Income Tax (Deductions for Promotion of Export of Higher Education) Rules 2001

P.U. (A) 185...............28 June 2001

Income Tax (Deductions for Promotion of Export of Higher Education) Rules 2001

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 Higher Education) Rules 2001.

(2)     These Rules shall have effect for the year of assessment 1996 and subsequent years of assessment.

Interpretation

2.  For the purpose of these Rules, "a company" means a company incorporated under the Companies Act 1965 [Act 125] with the primary purpose of establishing, managing and owning a private higher educational institution which is registered with the Ministry of Education Malaysia.

Company eligible for deduction

3.  (1)     Every company which carries on the business of providing higher education in Malaysia and 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.

(2)     A company which is eligible for a deduction under these Rules shall not be eligible for a deduction under the Income Tax (Deductions for Promotion of Export of Services) Rules 1999 [P. U. (A) 193/99].

Deductions

4.  (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 subrule 4(2) which were incurred-

(a)  by that company during that basis period with respect to that business; and

(b)  primarily and principally for the purpose of promoting the export of higher education.

(2)     The outgoings and expenses referred to in subrule 4(1) are-

(a)  expenses incurred in respect of market research for the purpose of the export of higher education;

(b)  the cost of tender preparations for the purpose of the export of higher education;

(c)  the cost of preparing technical information for the export of higher education;

(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 higher education or participating in education fairs for the purpose of promoting the export of higher education which are held outside Malaysia and approved by the Ministry of Education Malaysia 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 directly incurred for participating in education fairs for the purpose of promoting the export of higher education approved by the Ministry of Education Malaysia other than those expenses specified in paragraph 4(2) (d) ;

(f)   expenses for the cost of maintaining sales office overseas for the purpose of promoting the export of higher education; and

(g)  expenses incurred in respect of publicity and advertisement in any media outside Malaysia for the promotion of the export of higher education.

(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 having a place of business and subject to tax in the country where such outgoings and 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 subrule 4(1) , where two basis periods overlap, the period common to both shall be deemed to fall in the first basis period only.

Made 7 June 2001.

[Per. 0. 3865/73(SJ14) (Vol. 3) ; LHDN. 01/35/(S) /42/51/82-11. 2; PN(PU2) 80/XXX]

On behalf and in the name of the Minister of Finance,

CHAN KONG CHOY

Deputy Minister of Finance

[To be laid before the Dewan Rakyat pursuant to subsection 154(2) of the Income Tax Act 1967]