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Investor company is given the incentive of revenue deduction over 5 years on the cost of
investment in foreign owned company (MIDA will verify this)
b) Listed company
On the first day of listing on stock
exchange, at least 60% of ordinary shares
are owned by Malaysian citizens,
thereafter at least 50%
Consideration
of shares paid including professional fees paid to
Acquisition bankers, valuers, auditors,
cost accountants, tax agents,
Incidental cost
consultants, or legal advisers; cost
of transfers including stamp duties;
related travelling and
accommodation expenses incurred
for the purpose of the acquisition.
Deduction would be 20% of the cost of investment for each year for a period of 5 YAs against
business income of the investor company.
Deduction
Amount is 1st
20% of cost of Each year for a Against business deducted in the YA
investment period of 5 YAs income which full
settlement fell
Withdrawal of incentive
Incentive is in the form of revenue deduction on the cost of investment over a period of 5 years.
Where the shares are disposed of within 5 years from the date of completion, the deduction
previously claimed shall be gross income in the YA of disposal.
Mutually exclusive with:
Reinvestment allowance or investment allowance
s 127 income tax exemption
Specific deduction provided under s 154
The foreign owned company is a related company of a locally owned company. Related
company means companies having at least 20% direct or indirect shareholding between
them.