pwc tax book 2012

2011/2012Malaysian Tax and Business Booklet

PP 13148/07/2012 (030409)

2011/2012MALAYSIAN

TAX AND BUSINESS BOOKLET

A quick reference guide outlining Malaysiantax legislation and other business information

The information provided in this booklet isbased on taxation laws and other legislation,

as well as current practices, includinglegislative proposals and measures contained

in the 2012 Malaysian Budgetannounced on 7 October 2011

This booklet incorporates in coloured italics the 2012 Malaysian Budgetproposals announced on 7 October 2011. These proposals will notbecome law until their enactment which is expected to be in early 2012and may be amended in the course of its passage through Parliament.

This booklet also incorporates in coloured italics some other proposalsannounced recently which have not been enacted to date.

This booklet is intended to provide a general guide to the subjectmatter and should not be regarded as a basis for ascertaining theliability to tax in specific circumstances. No responsibility for loss to anyperson acting or refraining from acting as a result of any material in thispublication can be accepted by PricewaterhouseCoopers. Recipientsshould not act on the basis of this publication without seekingprofessional advice.

© 2011 PricewaterhouseCoopers. All rights reserved.“PricewaterhouseCoopers” refers to the individual members of thePricewaterhouseCoopers organisation in Malaysia each of which is aseparate legal entity or, as the context requires, other member firms ofPricewaterhouseCoopers International Limited, each of which is a separateand independent legal entity.

Printed in Malaysia by SP-Muda Printing Sdn. Bhd. Tel: 03-62735893,62742463

CONTENTSTAX INFORMATION AGRICULTURE ALLOWANCES 23

Qualifying expenditure and rates 23INCOME TAX 1Scope of taxation 1 DOUBLE TAX TREATIES AND 23Basis of assessment 1 WITHHOLDING TAX RATES

PERSONAL INCOME TAX 2 TAX INCENTIVES 26Tax residence status of individuals 2Self assessment for individuals 2 INCOME EXEMPT FROM TAX 52Rates of tax 3Personal reliefs 4 REAL PROPERTY GAINS TAX 56Tax rebates 6

SERVICE TAX 57EMPLOYMENT INCOME 7 Basis of taxation 57Derivation 7 Rate of tax 58Exemption (short-term employees) 7 Taxable person/licensing 58Employees of regional operations 7 Taxable persons and taxable 58Types of employment income and 7 services

valuation Taxable person 58Benefits-in-kind (BIK) 9 Taxable services 61Collection of tax 11 Payment of service tax/taxable 61

periodCORPORATE INCOME TAX 11 Refund of service tax on doubtful 61Residence status 11 debts or “bad debts”Income tax rates 12Self assessment 13 SALES TAX 61Profit distribution 14 Basis of taxation 61Losses 15 Value of goods 62Group Relief 15 Rates of tax 62Business profits and deductions 16 Class of goods 62

Taxable goods 62CAPITAL ALLOWANCES 17 Goods exempted 62Industrial buildings 17 Licensing 63Plant and machinery 18 Exemption from licensing 63Accelerated capital allowances 20 Tax-free raw material 64Disposals 22 Drawback 64Controlled transfers 22 Payment of sales tax/taxable 64Disposals within 2 years 22 periodUnabsorbed capital allowances 22 Refund of sales tax on doubtful 64

debts or “bad debts”

CONTENTS

IMPORT DUTIES 64 EMPLOYEES’ PROVIDENT FUND 78Rates of duties 64 Scope of EPF 78Tariff rate quota 64 Rates of contributions 79Value of goods 65 Members' accounts 80Exemptions 65 Withdrawals 80Prohibition of imports 65

EMPLOYMENT GUIDELINES 81LICENSED MANUFACTURING 65 Guidelines for employment of 81WAREHOUSE expatriates

Employment of foreign workers 83FREE ZONE 65

EMPLOYES’ SOCIAL SECURITY 83FREE TRADE AGREEMENTS 66 FUND

EXPORT DUTIES 66 HUMAN RESOURCE 84DEVELOPMENT FUND

EXCISE DUTIES 66 Scope of HRDF 84Basis of taxation 66 Rate of contribution 85Rates of duties 66 Financial assistance 86Licensing 67Payment of duty 67 FOREIGN EQUITY 86Exports 67 GUIDELINES

