that subparagraph.

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 the project referred to in subparagraph 4(1).

Non-application

10. This Order shall not apply to—

(a) a forest plantation project that commences after one year from the date of approval or after such extended period approved by the Minister;

(b) a company in the basis period for a year of assessment which—

(i) has been granted any incentive under the Promotion of Investments Act 1986 [Act 327];

(ii) has made a claim for reinvestment allowance under Schedule 7A of the Act;

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

(iv) has qualified for a deduction under any rules made under section 154 of the Act including any rules that provides higher fraction for an asset for the purpose of qualifying plant expenditure under Schedule 3 of the Act.


SCHEDULE

Item Specie Local Name

1. Acacia mangium, Acacia auriculiformis, Acacia Acacia
hybrids

2. Agathis borneensis Damar minyak (Peninsular)/ Bindang (Sarawak)/ Mengilan (Sabah)

3. Alstonia angustifolia, Alstonia angustiloba, Alstonia Pulai (Peninsular)/Pelai (Sarawak)
macrophylla, Alstonia pneumatophora, Alstonia
scholaris, Alstonia spatulata

4. Anisoptera costata, Anisoptera curtisii, Anisoptera Mersawa/Pengiran (Sabah)
grossivenia, Anisoptera laevis, Anisoptera marginata,
Anisoptera megistocarpa, Anisoptera scaphula

5. Araucaria cunninghamii Hoop pine
Araucarai hunstenii Klinki pine

6. Artocarpus altilis, Artocarpus elasticus, Artocarpus Cempedak/Terap
lowii, Artocarpus odoratissima, Artocarpus
scortechinii, Artocarpus tamaran, Artocarpus
teysmannii

7. Azadirachta excelsa Sentang (Peninsular)/Ranggu (Sabah, Sarawak)

8. Bischofi a javanica Javan cedar/Jitang/Tuai

9. Calamus manan Rotan manau
Calamus caesius Rotan sega

10. Calophyllum bifl orum, Calophyllum calaba, Bintangor
Calophyllum canum, Calophyllum coriaceum,
Calophyllum depressinervosum, Calophyllum
ferrugineum, Calophyllum inophyllum, Calophyllum
macrocarpum, Calophyllum pulcherrimum,
Calophyllum sclerophyllum, Calophyllum
symingtonianum, Calophyllum tetrapterum,
Calophyllum teysmannii, Calophyllum wallichianum

11. Campnosperma auriculatum, Campnosperma Terentang
coriaceum, Campnosperma squamatum

12. Cananga odorata Kenanga

13. Canarium apertum, Canarium littorale, Canarium Kedondong (Peninsular)/ Seladah (Sarawak)
pseudosumatranum

14. Casuarina cunninghamiana, Casuarina equisetifolia, Rhu/Jemara/Chemara
Casuarina glauca, Casuarina junghuhniana

15. Ceiba pentandra, Bombax ceiba, Bombax valetonii Kapok (Sabah)/Kekabu

16. Chukrasia tabularis Surian batu

17. Cinnamomum altissimum, Cinnamomum iners, Pokok Teja/Medang teja/ Medang
Cinnamomum sintoc, Cinnamomum javanicum,
Cinnamomum porrectum, Cinnamomum scortechinii

18. Coelostegia borneensis, Coelostegia griffi thii Punggai (Peninsular)/Durian hantu (Sarawak)

19. Cratoxylum arborescens, Cratoxylum glaucum Geronggang

20. Dacrydium beccarii, Dacrydium comosum, Dacrydium Sempilor/Ekor (Peninsular)
elatum, Dacrydium gibbsiae

21. Dactylocladus stenostachys Jongkong

22. Dillenia borneensis, Dillenia excelsa, Dillenia Simpoh (Peninsular)/Buan (Sarawak)
grandifolia, Dillenia pulchella, Dillenia reticulata


23. Dipterocarpus acutangulus, Dipterocarpus Keruing
applanatus, Dipterocarpus elongates, Dipterocarpus
baudii, Dipterocarpus caudiferus, Dipterocarpus
chartaceus, Dipterocarpus concavus, Dipterocarpus
cornutus, Dipterocarpus confertus, Dipterocarpus
conformis, Dipterocarpus costatus, Dipterocarpus
costulatus, Dipterocarpus crinitus, Dipterocarpus
dyeri, Dipterocarpus elongatus, Dipterocarpus
eurynchus, Dipterocarpus fagineus, Dipterocarpus
geniculatus, Dipterocarpus gracilis, Dipterocarpus
grandifl orus, Dipterocarpus hasseltii, Dipterocarpus
humeratus, Dipterocarpus kerrii, Dipterocarpus
kunstleri, Dipterocarpus lamellatus, Dipterocarpus
lowii, Dipterocarpus obtusifolius, Dipterocarpus
oblongifolius, Dipterocarpus ochraceus, Dipterocarpus
pachyphyllus, Dipterocarpus palembanicus,
Dipterocarpus pseudofagineus, Dipterocarpus
rigidus, Dipterocarpus rotundifolius, Dipterocarpus
sarawakensis, Dipterocarpus semivestitus,
Dipterocarpus sublamellatus, Dipterocarpus stellatus,
Dipterocarpus validus, Dipterocarpus verrucosus

