INCOME TAX (EXEMPTION) (NO. 16) ORDER 1999
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. 16) Order 1999.
(2) This Order shall have effect from the year
of assessment 1999.
Interpretation
2. In this Order, unless the context otherwise
requires -
"export sales" means sales derived from exports of local
and imported goods and commodities, but does not include trading commissions
and profits derived from trading at the Commodity Exchange and sales to Free
Industrial Zones and Licensed Manufacturing Warehouses;
"Malaysia External Trade Development Corporation" means
the corporation established under section 3 of the Malaysia External Trade
Development Corporation Act 1992 [Act 490];
"Malaysian International Trading Company" means a
company approved by the Malaysia External Trade Development Corporation which
has fulfilled the following conditions:
(a) the company is
incorporated in Malaysia and at least 70 per cent of the issued share capital
of the company is Malaysian owned;
(b) the company has
achieved annual sales of more than RM25 million; and
(c) the company exports
manufactured goods especially from Malaysian small and medium companies;
"Malaysian small and medium company" means a company
with annual sales of less than RM25 million and with not more than 150
employees;
"related company" means a company where -
(a) at least 20 per cent
of Malaysian International Trading Company issued share capital is beneficially
owned, either directly or indirectly, by that company; or
(b) at least 20 per cent
of the issued share capital of that company is beneficially owned, either
directly or indirectly, by the Malaysian International Trading Company.
Exemption
3. (1) The Minister exempts the Malaysian
International Trading Company from the payment of income tax up to an amount
equivalent to 70 per cent of the statutory income of the company for the basis
period for a year of assessment arising from an increase of its export sales,
which shall be determined in accordance with the following formula:
A x B
C
where
A is the statutory income of the company in relation to its export
sales in that basis period;
B is the increase of the export sales of the company in that basis
period over the export sales in the immediately preceding basis period; and
C is the total of the export sales of the company in that basis
period.
(2) The exemption under paragraph (1) shall be
granted to the Malaysian International Trading Company for five consecutive
years of assessment beginning from the year of assessment in which that company
first qualified for the exemption.
Qualifications for exemption
4. To qualify for the exemption under paragraph
3, the Malaysian International Trading Company claiming the exemption shall
obtain a letter from the Malaysia External Trade Development Corporation
certifying that the following conditions have been fulfilled:
(a) that the
company is incorporated in Malaysia and at least 70 per cent of the issued
share capital of the company is Malaysian owned;
(b) that the
company has achieved annual sales of more than RM25 million;
(c) that the
company exports manufactured goods especially from Malaysian small and medium
companies;
(d) that not
more than 20 per cent of the company's annual sales is derived from the trading
of commodities;
(e) that not
more than 20 per cent of the company's annual sales is derived from the sales
of goods of related companies; and
(f) that the
company uses local services for the purposes of banking, finance and insurance
and uses local ports airports.
Made
13 July 1999.
[Perb.
0. 3865/73(SJ51) ; LHDN. 01/35/(S) /42/51/82-10. 1; PN(PU2) 80/XXVI]
DATO' MUSTAPA BIN
MOHAMED
Second Minister of
Finance
[To be laid before the Dewan Rakyat pursuant to subsection
127(4) of the Income Tax Act 1967].
