INCOME TAX (DEDUCTIONS FOR APPROVED TRAINING) RULES 1992

INCOME TAX (DEDUCTIONS FOR APPROVED TRAINING) RULES 1992

 

IN exercise of the powers conferred by section 154(1)(b) of the Income Tax Act, 1967, the Minister makes the following rules :

 

RULE 1           CITATION AND COMMENCEMENT

 

1(1)   These Rules may be cited as the Income Tax (Deductions for Approved Training) Rules 1992 and except for rules 2(2) and 5 shall have effect for the year of assessment 1992 and subsequent years of assessment.

 

1(2)   Rules 2(2) and 5 shall be deemed to have effect for the years of assessment 1991 and subsequent years of assessment.

 

RULE 2           INTERPRETATION

 

2(1)   For purposes of these Rules –

 

“employee” means an employee of a company who is a citizen of Malaysia.

 

“expenditure incurred” in relation to a training programme conducted by a training institution shall be the amount paid by a company to that training institution in respect of a training programme;

 

“training institution” means a training institution approved by the Minister of Finance

 

History

Definitation of “training institution substitued by PU (A)       “training institution” means a

111/95, r.2, effective for year of assessment 1992 and           institution specified in the Schedule.

subsequent years of assessment.  Definition formerly

read:

 

2(2)   For purpose of rule 5 –

 

“hotel business” means the carrying on of a business in a hotel including a motel, chalet or hostel, where such business provides sleeping accommodation and may include providing of food, drinks and other services or facilities and the granting of concessions of any part of such hotel for purposes connected with and incidental to the promotion of tourism;

  

“tour operating business” has the meaning assigned to it under the Tourist Development Corporation (Tour Operating Business and Travel Agency Business) Regulations 1985.

 

 

RULE 3           DEDUCTIONS FOR MANUFACTURING COMPANY

 

3(1)   Subject to rules 7 and 8 for the purpose of ascertaining the adjusted income of a manufacturing company, which has commenced business, there shall be allowed as a deduction any expenditure incurred by such a company in training its employees for the purpose of upgrading and developing the employees’ craft, supervisory and technical skills or increasing the productivity or quality of its products under –

 

(a)     a training programme approved by the Malaysian Industrial Development Authority; or

(b)     a training programme conducted by a training institution.

 

3(2)   Subject to rules 7 and 8 for the purpose of ascertaining the adjusted income of a manufacturing company, which has not commenced business, for the year of assessment in which the gross income first arises, there shall be allowed as a deduction double the amount of any expenditure incurred by such a company during its precommencement period in training its employees for the acquisition of craft, supervisory or technical skills which will contribute directly to the future production of its products under –

 

(a)     a training programme approved by the Malaysian Industrial Development Authority; or

(b)     a training programme conducted by a training institution.

 

RULE 4           DEDUCTION FOR NON-MANUFACTURING COMPANY

 

4.      Subject to rules 7 and 8 for the purpose of ascertaining the adjusted income of a non-manufacturing company there shall be allowed as a deduction any expenditure incurred in training its employees under –

 

(a)     a training programme approved by the Minister of Finance or any agency appointed by the Minister of Finance; or

(b)     a training programme conducted by a training institution.

 

RULE 5           DEDUCTION FOR COMPANY CARRYING ON A HOTEL OR TOUR OPERATING BUSINESS

 

5.      Subject to rules 7 and 8 for the purpose of ascertaining the adjusted income of a company carrying on a hotel business in a hotel registered with the Tourist Development Corporation of Malaysia or a company carrying on a tour operating business registered with the Tourist Development Corporation of Malaysia, there shall be allowed as a deduction any expenditure incurred in training its employees under –

 

(a)     a training programme approved by the Minister of Culture, Arts and Tourism; or

(b)     a training programme conducted by a training institution.

 

 

RULE 6           DEDUCTION FOR TRAINING OF HANDICAPPED PERSONS

 

6.      Subject to rules 7 and 8 for the purpose of ascertaining the adjusted income of a company there shall be allowed as a deduction double the amount of any expenditure incurred in training any handicapped person registered with the Ministry of National Unity and Social Development, who is not an employee of the company under –

 

(a)     a training programme approved by the Minister of Finance, which is conducted in Malaysia; or

(b)     a training programme conducted by a training institution.

 

and the training programme is for the purpose of enhancing his employment prospect.

 

RULE 7           SATISFICATION OF CONDITIONS TO QUALITY FOR DEDUCTION

 

7.      In order to qualify for a deduction under these Rules, a company claiming the deduction shall –

 

(a)     in the case of an approved training programme, produce a letter of approval from the relevant approving authority; and

(b)     in the case of a training programme conducted by a training institution, produce a letter from the training institution certifying that the employee of the company has attended such training programme.

 

RULE 8           REVOCATION OF APPROVAL

 

8.      Where an approval of a training programme under rule 7(a) is at any time revoked, no deduction shall be allowed under rule 3(1)(a), 3(2)(a), 4(a), 5(a) or 6(a) for any expenditure incurred for such training for the year or years of assessment to which the revocation relates.

 

RULE 9           REVOCATION

 

9.      The Income Tax (Deductions for the Construction Industry) Rules 1981, the Income Tax (Deductions for Approved Training) Rules 1987 and the Income Tax (Deductions for Approved Training for Small Scale Companies) Rules 1990 shall be revoked with effect from the year of assessment 1992 and subsequent years of assessment.

 

 

SCHEDULED (DELETED)

 

History

Schedule deleted by PU (A) 111/95, r.3,                         (iii)      Mara Institute of Technology (ITM)

effective for year of assessment 1992 and                       (iv)       Malaysian Agricultural and Research

subsequent years of assessment.                                                 Development Institute (MARDI)

                                                                                        (v)        Forest Research Institute of Malaysia (FRIM)

Schedule formerly read:                                                  (vi)       Penang Skills Development Centre (PSDC)

“SCHEDULE          Rule 2(I)                                        

 

Training Insitutions                                                                                    

(i)  National Productivity Centre (NPC)                         (vii)      Institut Kemahiran Mara (IKM)

(ii) Standard and Industrial Research                            (viii)     The Centre for Instructor and

                Institute of Malaysia (SIRIM)                  Advanced Skill Training (CIAST) (for training programmes for a period not exceeding six months)