INCOME TAX (DEDUCTION FOR COST ON ACQUISITION OF A FOREIGN OWNED
COMPANY) RULES 2003 [P.U. (A) 310]
(Gazetted on 21 August, 2003)
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 Cost on
Acquisition of a Foreign Owned Company) Rules 2003.
(2) These Rules are deemed to have come
into operation on 21 September 2002.
Interpretation
2.
In these Rules, unless the context otherwise requires—
“acquisition of foreign owned company”
means acquisition of a foreign owned company located outside Malaysia for the
purpose of acquiring high technology for production within the country or for
acquiring new export markets
for local products as approved by the
Malaysian Industrial Development Authority;
‘
“locally owned company” means a resident company in Malaysia which is
established under the Companies Act 1965 [Act 125] and involved in
manufacturing, trading or marketing activities
of local products where—
(a) for a company which
is not listed on the stock exchange established under subsection 8(2) of the
Securities Industry Act 1983 [Act 280], at least sixty per cent of its equity
is directly owned by
Malaysian;
or
(b) for a company which
is listed on the stock exchange established under subsection 8(2) of the Securities
Industry Act 1983—
(i) at least
fifty per cent of its equity is directly owned by the Malaysian; and
(ii) at
least sixty per cent of its equity is directly owned by the Malaysian on the
first day of listing on the stock exchange;’
(Amendment
Rules 2008 [P.U. (A) 81])
“pioneer company” has the same meaning
as defined under section 2 of the Promotion of Investments Act 1986 [Act 327].
Deduction
3.
(1) In ascertaining the adjusted income from the business of a locally owned
company which has incurred cost of acquisition of a foreign owned company in
the basis period for a year of assessment, there shall be allowed a deduction
of an amount equal to one-fifth of that cost for that year of assessment and
for each of the four following years of assessment.
(2) For the purpose of deduction under subrule (1), the cost of
acquisition of a foreign owned company is deemed to be incurred in the basis
period for the year of assessment in which the date of completion of the
acquisition falls as verified by the Malaysian Industrial Development
Authority.
(3) Where the cost of acquisition of a foreign owned company is
incurred by a pioneer company, the pioneer company may make an election that
the deduction referred to in subrule (1) be allowed for the first year of
assessment and four subsequent years of assessment in the post pioneer period.
“Non-application
(4) These Rules shall not apply to a company which submits its
application to Malaysian Industrial Development Authority after 31 December
2008.”.
(Amendment
Rules 2008 [P.U. (A) 81])
Made
5 August 2003
[Perb.
0.3865/325; LHDN. 01/35/(S)/42/51/231-17.3; PN(PU2)80/XXXVIII]
DR. JAMALUDIN BIN MOHD JARJIS
Second Minister of Finance
[To be laid before the
Dewan Rakyat pursuant to subsection 154(2) of the Income Tax Act 1967]
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