Manufacturing sector 86STAMP DUTY 67 Other sectors 87Basis of taxation 67 Liberalisation measures 87Rates of duty 67Stamping 69 EXCHANGE CONTROL 88Penalty 69 Remittances abroad 88Relief/Exemption/Remission 69 Non-resident controlled companies 90

from stamp duty Purchase of immoveable properties 90by non- residents

OTHER BUSINESS INFORMATION Borrowings in foreign currency 90by a resident

ECONOMIC INDICATORS AND Borrowings in ringgit by a resident 91DIRECTIONS 72 Foreign currency accounts 91

Non-resident accounts 92FINANCIAL REPORTING 77 Exports from Malaysia 93

MSC Malaysia companies 93Approved Operational 93

Headquarters (OHQ)

IMPORTANT FILING DATES 93

1

INCOME TAX

Income Tax

Scope of taxation

Income tax in Malaysia is imposed on income accruing in or derived fromMalaysia with the following exception: A resident company carrying on a business of air/sea transport,

banking or insurance is assessable on a world income scope.However with effect from (w.e.f) 1 January 2003, income attributableto a Labuan business activity of the branch or subsidiary of aMalaysian bank in Labuan is not subject to tax under the Income TaxAct 1967 but is subject to the provisions of the Labuan BusinessActivity Tax Act 1990. From year of assessment 2008 (under theIncome Tax Act 1967), a Labuan company can make an irrevocableelection to be taxed under the Income Tax Act 1967 in respect of itsLabuan business activity.

In respect of Malaysian owned banks, insurance companies andtakaful companies, the profits of newly established overseasbranches or remittances of new overseas subsidiaries are taxexempt for 5 years, for applications received by Bank NegaraMalaysia not later than 31 December 2015.

Basis of assessment

Income is assessed on a current year basis from the year of assessment(YA) 2000. The year of assessment is the year coinciding with thecalendar year, for example, the YA 2012 is the year ending 31December 2012. The basis period for a business source is normally thefinancial year ending in that particular YA. For example the basis periodfor the YA 2012 for a business which closes its accounts on 30 June2012 is the financial year ending 30 June 2012. From YA 2001, all non-business sources of income of a company are also assessed on thebasis of the financial year.

W.e.f YA 2004, all income of persons other than a company, co-operative or trust body, are assessed on a calendar year basis. Also,from that year of assessment, cooperative societies and trust bodies areassessed in the same way as companies, i.e. on the basis of thefinancial year ending in that particular YA.

2

PERSONAL INCOME TAX

PERSONAL INCOME TAX

Tax residence status of individuals

An individual is regarded as tax resident if he meets any of thefollowing conditions, i.e. if he is

- in Malaysia for at least 182 days in a calendar year;- in Malaysia for a period of less than 182 days during the year

(“shorter period”) but that period is linked to a period of physicalpresence of 182 or more “consecutive” days in the following orpreceding year (“longer period”). Temporary absences fromMalaysia for certain specified reasons during the shorter orlonger period are counted as part of the consecutive days,provided that the individual is in Malaysia before and after eachtemporary absence;

- in Malaysia for 90 days or more during the year and, in any 3 ofthe 4 immediately preceding years, he was in Malaysia for atleast 90 days or was resident in Malaysia;

- resident for the year immediately following that year and for eachof the 3 immediately preceding years.

Self assessment for individuals

Self-assessment for individuals was implemented from YA 2004. Underthe Self Assessment System (SAS), the responsibility for correctlyassessing a person’s tax liability is transferred from the Inland RevenueBoard (IRB) to the taxpayer.

The prescribed Form B/BE/M for YA 2011 will be issued to individualtaxpayers in January 2012 or earlier and will be due for submission notlater than 30 April 2012 except for those who derive business incomesuch as sole proprietors and partnerships where the deadline for taxfiling is 30 June each year. The submission of the Form B/BE/M isdeemed to be a notice of assessment for which tax is due and payableon the same date as the filing deadline.

Under the SAS, the IRB monitors taxpayers’ compliance with the lawthrough field audits.

3

PERSONAL INCOME TAX

Rates of tax

Resident individualsYear of assessment 2012

ChargeableIncome

RM

Rate%

Tax PayableRM

On the firstOn the next

2,5002,500

01

025


5,00015,000 3

25450


20,00015,000 7

4751,050


35,00015,000 12

1,5251,800


50,00020,000 19

3,3253,800


70,00030,000 24

7,1257,200

On the firstAbove

100,000100,000 26

14,325

A qualified person (defined) who is a knowledge worker residing inIskandar Malaysia is taxed at the rate of 15% on income from anemployment with a designated company engaged in a qualified activityin that specified region. The employment must have commenced on orafter 24 October 2009 but not later than 31 December 2015.

An approved individual under the Returning Expert Programme who isa resident is taxed at the rate of 15% on income in respect of having orexercising employment with a person in Malaysia.

