Income Tax (Exemption) (No. 2) Order 2009

Income Tax (Exemption) (No. 2) 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. 2) Order 2009.

(2) This Order is deemed to have come into operation on 2 September 2006.

Interpretation

2. In this Order, unless the context otherwise requires—

“approved business” means the new business and expansion project as defined in the Income Tax (Exemption) (No. 17) Order 2007 [P.U. (A) 371/2007] and the Income Tax (Exemption) (No. 18) Order 2007 [P.U. (A) 372/2007];

“approved company” means a Bio Nexus status company that has been given an exemption from the payment of income tax under the Income Tax (Exemption) (No. 17) Order 2007 [P.U. (A) 371/2007] or Income Tax (Exemption) (No. 18) Order 2007 [P.U. (A) 372/2007], as the case may be;

“the exemption year of assessment” means the year of assessment where an approved company has been given exemption from the payment of income tax under the Income Tax (Exemption) (No. 17) Order 2007 or the Income Tax (Exemption) (No. 18) Order 2007, as the case may be.

Exemption

3. (1) The Minister exempts an approved company in the basis period for a year of assessment from the payment of income tax in respect of statutory income derived from an approved business for a period of ten consecutive years of assessment commencing after the exempt year of assessment, relating to the approved company.

(2) Subject to paragraph 4, the statutory income referred to in subparagraph (1) shall be determined in accordance with the following formula:


A x C
B

Where A is the amount of tax charged on the chargeable incomeof the approved company in respect of its approved business at the prevailing tax rate reduced by the amount of tax charged on such chargeable income at the rate of twenty per cent;

B is the amount of tax charged on such chargeable income at the prevailing tax rate; and

C is the amount of such chargeable income.

(3) Nothing in subparagraph (1) shall absolve or is deemed to have absolvedthe approved 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.

Statutory income

4. (1) The statutory income referred to in subparagraph 3(1) 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.

(2) Where an asset used for the purpose of the approved business is also used for the purpose of a business other than that approved business, then 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 that approved business.

Chargeable income

5. (1) The chargeable income in relation to the source consisting of an approved business for a year of assessment shall be the statutory income from that source reduced by any deduction falling to be made pursuant to subsection 43(2) of the Act relating to that source.

(2) The chargeable income in relation to the source or sources other than the source consisting of an approved business for a year of assessment shall be the statutory income from that source or the aggregate of the statutory income from each of those sources, as the case may be, reduced by any deduction falling to be made pursuant to subsections 43(2) and 44(1) of the Act.

(3) For the purposes of subparagraph (2), in making the deductions under subsections 43(2) and 44(1) of the Act, no regard shall be made to the adjusted loss, if any, from the source consisting of the approved business.

Separate source and account

6. (1) Where an approved company carries on an approved business, the income derived from that approved business shall be treated as a separate and distinct business source of the approved company.

(2) The approved company which is exempted under subparagraph 3(1) shall maintain a separate account for the income derived from the approved business.


Made 9 April 2009

[Perb. 0.3865/366 Vol. 3 (SK. 5); LHDN 01/35/(S)/42/51/82-64; PN(PU2)80/LVI]

Tan Sri Nor Md bin Yakcop
Second Minister of Finance

[To be laid before the Dewan Rakyat pursuant to subsection 127(4) of the Income Tax Act 1967]

Income Tax (Exemption) (Amendment) Order 2009

Income Tax (Exemption) (Amendment) 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) (Amendment) Order 2009.

(2) This Order is deemed to have effect from the year of assessment2008.

Amendment of paragraph 3

2. The Income Tax (Exemption) (No. 11) Order 2005 [P.U. (A) 75/2005], which is referred to as the “principal Order” in this Order, is amended in paragraph 3 by substituting for subparagraph (1) the following subparagraph:

“3. (1) The Minister exempts a venture capital company from the payment of income tax in respect of the statutory income on all sources of income, other than interest income arising from savings or fixed deposits and profits from syariah-based deposits, commencing from the year of assessment in the basis period the venture capital company commences business or the year of assessment of the coming into effect of this Order, whichever is the later, upon satisfying the conditions as specified in paragraph 4, for an exempt period of—

(a) where the qualification under subparagraph 4(a) is fulfilled, ten years of assessment or the years of assessment equivalent to the life of the fund established for the purpose of investing in a venture company, whichever is the lesser; or

(b) where the qualification under subparagraph 4(aa) is fulfilled, five years of assessment or the years of assessment equivalent to the life of the fund established for the purpose of investing in a venture company, whichever is the lesser.”.

Amendment of paragraph 4

3. Paragraph 4 of the principal Order is amended—

(a) by substituting for subparagraph (a) the following subparagraph:

“(a) relating to an exempt period of ten years of assessment under subsubparagraph 3(1)(a), it has invested at least seventy percent of its invested funds in venture companies at the point of the first investment, or where the investment is in the form of seed capital at least fifty percent of its invested funds at the point of the first investment;”; and

(b) by inserting after subparagraph (a) the following subparagraph:

“(aa) relating to an exempt period of five years under subsubparagraph 3(1)(b)—

(i) it has invested at least thirty percent of its invested funds in the form of seed capital, start-up financing, early stage financing or its combination in venture companies at the point of the first investment; and

(ii) it has made an application for the exemption to the Securities Commission between 30 August 2008 and 31 December 2013;”.

