2000 BUDGET ISSUE


 

11. Income Derived by Non-Residents from Filming Activities in Malaysia

Under the Income Tax (Exemption) (No 17) Order 1999, the Minister exempts non-resident companies, actors and film crews from payment of income tax in respect of income derived from filming activities in Malaysia commencing on or after 31st March, 1999. Such filming activities must have been approved by the Jawatankuasa Filem Asing, Ministry of Home Affairs, Malaysia.The order has effect from year of assessment 2000 et seq.


12. Qualifying Plant Allowances in respect of Computer Software

The Income Tax (Qualifying Plant Allowances) (Cost of Provision of Computer Software) Rules, 1999 provide that from year of assessment 1999, the initial and annual allowances on qualifying plant expenditure incurred on the cost of provision of computer software, either the software system or software package will be calculated at a rate of 20% and 40% respectively.

These Rules equate the rate of annual allowance on computer software, with that of computers and information technology (IT) equipment under the Income Tax (Qualifying Plant Allowances) (Computers and IT Equipment) Rules, 1998.


13. Incentive for Malaysian International Trading Company (MITC)

Pursuant to the Income Tax (Exemption)(No 16) Order 1999 which took effect from year of assessment 1999, the Ministry exempts a MITC from the payment of income tax up to an amount equivalent to 70% of the statutory income of the company for the basis period for a year of assessment arising from an increase of its export sales, determined in accordance with the following formula:-

 

 

B

A

x

--------

 

 

C

Where A is the statutory income of the company in relation to its export sales in that basis period;
  B is the increase of the export sales of the company in that basis period over the export sales in the immediately preceding basis period; and
  C is the total of the export sales of the company in that basis period.

"Malaysian International Trading Company" means a company approved by the Malaysia External Trade Development Corporation which has fulfilled certain conditions.

The exemption is granted for five (5) consecutive years of assessment beginning from the year of assessment in which MITC first qualified for the exemption.


14. Double Deduction for the Promotion of Export of Services

Pursuant to the Income Tax (Deductions for Promotion of Export of Services) Rules 1999, a company resident in Malaysia is allowed a double deduction for outgoings and expenses incurred by that company with respect to its business primarily and principally for the purpose of promoting the export of services.

The outgoings and expenses for this purpose are:-

  1. expenses incurred in respect of market research for the purpose of the export services;
  2. the cost of tender preparations for the purpose of the export of services;
  3. the cost of preparing technical information for the export of services;
  4. expense by way of fares in respect of travel to a country outside Malaysia by a representative of the company being a travel necessary for the promotion of export of services and actual expenses subject to a maximum of RM200 per day for accommodation and a maximum of RM100 per day for sustenance for the whole of the period outside Malaysia.
  5. expenses for the cost of maintaining sales offices overseas for the purpose of promoting the export of services; and
  6. actual expenses incurred in respect of publicity and advertisement in any media outside Malaysia for the promotion of export of services.

The original proposal was announced in the 1996 Budget and the above Rules have effect for year of assessment 1996 and subsequent years of assessment.


15. Rental Income from the Use of Malaysian Ships

In line with the tax exemption of statutory income derived from the letting out on charter of a Malaysian ship owned by a Malaysian resident on a voyage or time charter basis effective year of assessment 1999, as announced in the 1999 Budget, the Minister has further granted tax exemption on such income for years of assessment 1984 to 1998 through the Income Tax (Exemption)(No 29) Order 1998 (gazetted on 24th December, 1998).


16. Amendment to Lists of Promoted Activities and Products

The lists of promoted activities and products which are eligible for Pioneer Status and Investment Tax Allowance under the Promotion of Investment Act, 1986 in respect of various industries have been amended via the Promotion of Investments (Promoted Activities and Promoted Products for High Technology Companies) (Amendment) Order, 1999 and the Promotion of Investments (Promoted Activities and Promoted Products) (Amendment) Order, 1999.

Details of the promoted products/activities with effective dates of amendment are as follows:-


  Industries Products / Activities Effective Dates
a. High Technology Companies
  Aerospace Design or development and production or assembly of:

9th July 1998

    1. Aircraf
2. Aircraft equipment, components or accessories or parts of aircraft
 
    Modifications and / or conversion of aircraft

 

    Refurbishment or remanufacture of aircraft equipment, components or accessories or parts of aircraft  
b. Others  

 

  Manufacture of pulp, paper and paperboard Paperboard

29th September, 1995

  Manufacture of transport equipment, components and accessories Manufacture and assembly of aircraft

3rd September, 1998

    Manufacture of aircraft equipment, components accessories of part thereof  
    Ground support equipment for the aerospace industry  
  Supporting products / Services Specialised medical packaging

25th September, 1998

  Manufacture of electrical and electronic products and components and parts thereof Re-manufacturing of hard disk drives

19th May, 1993





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