24. Dryobalanops aromatica, Dryobalanops beccarii, Kapur
Dryobalanops fusca, Dryobalanops keithii,
Dryobalanops lanceolata, Dryobalanops oblongifolia,
Dryobalanops rappa

25. Duabanga moluccana, Duabanga grandiflora Magasawih/Sawih (Sarawak) Magas (Sabah)/Berembang bukit (Peninsular)/Tagahas (Sabah)

26. Durio carinatus, Durio grandifl orus, Durio graveolens, Durian
Durio lowianus, Durio malaccensis, Durio oxleyanus,
Durio singaporensis, Durio wyatt-smithii, Durio
zibethinus

27. Dyera costulata, Dyera polyphylla Jelutong

28. Endospermum diadenum, Sesenduk (Peninsular)/ Senduk-senduk mata/ Marapangi (Sabah)/Terbulan (Sarawak)
Endospermum peltatum

29. Eucalyptus deglupta, Eucalyptus grandis, Eucalyptus Eucalyptus
camadulensis, Eucalyptus pellita, Eucalyptus
tereticornis, Eucalyptus hybrids

30. Eusideroxylon zwageri Belian

31. Fagraea crenulata Malabera/ Malabira (Sabah)

32. Gigantochloa levis Buluh beting/Buluh poring
Gigantochloa ligulata Buluh tumpat
Bambusa blumeana Buluh duri
Dendrocalamus asper Buluh betong

33. Gmelina arborea Yemane

34. Gonystylus affi nis, Gonystylus bancanus, Gonystylus Ramin
brunnescens, Gonystylus confuses, Gonystylus
maingayi

35. Hevea brasiliensis Rubber/Getah (Timber-Latex Clones)

36. Heritiera albifl ora, Heritiera aurea, Heritiera Mengkulang/Dungun/Kembang (Sabah)
borneensis, Heritiera globosa, Heritiera javanica,
Heritiera littoralis, Heritiera simplicifolia, Heritiera
sumatrana

37. Hopea apiculata, Hopea auriculata, Hopea beccariana, Merawan/Selangan (Sabah)
Hopea bilitonensis, Hopea bracteata, Hopea coriaceae,
Hopea dryobalanoides, Hopea dyeri, Hopea ferrea,
Hopea ferruginea, Hopea glaucescens, Hopea griffi thii,
Hopea helferi, Hopea johorensis, Hopea mengarawan,
Hopea nervosa, Hopea nutans, Hopea odorata, Hopea
latifolia, Hopea pachycarpa, Hopea pedicellata, Hopea
pierrei, Hopea polyalthioides, Hopea pubescens, Hopea
sangal, Hopea semicuneata, Hopea subalata, Hopea
sublanceolata, Hopea sulcata

38. Ilex cissoidea, Ilex cymosa Mensirah (Peninsular)/ Kerdam (Sarawak)/Morogis (Sabah)

39. Intsia palembanica, Intsia bijuga Mer bau

40. Khaya ivorensis, Khaya
Khaya senegalensis

41. Kokoona littoralis, Kokoona ochracea, Kokoona ovata- Mata ulat (Peninsular)/Bajan (Sarawak)/Perupok Kuning (Sabah)
lanceolata, Kokoona reflexa

42. Koompassia malaccensis Kempas (Peninsular)/Menggaris (Sarawak) Tapang (Sarawak)
Koompassia maingay

43. Macaranga beccariana, Macaranga conifera, Mahang (Peninsular)/ Merkubong (Sarawak)/ Merkubong (Sabah)
Macaranga gigantea, Macaranga hosei, Macaranga
hypoleuca, Macaranga lowii, Macaranga pruinosa,
Macaranga tanarius, macaranga triloba, Macaranga
winkleri

44. Maesopsis eminii Maesopsis

45. Mallotus macrostachyus, Mallotus leucodermis, Balek angin, Mallotus dau/ Dahu (Sabah)
Mallotus miquelianus, Mallotus muticus, Mallotus
penangensis, Mallotus philippensis, Mallotus wrayi

46. Mangifera applanata, Mangifera caesa, Mangifera Machang (Peninsular)/ Embang (Sarawak) Beluno/ Bambangan/Mangga (Sabah)
foetida, Mangifera griffthii, Mangifera indica,
Mangifera longipetiolata, Mangifera laurina,
Mangifera odorata, Mangifera pajang, Mangifera
parvifl ora, Mangifera quadrifi da, Mangifera torquenda

47. Neobalanocarpus heimii Chengal

48. Neolamarckia cadamba, Anthocephalus chinensis. Kelempayan (Peninsular)/ Laran (Peninsular, Sabah)/ Selimpoh (Sarawak)