Non-resident individuals Year ofassessment

2012Types of income Rate (%)Public Entertainer’s professional income 15

Interest 15

4

PERSONAL INCOME TAX

Year ofassessment 2012

Types of income Rate (%)RoyaltySpecial classes of income:

10

- rental of moveable property 10- technical or management services fees* 10- payment for services rendered in connection with

use of property or installation or operation of anyplant, machinery or other apparatus purchased froma non-resident person

10

Dividends (single tier) ExemptDividends (franked) 25Business and employment income 26Income other than the above 10

* Only fees for technical or management services rendered inMalaysia are liable to tax.

Personal reliefs

Resident individuals Year ofassessment 2012

Types of relief RMSelf 9,000Disabled individual - additional relief for self 6,000Spouse 3,000Disabled spouse - additional spouse relief 3,500Child per child (below 18 years old) 1,000 per child (over 18 years old) receiving full-time

instruction of higher education in respect of:- diploma level and above in Malaysia- degree level and above outside Malaysia

4,0004,000

per child (over 18 years old) serving under articleof indentures in a trade or profession

4,000

5

PERSONAL INCOME TAX


RMPer physically / mentally disabled child 5,000

Physically / mentally disabled child (over 18 years ofage) receiving full-time instruction at institution ofhigher education or serving under articles ofindentures in a trade or profession

4,000

Life insurance premiums and EPF contributions 6,000*

Private Retirement Scheme contributions3,000*Deferred annuity scheme premium **

Insurance premiums for education or medical benefits 3,000*

Expenses on medical treatment, special needs orcarer expenses for parents (evidenced by medicalcertification)

5,000*

Medical expenses for self, spouse or child sufferingfrom a serious disease (including fees of up to RM500incurred by self, spouse or child for complete medicalexamination)

5,000*

Purchase of sports equipment 300*

Fee expended for any course of study up to tertiarylevel other than a degree at Masters or Doctoratelevel, undertaken for the purpose of acquiring law,accounting, Islamic financing, technical, vocational,industrial, scientific or technological skills orqualifications or any course of study for a degree atMasters or Doctorate level undertaken for the purposeof acquiring any skill or qualification

5,000*

* Maximum relief** RM1,000 relief for premiums on deferred annuity contracted on or after 1

January 2010 or additional premium payment on existing deferred annuityscheme from 1 January 2010 now forms part of the RM3,000 relief togetherwith contributions to Private Retirement Schemes

6

PERSONAL INCOME TAX


RMPurchase of supporting equipment for self (if adisabled person) or for disabled spouse, child orparent

5,000*

Cost incurred for the purchase of books, journals,magazines and other similar publications for thepurpose of enhancing knowledge

1,000*

Relief for purchase of personal computer (once every3 years)

3,000*

Broadband subscription 500*Deposit for child into the Skim Simpanan PendidikanNasional account established under PerbadananTabung Pendidikan Tinggi Nasional Act 1997(effective YA 2007)

3,000*

Relief on housing loan interest for the purchase of oneunit residential property where the Sale and PurchaseAgreement is executed between 10 March 2009 and31 December 2010 (given for 3 consecutive years)

10,000*

*Maximum relief

Tax rebates

Rebate for resident individualsIf resident individual’s chargeable income is less than RM35,000,rebate granted is deducted from tax charged and any excess is notrefundable.Amount of rebate- where husband and wife are jointly assessed:

- Individual 400- Wife/husband 400

- where husband and wife are separately assessed:- Amount available to each, as an individual 400

Rebate for Zakat, Fitrah or other Islamic religiousdues paid

Actual amountexpended

7

EMPLOYMENT INCOME

EMPLOYMENT INCOME

DerivationEmployment income is regarded as derived from Malaysia and subject toMalaysian tax where the employee:exercises an employment in Malaysia for any period of time;is on paid leave which is attributable to the exercise of an employment

in Malaysia;performs duties outside Malaysia which are incidental to his

employment in Malaysia;is employed to work on board an aircraft or ship operated by a person

who is resident in Malaysia.

Exemption (short-term employees)

Income of a non-resident from an employment in Malaysia is exempt:if the aggregate of the period or periods of employment in Malaysia

does not exceed 60 days in a calendar year; orwhere the total period of employment which overlaps 2 calendar years

does not exceed 60 days.

Employees of regional operations

Non-Malaysian citizens working in Operational Headquarters (OHQ) orRegional Offices (RO), or International Procurement Centre (IPC), orRegional Distribution Centre (RDC) status companies, who are based inMalaysia would be taxable on their income from the employment, on atime apportionment basis in accordance with the number of days spentin Malaysia.

