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]