INCOME TAX (DEDUCTIONS FOR PROMOTION OF EXPORT OF SERVICES) RULES
1999
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 (Deductions for Promotion of Export of
Services) Rules 1999.
(2) These Rules shall have effect for the year
of assessment 1996 and subsequent years of assessment.
Company eligible for deduction
2. Every company resident in Malaysia for the
basis year for a year of assessment shall be eligible for the deduction under
these Rules for that year of assessment.
Deductions
3. (1) Subject
to these Rules, for the purpose of ascertaining under the Act the adjusted
income of a company from its business for the basis period for a year of
assessment, there shall be allowed as a deduction any outgoings and expenses of
the kind described in subparagraph (2) which-
(a) were incurred by that company during that
basis priced with respect to that business; and
(b) were incurred primarily and principally for
the purpose of promoting the export of services.
(2) The outgoings and expenses referred to in
subparagraph (1) are-
(a) expenses incurred in respect of market
research for the purpose of the export of services;
(b) the cost of tender preparations for the
purpose of the export of services;
(c) the cost of preparing technical information
for the export of services;
(d) expenses by way of fares in respect of travel
to a country outside Malaysia by a representative of the company being a travel
necessarily undertaken for the promotion of export of services and actual
expenses subject to a maximum of two hundred ringgit per day for accommodation
and a maximum of one hundred ringgit per day for sustenance for the whole of
the period commencing with the representative's departure from Malaysia and
ending with his return to Malaysia;
(e) expenses for the cost of maintaining sales
office overseas for the purpose of promoting the export of services; and
(f) expenses incurred in respect of publicity and
advertisement in any media outside Malaysia for the promotion of the export of
services.
(3) The deduction allowed under
these Rules shall be in addition to any deduction allowable under section 33 of
the Act.
(4) No deduction shall be
allowed under these Rules in respect of any outgoings, expenses or other
payments which are-
(a) of the kind mentioned in subsection 39(1) of
the Act; or
(b) incurred by a company havings a place of
business and subject to tax in the country where such outgoings or expenses
were incurred.
(5) Where the amount of any outgoings and
expenses, the whole of which would have been allowable as a deduction under
these Rules but for this paragraph, exceed the amount which in the opinion of
the Director General would reasonably be expected to be incurred in the
ordinary course of the business with respect to which those outgoings and
expenses were incurred, the Director General may to the extent of that excess
disallow that amount as a deduction under these Rules.
(6) For the purpose of subparagraph (1), where
two basis periods overlap, the period common to both shall be deemed to fall in
the first basis period only.
Made
20 April 1999
[Perb.
0.3865/73 (SJ 14) (Vol. 2); LHDN. 01/35/(S)/42/51/82-36.1; PN(PU2)80/XXVI]
DATO' MUSTAPA BIN
MOHAMED
Second Minister of
Finance
[To be laid before the Dewan Rakyat pursuant to subsection 154(2)
of the Income Tax Act 1967]