Types of employment income and valuation

Benefit to employee Value to employeeAccommodation (unfurnished)employee/service

director- lower of 30% of cash remuneration *

or defined value of accommodationdirectors of controlled

companies- defined value of accommodation

* Cash remuneration does not include equity-based income.

8

EMPLOYMENT INCOME

Benefit to employee Value to employeeHotel accommodationemployee/service director - 3% of cash remuneration *

*Cash remuneration does not include equity-based income.

Allowances (e.g. entertainment,housing, etc.)

- total amount paid by employer

Petrol card/petrol/travel allowancesfor official duties or opt to be

taxed based on the annualprescribed value for petrolwithout any exemption

- exempted up to RM6,000 perannum **

Childcare subsidies /allowances - exempted up to RM2,400 perannum**

Parking fees/allowancesMeal allowancesSubsidies on interest on loans

totaling RM300,000 forhousing/ passenger motorvehicles and education

- fully exempted **

Income tax - amount paid by employerLeave passages - cost to employer of providing

leave passage to theemployee and members of hisimmediate family

- exemption is given for:(i) one overseas leave

passage up to amaximum of RM3,000 forfares only; or

(ii) 3 local leave passagesincluding fares, meals andaccommodation

** The above exemptions are not extended to directors of controlled companies,sole proprietors and partnerships.

9

EMPLOYMENT INCOME

Benefits-in-kind (BIK)

The IRB has issued Public Ruling 2/2004 and four addendums for thevaluation of benefits-in-kind provided to employees.Under the Ruling, the value of BIK provided for an employee may bedetermined by either of the following methods: the formula method, or the prescribed value method

Under the formula method, annual value of BIK provided to an employeeis computed using the following formula:

Cost of the asset provided as a benefit/amenity= Annual valuePrescribed life span of the asset

The prescribed life span for various benefits are as follows:

Items Prescribed averagelife span

YearsMotorcar 8Furnishings:

Air- conditioner 8Curtains & carpets 5Furniture 15Refrigerator 10Sewing machine 15

Kitchen utensils/equipment 6Entertainment and recreation:

Organ 10Piano 20Stereo set, TV, video recorder, CD/DVDplayer

7

Swimming pool (detachable), sauna 15Miscellaneous 5

10

EMPLOYMENT INCOME

Under the prescribed value method the following are some values ofBIK prescribed in the Ruling:

Value per yearHousehold furnishings, apparatus &appliancesa) Semi-furnished with furniture in the

lounge, dining room and bedroomRM840

b) Semi-furnished as above and withair-conditioners or carpets orcurtains

RM1,680

c) Fully furnished RM3,360d) Service charges and other bills (e.g.

water, electricity)Charges and bills paidby employer

Other benefits- Telephone (including mobile

telephone), telephone bills, pager,personal data assistant (PDA) andbroadband subscription

Fully exempted*

- Domestic servants RM4,800 per servant- Gardeners RM3,600 per

gardener- Recreational club membership Membership

subscription paid byemployer

Employers’ goods provided free or at adiscount

Discount up toRM1,000 is taxexempt

Employers’ own services provided full orat a discount

Fully exempted

Maternity expenses & traditionalmedicines

Fully exempted

* The above exemptions are not extended to directors of controlled companies,sole proprietors and partnerships.

11

CORPORATE INCOME TAX

Standard rates for motorcar and fuel provided:

Cost of car(when new)

RM

Annual prescribedbenefit

of motorcarRM

Annualprescribed

benefit of fuel*RM

Up to 50,000 1,200 60050,001 – 75,000 2,400 90075,001 – 100,000 3,600 1,200

100,001 – 150,000 5,000 1,500150,001 – 200,000 7,000 1,800200,001 – 250,000 9,000 2,100250,001 – 350,000 15,000 2,400350,001 – 500,000 21,250 2,700500,001 and above 25,000 3,000

* Employee is given a choice to determine fuel benefit based on annual prescribedrates or exemption available for petrol usage.

Annual value of driver provided: RM7,200

Collection of tax

Taxes are collected from employees through compulsory monthlydeductions from salary under the Monthly Tax Deduction (MTD)system.

Individuals receiving non-employment income are required to pay bycompulsory bi-monthly installments.


Residence status

A company is tax resident in Malaysia if its management and control isexercised in Malaysia. Management and control is normally consideredto be exercised at the place where directors’ meetings are heldconcerning management and control of the company.

