INCOME TAX (EXEMPTION) (NO. 12) ORDER 2002 [P.U.(A) 60]
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.12) Order 2002.
(2) This Order shall have effect from the year of
assessment 2002.
Interpretation
2. In this Order, unless the context otherwise
requires —
“value of increased exports ” means the difference of free on
board value of goods and commodities exported in a basis period and that of the
immediately preceding basis period;
“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 Zone 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.
Exemption
3. (1) The Minister exempts a Malaysian
International Trading Company from the payment of income tax in respect of
income derived from export sales in the basis period for a year of
assessment,in the amount and manner prescribed in paragraph 4 subject to the
conditions stipulated in paragraph 6.
(2) The exemption under
subparagraph (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.
Amount
of Income to be exempt
4. (1) The amount of income referred to in paragraph
3 shall be equal to 10 per cent of the value of increased exports.
(2) Where an amount of
income equivalent to 10 per cent of the value of increased exports has been
determined for a year of assessment,so much of the statutory income of the business
of the Malaysian International Trading Company for that year of assessment as
is equal to that value of increased exports (or to the aggregate amount of any
such value of increased export, as the case may be) but not exceeding 70 per
cent of the statutory income shall be exempted from tax.
Insufficiency
of income
5. Where by reason of the
restriction of 70 per cent of the statutory income or of an insufficiency or
absence of statutory income from a business of the Malaysian International
Trading Company for the basis period for a year of assessment,effect cannot be
given or cannot be given in full to the amount of the determined value of
increased exports to which the Malaysian International Trading Company is
entitled under paragraph 4 for that year of assessment, then so much of that
amount or the aggregate amount as cannot be given for that year shall be given
to the Malaysian International Trading Company for the first subsequent year of
assessment for the basis period for which there is statutory income from that
business, and for subsequent years of assessment until the Malaysian
International Trading Company has received the whole of the amount or the
aggregate amount to which it is so entitled.
Conditions
for exemption
6. 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 60 per cent of the issued
share capital of the company is Malaysian owned;
(b) that
the company has achieved annual sales of more than RM10 million;
(c) that
not more than 20 per cent of the Company’s annual sales is derived from the
trading of commodities; and
(d) that
the company uses local services for the purposes of banking, finance and
insurance and uses local ports and airports.
Application
of paragraphs 5 and 6 of Schedule 7A
7. Paragraphs 5 and 6 of
Schedule 7A to the Act shall apply mutatis mutandis to the amount of
income exempted under paragraph 3.
Made
24 January 2002.
[Perb.
0.3865/73 (SJ51); LHDN.01/35/(S)/42/51/231-2; PN(PU2) 80/XXXI]
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 127(4) of the Income Tax Act 1967]