49. Octomeles sumatrana Binuang

50. Palaquium clarkeanum, Palaquium gutta, Palaquium Nyatoh
hexandrum, Palaquium hispidum, Palaquium
impressinervium, Palaquium maingayi, Palaquium
microphyllum, Palaquium obovatum, Palaquium
oxleyanum, Palaquium regina-montium, Palaquium
rostratum, Palaquium semaram, Palaquium
xanthochymum

51. Paraserianthes falcataria, Albizia falcataria, Albizia Batai/Kayu machis/Kungkur (Sabah)
chinensis, Albizia lebbek, Albizia acle, Albizia
pedicellata, Albizia procera

52. Parashorea densifl ora, Parashorea globosa, Urat mata/Gerutu
Parashorea stellata, Parashorea parvifolia, Parashorea
smythiesii

53. Parkia speciosa, Parkia singularis, Parkia timoriana Petai/Kupang (Sabah)

54. Pentace adenophora, Pentace curtisii, Pentace Melunak (Peninsular)/Baru (Sarawak)/Takalis (Sabah)
laxifl ora, Pentace macrophylla, Pentace triptera


55. Pentaspadon motleyi, Pentaspadon velutinus Pejon/Pelajau

56. Peronema canescens Sungkai

57. Pinus caribaea, Pinus insularis, Pinus merkusii, Pinus Pine
kesiya

58. Pithecellobium splendens Kungkur

59. Pterospermum diversifolium, Pterospermum jackianum, Bayor
Pterospermum subpeltatum

60. Pterocarpus dalbergioides, Pterocarpus indicus, Angsana/Sena/Narra
Pterocarpus macrocarpus, Pterocarpus marsupium,
Pterocarpus santalinus

61. Pterocymbium tinctorium, Pterocymbium javanicum Melembu/Teluto

62. Pterospermum javanicum Bayor Batu

63. Sandoricum beccarianum, Sandoricum koetjape Kelampu (Sarawak)/Sentul (Peninsular, Sabah)

64. Santiria apiculata, Santiria conferta, Santiria Kedondong (Peninsular)/ Seladah (Sarawak)
tomentosa


65. Scaphium linearicarpum, Scaphium longifl orum, Kembang semangkok
Scaphium macropodum, Scaphium scaphigerum

66. Schima wallichii Gegatal/ Gatal-gatal (Sabah)

67. Scorodocarpus borneensis Kulim (Peninsular)/Bawang hutan (Sabah)/Ungsunah (Sarawak)

68. Shorea acuminata, Shorea albida, Shorea almon, Meranti/ Seraya (Sabah)
Shorea andulensis, Shorea argentifolia, Shorea
assamica, Shorea bracteolata, Shorea dasyphylla,
Shorea fallax, Shorea henryana, Shorea hopeifolia,
Shorea hypochra, Shorea laxa, Shorea leprosula,
Shorea macroptera, Shorea myrionerva, Shorea
ochrophloia, Shorea ovalis, Shorea ovata, Shorea
parvifolia, Shorea parvistipulata, Shorea paucifl ora,
Shorea platyclados, Shorea polyandra, Shorea
quadrinervis, Shorea revolute, Shorea retusa, Shorea
roxburghii, Shorea rubra, Shorea rugosa, Shorea
scabrida, Shorea slootenii, Shorea smithiana, Shorea
talura, Shorea teysmanniana, Shorea waltonii

69. Shorea macrophylla Engkabang jantong
Shorea pinanga, Engkabang langgai bukit
Shorea palembanica Engkabang asu
Shorea splendida Engkabang bintang
Shorea macrantha Engkabang bungkus
Shorea hemsyleyana Engkabang gading
Shorea stenoptera, Engkabang rusa
Shorea seminis Engkabang terendak
and other Engkabang Kawang (Sabah) species

70. Sindora coriacea, Sindora echinocalyx, Sindora Sepetir (Peninsular)/Tampar hantu (Sarawak)
siamensis, Sindora velutina, Sindora wallichii

71. Swietenia macrophylla Mahogany

72. Tectona grandis Teak/Jati

73. Terminalia bellirica, Terminalia calamansanai, Talisai (Sabah)/ Jelawai/ Jaha (Semenanjung)/Kedandi (Sarawak)
Terminalia catappa, Terminalia citrina, Terminalia
copelandii, Terminalia foetidissima, Terminalia
phellocarpa, Terminalia subspathulata

74. Tetramerista glabra Punah (Peninsular)/Kayu hujan (Sarawak)/Tuyot (Sabah)

75. Toona calantas, Toona ciliata, Toona sinensis, Toona Surian/Limpaga/Red cedar
sureni

76. Vatica albiramis, Vatica bella, Vatica cinerea, Vatica Resak
cuspida, Vatica dulitensis, Vatica fl avida, Vatica
havilandii, Vatica heroptera, Vatica lowii, Vatica
maingayi, Vatica mangachapoi, Vatica maritima, Vatica
micrantha, Vatica nitens, vatica oblongifolia, Vatica
odorata, Vatica paucifl ora, Vatica rassak, Vatica
sarawakensis, Vatica scortechinii, Vatica venulosa


Made 23 December 2009

[0.3865/230 Vol. 6 (SK.); 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]