12


Income tax rates YA 2012%

Resident companiesAll income 25

With effect from YA 2004, a resident company with paid-up capital ofRM2.5 million or less, is taxed at the following rates:

Chargeable Income RM YA 2012%

On the first 500,000 20In excess of 500,000 25

With effect from YA 2009, certain specified conditions must be met toqualify for the above rates.

Non-resident companiesRoyalties 10Rental of moveable properties 10Technical or management service fees 10*Interest 15Dividends – single tier Exempt

– franked 25Business 25Income other than the above 10

* Only fees for technical or management services rendered in Malaysia areliable to tax.

Where the recipient is resident in a country which has a double taxtreaty with Malaysia, the tax rates for specific sources of income maybe reduced.

Interest paid to a non-resident by a bank or a finance company inMalaysia or on approved loans is exempt from tax. An approved loanis a loan granted to or guaranteed by the Malaysian government.

13


Self assessment

Self assessment for companies came into effect from YA 2001.

Public RulingsTo facilitate compliance with the SAS, the Director General of InlandRevenue is empowered by provisions in the Income Tax Act, 1967 toissue Public Rulings. Public Rulings are binding on the DirectorGeneral of Inland Revenue.

All the Public Rulings can be downloaded from the IRB’s website atwww.hasil.gov.my .

The IRB issued the following Public Rulings/ Addendums in 2011 (upto 7 October):

Ruling Subject Date (2011)1/2011 Taxation of Malaysian Employees

Seconded Overseas7 February

2/2011 Interest Expense and InterestRestriction

7 February

3/2011 Investment Holding Company 10 March4/2011 Income From Letting of Real Property 10 March5/2011 Residence Status of Companies And

Bodies of Persons16 May

6/2011 Residence Status of Individuals 16 May7/2011 Notification of Change in Accounting

Period of a Company / Trust Body /Co-operative Society

23 August

Advance rulingsW.e.f 1 January 2007, a taxpayer may request for an advance rulingfrom the Director General of Inland Revenue. The Director Generalmay make an advance ruling on how any provision of the law appliesto an arrangement described in the application. An advance ruling isonly applicable to the person making the application.

Submission of returns and assessmentUnder the self-assessment system for companies, returns are requiredto be submitted within 7 months from the date of closing of accounts.

http://www.hasil.gov.my/

14


Particulars required to be specified in the return include the amount ofchargeable income and tax payable by the company.

On submission of the return, an assessment is deemed to have beenmade on the company. The return is deemed to be a notice ofassessment, which is deemed to be served on the company on theday that it is submitted.

Collection of taxPayment of tax by 12 equal monthly installments has to be made,beginning from the second month of the company’s basis period(financial year). An estimate of tax payable for the year of assessmentmust be furnished to the Director General one month before thebeginning of the basis period. From YA 2008, a newly establishedcompany with paid-up capital of RM2,500,000 and less is exemptedfrom this requirement for 2 years, beginning from the YA in which thecompany commences operation subject to certain conditions. FromYA 2011, a company commencing operations in a year ofassessment, is not required to furnish estimates of tax payable ormake installment payments if the basis period for the year ofassessment in which the company commences operations is lessthan 6 months.

The balance of tax payable by a company is due to be paid on the lastday by which the return must be submitted (see “Submission of returnsand assessment” above).

In general, tax on all income other than income from a business oremployment source, or dividends received by non-resident companiesare collected by means of withholding tax. The withholding tax ispayable within one month of crediting or paying the non-residentcompany.

Profit distribution

From YA 2008, the imputation system of taxation was replaced by asingle-tier system of taxation which came into effect from 1 January2008.

Under this system, tax on a company’s profits is a final tax anddividends are exempt in the hands of shareholders. Companies are no

15


longer required to deduct tax at source from dividends distributed toshareholders. A transition period of 6 years is provided forimplementation of the single-tier system. All companies will move to thesingle-tier tax system on 1 January 2014 even though they may still haveunutilized franking-credits as at 31 December 2013.

Losses

Business losses can be set off against income from all sources in thecurrent year. Any unutilised losses can be carried forward indefinitely tobe utilised against income from any business source. However, from YA2006, companies are not allowed to deduct a loss brought forward froma prior year against income of a particular year of assessment if theshareholders of the company at the beginning of the basis period for thatyear of assessment are not substantially the same as the shareholdersof the company at the end of the basis period for the (prior) year ofassessment in which the loss was initially ascertained. The Ministry ofFinance has issued guidelines which state that the above rule restrictingcarry-forward losses based on the shareholder continuity test would onlyapply to dormant companies.

