Professional Documents
Culture Documents
l 189 l
Exemption No. of
No Category (% of Statutory Years
income)
6 Automotive component modules [S. 5(1DC)] 100 5
7 Company undertaking reinvestment in post-pioneer period [S. 5(1DD)] 70 or 100 5
8 Commercialisation of R&D findings [S. 5(1DF)] 100 10
The 10-year tax relief period indicated above would be granted for an initial 5 years period and would be extended
by another 5 years when the relevant conditions are fulfilled.
l 190 l
Reinvestment Allowance (RA)
RA, an incentive granted under Sch 7A of the Income Tax Act 1967, is available to manufacturing companies that
reinvest their capital to embark on a project for either expansion of existing production capacity, modernisation or
automation of the production facilities, or diversification into related products. RA is also available to companies
engaged in agricultural projects (e.g. cultivation of rice, maize, fruits, vegetables, tubers and roots, livestock farming,
spawning, breeding or culturing aquatic products, etc.).
The rate of RA is 60% on the qualifying capital expenditure (i.e. factory, plant and machinery) and is granted in
addition to capital allowances. The RA is used to reduce up to 70% of statutory income of the manufacturing company
from its business source in respect of the qualifying project. Any unused RA may be carried forward indefinitely. A
company can claim RA up to 100% of its statutory income in a particular year of assessment if it could demonstrate
that the level of process efficiency ratio exceeds the industrial average for the year.
The incentive period for RA is 15 years from the first year of claim by a company. Unlike PS or ITA, this incentive
does not require prior approval from any of the authorities. RA incentive cannot be claimed in the same basis period
if a company is also enjoying PS or ITA incentives.
In addition to Sch 7A of the Income Tax Act 1967, the Inland Revenue Board has also issued Public Ruling
6/2012 Reinvestment Allowance which seeks to provide more details and clarifications on how the
provisions in Sch 7A should be interpreted and applied.
Summary
The details of the tax incentives for the various industry sectors can be found in the following sections of this chapter:
Sector Reference
1 Manufacturing 18.2
2 Trading 18.3
3 Agricultural 18.4
4 Tourism 18.5
5 Research and development 18.6
6 Education and healthcare 18.7
7 Communications, utilities, transportation and green technology 18.8
8 High technology and multimedia 18.9
9 Service 18.10
10 Waste Recycling 18.11
11 Real Estate Investment Trust 18.12
12 Islamic Financing 18.13
13 Biotechnology 18.14
14 All sectors 18.15
15 Property development sector 18.16
l 191 l
18.2 MANUFACTURING SECTOR
l 192 l
Manufacturing Sector (contd.)
l 193 l
Manufacturing Sector (contd.)
l 194 l
Manufacturing Sector (contd.)
l 195 l
Manufacturing Sector (contd.)
l 196 l
18.4 AGRICULTURAL SECTOR
l 197 l
Agricultural Sector (contd.)
(b) Claimant company A company which (b) Claimant company Group relief on 100% of
belongs to a group of companies where one the current year losses of the surrendering
of the companies in the group has company is available for tax deduction against
surrendered current year losses from the aggregate income of the claimant company
undertaking a forest plantation project [Income Tax (Exemption) (No. 11) Order 2009]
l 198 l
Agricultural Sector (contd.)
l 199 l
18.5 TOURISM SECTOR
l 200 l
Tourism Sector (contd.)
l 201 l
Tourism Sector (contd.)
l 202 l
Research and Development (R&D) Sector (contd.)
l 203 l
Education and Healthcare Sector (contd.)
l 204 l
Education and Healthcare Sector (contd.)
l 205 l
Education and Healthcare Sector (contd.)
Eligibility Tax
52. Exemption of statutory income
Companies undertaking Approved Service Exemption of income tax on 100% of statutory
Projects (ASPs) of national and strategic income for 10 years
importance in the service sector in relation to
transportation, communication, utilities or any
other sub-sector approved by the Minister
Companies undertaking ASPs in Sabah, Sarawak Exemption of income tax on 85% of statutory
and the Eastern Corridor of Peninsular Malaysia income for 5 years
Companies undertaking ASPs in other areas in Exemption of income tax on 70% of statutory
Malaysia income for 5 years
Unabsorbed capital allowances and losses are not
allowed to be carried forward to post exemption
period
Companies undertaking generation of energy Exemption of income tax of 100% of statutory
using biomass, hydropower (not exceeding 10 income for 10 years for applications received by
megawatts) and solar power. MIDA up to 31 Dec 2015 (2011 Budget)
l 206 l
Communications, Utilities and Transportation and Green Technology Sectors (contd.)
l 207 l
Communications, Utilities and Transportation and Green Technology Sectors (contd.)
l 208 l
High Technology and Multimedia Sector (contd.)
l 209 l
Service Sector (contd.)
l 210 l
Service Sector (contd.)
l 211 l
Service Sector (contd.)
l 212 l
Service Sector (contd.)
l 213 l
Service Sector (contd.)
l 214 l
Service Sector (contd.)
l 215 l
Service Sector (contd.)
l 216 l
Service Sector (contd.)
l 217 l
Service Sector (contd.)
l 218 l
Service Sector (contd.)
l 219 l
Service Sector (contd.)
l 220 l
Service Sector (contd.)
l 221 l
Real Estate Investment Sector (contd.)
l 222 l
18.13 ISLAMIC FINANCING SECTOR
l 223 l
Islamic Financing Sector (contd.)
l 224 l
Islamic Financing Sector (contd.)
l 225 l
Islamic Financing Sector (contd.)
l 226 l
Islamic Financing Sector (contd.)
l 227 l
Islamic Financing Sector (contd.)
l 228 l
Islamic Financing Sector (contd.)
l 229 l
18.14 BIOTECHNOLOGY SECTOR
l 230 l
Biotechnology Sector (contd.)
l 231 l
All Sectors (contd.)
l 232 l
All Sectors (contd.)
l 233 l
All Sectors (contd.)
l 234 l
All Sectors (contd.)
l 235 l
All Sectors (contd.)
l 236 l
Property Development Sector (contd.)
l 237 l