Savings provisions

4. (1) Where a venture capital company has been granted an exemption under the provisions of the principal Order prior to its amendment in this Order—

(a) such exemption shall continue to remain in full force and effect;

(b) such exemption shall be subject to the provisions of the principal Order prior to its amendment in this Order; and

(c) the provisions of the principal Order as amended in this Order shall not apply to such exemption.

(2) For the purposes of subparagraph (1), it shall be treated as if this Order has not been made and the provisions of the principal Order prior to its amendment in this Order shall remain in full force and effect.


Made 9 April 2009

[Perb.CR(8.09)294/6/4/-9(SJ. 9)(2009)Jld. 2(SK. 1)(6); LHDN. 01/35/(S)/42/51/231-17.10; PN(PU2)80/XLVI]

Tan Sri Nor Md bin Yakcop
Second Minister of Finance

[To be laid before the Dewan Rakyat pursuant to subsection 127(4) of the Income Tax Act 1967]

Income Tax (Exemption) Order 2009

Income Tax (Exemption) 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) Order 2009.

(2) This Order shall have effect from the year of assessment 2008 and subsequent years of assessment except for subsubparagraph 2(3)(a).

(3) Subsubparagraph 2(3)(a) shall have effect from the year of assessment 2008 until the year of assessment 2010.

Exemption

2. (1) The Minister exempts an employee from the payment of income tax in relation to the benefit or gift specified in the Schedule which is received by such employee from his employer in ascertaining gross income from his employment in the basis period for a year of assessment.

(2) The benefit and gift referred to in subparagraph (1) shall be such benefit and gift that are generally provided to all employees.

(3) The exemption granted to an employee under subparagraph (1) for the following benefit shall be subject to the limits as specified:

(a) the travelling allowance, petrol card, petrol allowance or any of its combination, for travelling to and from home to the place of work shall not exceed RM2,400.00 per year;

(b) the travelling allowance, petrol card, petrol allowance or toll payment or any of its combination, for travelling in the performance of employment at a place other than his place of work, shall not exceed RM6,000.00 per year;

(c) the child care allowance shall not exceed RM2,400.00 per year;

(d) the discounted price for consumable business products of the employer shall not exceed RM1,000.00 per year; and

(e) the amount of subsidy on interest of housing, education or car loan shall be determined in accordance with the following formula:

A X B
C

A difference between the amount of interest to be borne by the employee and the amount of interest payable by the employee in a basis period for a year of assessment;

B the total aggregate of balance of the principal amount of the housing, education or car loan taken by the employee in a basis period for a year of assessment or RM300,000.00, whichever is the lower; and

C the total aggregate of the principal amount of the housing, education or car loan taken by the employee.

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

Non-application

3. This Order shall not apply to an employee where the employee has control over his employer in the following manner:

(a) where his employer is a company, the employee has the power to secure that the affairs of the company or any other company that has control over his employer are conducted in accordance with the wish of the employee in the following manner:

(i) by means of the holding of shares in the company or such other company;.

(ii) the possession of voting power in relation to the company or such other company; or

(iii) by means of any power conferred by the articles of association or other document regulating the company or such other company;

(b) where the employee is the employer’s partner in a partnership; or

(c) where the employee is a sole proprietor, the employee and employer is the same person.

SCHEDULE

Benefit

Travelling allowance, petrol card and petrol allowance

Toll payment

Parking rate and parking allowance

Meal allowance

Child care allowance

Payment for traditional medicine and maternity expenses

Discounted price for consumable business products of the employer

Discounted price for services provided by the business of the employer and for the benefit of the employee, spouse and child of the employee

Monthly bill for subscription of broadband, fixed line telephone, mobile phone and pager registered under the name of employee or employer

Subsidy of interest of housing, education and car loan

Gift

Pager

Personal digital assistant

Telephone

Mobile phone


Made 6 April 2009

[Perb. CR(8.09)294/6/4-9 (Sj. 9)(2009)(Sk. 7); LHDN 01/35/(S)/42/51/231-17.10; PN(PU2)80/LVI]

Tan Sri Nor Md bin Yakcop
Second Minister of Finance

[To be laid before the Dewan Rakyat pursuant to subsection 127(4) of the Income Tax Act 1967]

Income Tax (Deduction for Benefit and Gift from Employer to Employee) Rules 2009

Income Tax (Deduction for Benefit and Gift from Employer to Employee) Rules 2009

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 Benefit and Gift from Employer to Employee) Rules 2009.

(2) These Rules shall have effect from the year of assessment 2008 and subsequent years of assessment except for paragraph 2(1)(b).

(3) Paragraph 2(1)(b) shall have effect from the year of assessment 2008 until the year of assessment 2010.

Deduction

2. In ascertaining the adjusted income of a person resident in Malaysia from its business in the basis period for a year of assessment, there shall be allowed as deduction expenses incurred by such person in respect of the following benefit and gift to his employees:

(a) payment of monthly bill for subscription of broadband, fixed line telephone, mobile phone or pager issued in the name of the employee or in the name of such person as the employer;

(b) travelling allowance, petrol card or petrol allowance provided for employees from home to place of work and from place of work to home; and

(c) personal digital assistant, telephone, mobile phone or pager.


Made 6 April 2009

[Perb. CR(8.09)294/6/4-9 (Sj. 9)(2009)(Sk. 7); LHDN 01/35/(S)/42/51/231-17.10; PN(PU2)80/LVI]

Tan Sri Nor Md bin Yakcop
Second Minister of Finance

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