Group ReliefFrom YA 2006 group relief is available for all locally incorporatedresident companies provided that the conditions for eligibility are met. Acompany that qualifies may surrender a maximum of 50% of its adjustedloss for a year of assessment to one or more related companies. Witheffect from YA 2009, the maximum percentage of loss that can besurrendered is increased to 70%.

To be eligible for group relief, claimant & surrendering companies mustmeet the following conditions:Must be resident and incorporated in Malaysia.

16


Each has a paid-up capital of ordinary shares exceeding RM2.5 millionat the beginning of the basis period.

Both companies must have same (twelve-month) accounting period.They are “related companies” as defined in the law, and must be

“related” throughout the relevant basis period as well as the 12 monthspreceding that basis period.

Companies currently enjoying certain incentives such as pioneerstatus, ITA, reinvestment allowance etc. are not eligible.

Business profits and deductions

Business profits are computed on the basis of normal accountingprinciples as modified by certain tax adjustments.

Generally, deduction is allowed for all outgoings and expenses whollyand exclusively incurred in the production of income.

Deductions which are specifically disallowed include:Domestic or private expensesIncome tax or similar taxesPreliminary or pre-operating expensesCapital expenditureDepreciation and amortisationGeneral provisionsInterest expenses attributable to non-business investmentsLease rentals for passenger cars exceeding RM50,000 or

RM100,000 per car, the latter amount being applicable tovehicles costing RM150,000 or less which have not been usedprior to the rental

Employer’s contributions to unapproved pension, provident orsaving schemes

Employer’s contributions to approved schemes in excess of 19%of employee’s remuneration

Non-approved donations50% of entertainment expenses with certain exceptionsEmployee’s leave passages

17

CAPITAL ALLOWANCES

CAPITAL ALLOWANCES

Industrial buildingsQualifying expenditure (QE)

QE for purposes of industrial building allowance is the cost ofconstruction of buildings or structures which are used as industrialbuildings. With effect from YA 2005, QE in the case of a purchasedbuilding is the purchase price.

Types of industrial buildingsAn industrial building includes a building used:- as a factory- as a dock, wharf, jetty- as a warehouse- for working a farm- for working a mine- for supplying water or electricity, or telecommunication facilities- for approved research and approved training- as a private hospital, maternity home and nursing home which is

licensed under the law- as an old folks’ care centre approved by the Social Welfare

Department- for a school or an educational institution approved by the Minister of

Education- for technical or vocational training approved by the Minister of

Finance- as a hotel, and that hotel is registered with the Ministry of Tourism

Other qualifying expenditure

Expenditure on construction or purchase of the following, includingexpenditure on extension or improvement of ancillary structures (w.e.fYA 2001)- an airport- a motor racing circuit approved by the Finance Minister

An office building will qualify for allowances where it physically formspart of an industrial building and its cost does not exceed 10% of thetotal building cost.

18

CAPITAL ALLOWANCES

Owners of new buildings occupied by MSC Malaysia status companiesin Cyberjaya are eligible for Industrial Building Allowance for a periodof 10 years.

The Finance Minister may prescribe a building that is used for thepurpose of a person’s business as an industrial building, and the rateto be allowed.

Types and rates of allowanceInitial

Allowance%

AnnualAllowance

%Industrial building, whetherconstructed orpurchased (w.e.f YA 2002)

10 3

Where annual allowance (AA) has been claimed for years prior to YA2002 in respect of a building, and that allowance was calculated basedon a permitted fraction* (PF), AA for that building for YA 2002 andsubsequent years is calculated as follows:

3% x QE orPF x QE, if PF is greater than 3%

*PF =1

Unexpired life

where “unexpired life” is the overall life of 50 years reduced bythe number of expired years commencing from the first year inwhich the building was completed.

Plant and machinery

Qualifying expenditure

Qualifying plant expenditure includes:- cost of assets used in a business, such as plant and machinery,

office equipment, furniture and fittings, motor vehicles, etc.- the cost of construction and installation of plant and machinery

(Where fees are paid to a non-resident in connection with installationof plant and machinery, withholding tax on that fees must be paid toqualify.)

19

CAPITAL ALLOWANCES

- expenditure on fish ponds, animal pens, cages and other structuresused for pastoral pursuits.

Types of qualifying plant and rates of allowances

Year of assessment2012

Annual allowance%

Heavy machinery 20General plant and machinery 14Furniture and fixtures 10Office equipment 10Motor vehicles 20*

* Restriction on maximum qualifying expenditure:

MaximumRM

New vehicles purchased on or after 28October 2000 where on-the-road price isRM150,000 or less

100,000

Vehicles other than the above 50,000

- Initial allowance of 20% is granted in the year the expenditure isincurred and the asset is in use for the purpose of the business.

- Annual allowance at the prescribed rates calculated on cost is givenfor every year during which the asset is in use for the purpose of thebusiness, and is so used at the end of that year.

- Claimant of initial and annual allowances must be owner of theasset.

- Expenditure on assets with life spans of not more than 2 years isallowed on a replacement basis.

20

CAPITAL ALLOWANCES

Accelerated capital allowancesThe following types of assets qualify for accelerated rates of initial orannual allowance:

InitialAllowance

%

AnnualAllowance

%Industrial buildings

Public roads and ancillary structureswhich expenditure is recoverablethrough toll collection

10 6

Buildings for the provision of child carefacilities

- 10

Buildings used as living accommodationfor employees by a person engaged ina manufacturing, hotel or tourismbusiness or approved service project - 10

Buildings used as a school or aneducational institution approved bythe Minister of Education or anyrelevant authority or for the purposesof industrial, technical or vocationaltraining approved by the Minister

- 10

Building used as a warehouse forstorage of goods for export or forstorage of imported goods to beprocessed and distributed or re-exported

- 10

Buildings purchased or constructed by aBioNexus status company for use inits approved business or expansionproject

- 10

Buildings constructed under anagreement with the government on abuild-lease-transfer basis, approvedby the Minister of Finance

10 6

Plant and machinery (P & M)Computer and information technologyassets and computer software 20 80*

* For YA 2009 to YA 2013

21

CAPITAL ALLOWANCES

InitialAllowance

%

AnnualAllowance

%Environmental protection equipment 40 20Buses using natural gas 40 20Equipment providing natural gas refueling

at natural gas refueling outlet 40 20P & M for building and construction 30 10-20P & M for extraction of timber 60 10-20Tin mining equipment and machinery 60 10-20P & M of a manufacturing company used

for recycling or processing of wastes 40 20P & M of manufacturing or food

processing companies engaged inproduction of promoted products (onlyavailable on expiry of reinvestmentallowance)

40 20

P & M of a manufacturing company usedexclusively for recycling wastes orfurther processing of wastes into afinished product

40 20

P & M of agriculture/plantation companies 20 40P & M for maintaining the quality of power

supply20 40

Moulds used in the production of IndustrialBuilding System Components 40 20

Small -value assets of less than RM1,000 each are eligible for 100%capital allowances. The total value of such assets are capped atRM10,000. This restriction to RM10,000 will not apply w.e.f YA 2009 toSMEs (as defined).

Expenditure on installation of security control equipment and vehiclesurveillance equipment can be fully written off within 1 year subject tocertain conditions. (YA2008 to YA2012 only).

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CAPITAL ALLOWANCES

P & M acquired between 10 March 2009 and 31 December 2010 - QEcan be claimed within 2 years (20% IA and 40% AA).

Qualifying expenses on renovation and refurbishment of businesspremises between 10 March 2009 and 31 December 2010 (limited toRM100,000) to be claimed within 2 years (50% each year).

Disposals

Balancing adjustments (allowance/charge) will arise on the disposal ofassets on which capital allowances have been claimed. The balancingadjustment is the difference between the tax written down value and thedisposal proceeds, except that balancing charge is restricted to theamount of allowances previously claimed.

In the case of an industrial building, no adjustments will be made if thebuilding is disposed of after the 50th year for expenditure incurred priorto YA 2005.

Controlled transfersNo balancing adjustments will be made where assets are transferredbetween persons/companies under common control. In such cases, theactual consideration for the transfer of the asset is disregarded and thedisposer/acquirer is deemed to have disposed of/acquired the asset atthe tax written down value.

Disposals within 2 years

Capital allowances which have been previously granted may be clawedback if the asset is sold within 2 years of purchase unless there iscommercial justification for the disposal.

Unabsorbed capital allowancesCapital allowances are granted in respect of a business source only andany unabsorbed allowances can be carried forward indefinitely to beutilised against income from the same business source.

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AGRICULTURE ALLOWANCES

However, effective from YA 2006, unabsorbed capital allowancesbrought forward from a prior year are not allowed to be deducted againstadjusted income of a particular year of assessment if the shareholders ofthe company at the beginning of the basis period for that year ofassessment are not substantially the same as the shareholders of thecompany at the end of the basis period for the (prior) year of assessmentin which the capital allowances were ascertained. The Ministry ofFinance has issued guidelines which state that the rule restricting carry-forward capital allowances based on the shareholder continuity testwould only apply to dormant companies.

AGRICULTURE ALLOWANCESQualifying expenditure and rates

Types of qualifying agriculture expenditure (QAE) Rates%

Clearing and preparation of land 50Planting (but not replanting) of crops on cleared land 50Construction of a road or bridge on a farm 50Building used as living accommodation or for welfare of aperson employed in working a farm 20Any other building 10

DOUBLE TAX TREATIES AND WITHHOLDING TAX RATES

The following countries have concluded double tax treaties withMalaysia:

Rate of withholding tax %Treaty countries Interest Royalties Technical

FeesAlbania 10 or Nil 10 10Australia 15 or Nil 10 or Nil NilAustria 15 or Nil 10 10

24


Rate of withholding tax%Treaty countries Interest Royalties Technical

FeesBahrain 5 or Nil 8 10Bangladesh 15 or Nil 10 or Nil 10Belgium 10 or Nil 10 10Bosnia & Herzegovina * 10 or Nil 8 10Brunei 10 or Nil 10 10Canada 15 or Nil 10 or Nil 10China, People’s Republic 10 or Nil 10 10Chile 15 10 5Croatia 10 or Nil 10 10Czech Republic 12 or Nil 10 10Denmark 15 or Nil 10 or Nil 10Egypt 15 or Nil 10 10Fiji 15 or Nil 10 10Finland 15 or Nil 10 or Nil 10France 15 or Nil 10 or Nil 10Germany (new agreement) 10 or Nil 7 or Nil 7Hungary 15 or Nil 10 10India (new agreement) 10 or Nil 10 10Indonesia 10 or Nil 10 10Iran 15 or Nil 10 10Ireland 10 or Nil 8 10Italy 15 or Nil 10 or Nil 10Japan 10 or Nil 10 10Jordan 15 or Nil 10 10Kazakhstan 10 or Nil 10 10Korea Republic 15 or Nil 10 or Nil 10Kyrgyz Republic 10 or Nil 10 10Kuwait 10 or Nil 10 10Laos 10 or Nil 10 10Lebanese Republic 10 or Nil 8 10Luxembourg 10 or Nil 8 8Malta 15 or Nil 10 10

25



FeesMauritius 15 or Nil 10 10Morocco 10 or Nil 10 10Mongolia 10 or Nil 10 10Myanmar 10 or Nil 10 10Namibia 10 or Nil 5 5Netherlands 10 or Nil 8 or Nil 8New Zealand 15 or Nil 10 or Nil 10Norway 15 or Nil 10 or Nil 10Pakistan 15 or Nil 10 or Nil 10Papua New Guinea 15 or Nil 10 10Philippines 15 or Nil 10 or Nil 10Poland 15 or Nil 10 or Nil 10Qatar 5 or Nil 8 8Romania 15 or Nil 10 or Nil 10Russian Federation 15 or Nil 10 10San Marino 10 or Nil 10 10Saudi Arabia (fullagreement)

5 or Nil 8 8

Senegal* 10 or Nil 10 10Seychelles Republic 10 or Nil 10 10Singapore 10 or Nil 8 5Sri Lanka 10 or Nil 10 10South Africa 10 or Nil 5 5Spain 10 or Nil 7 5Sudan 10 or Nil 10 10Sweden 10 or Nil 8 8Switzerland 10 or Nil 10 or Nil 10Syria 10 or Nil 10 10Thailand 15 or Nil 10 or Nil 10Turkey 15 or Nil 10 10Turkmenistan 10 or Nil 10 Nil

26

TAX INCENTIVES


FeesUnited Arab Emirates 5 or Nil 10 10United Kingdom 10 or Nil 8 8Uzbekistan 10 or Nil 10 10Venezuela 15 or Nil 10 10Vietnam 10 or Nil 10 10Zimbabwe * 10 or Nil 10 10

* Pending ratification

There is no withholding tax on dividends paid by Malaysian companies.

With effect from 21 September 2002, only fees for technical andmanagement services rendered in Malaysia are liable to Malaysianincome tax.

There is a restricted double tax treaty with Argentina and with the UnitedStates of America which deals with the taxation of air and sea transportoperations in international traffic.

TAX INCENTIVESMalaysia offers a wide range of tax incentives ranging from tax holidays,allowances based on capital expenditure and enhanced tax deductions.These tax incentives are generally available for tax resident companies.

A. MANUFACTURING / SERVICES / TRADING SECTOR

Pioneer statusEligibility:Companies intending to engage in a promoted activity or to produce apromoted product in the manufacturing, food processing, agricultural,hotel, tourism or other industrial or commercial sectors. TAX INCEN

27

TAX INCENTIVES

Incentive:