Discover how we help our client in applying tax incentives to save our client tax?

01Tax incentives under Promotion of Investment Act 1986

Malaysia Government offers tax incentives to manufacturing companies engaged in the production of promoted activities or products under Promotion of Investments Act 1986.

There are two major tax incentives available:

1.     Pioneer Status (PS)

-          Income tax exemption of 70% to 100% of statutory income for 5 to 10 years.

2..     Investment Tax Allowances (ITA)

-          An allowance of 60% to 100% on qualifying capital expenditure incurred within 5 to 10 years.

Scenario

Mr. A would like to expand its production capacity in Singapore. So, he planning to setup a Sdn Bhd in Malaysia and carry out manufacturing of machining tools and parts.

Struggles

Mr. A heard there are tax incentives available to manufacturing company in Malaysia. However, he is not sure whether the company is eligible for the tax incentive, how to apply the tax incentives and when must the company submit the application? He also wondering whether there is any restriction on foreign shareholders?

Solution

KTP was engaged to assist Mr. A by checking and analyzing whether the company’s business activities are promoted activities or products. We have discussed with Mr. A on his investment strategy and advise him on the suitable type of incentives (pioneer status or investment tax allowance) to maximize the tax saving.

We liaise with MIDA officer throughout the application process and ensure the completeness of information and documents submitted.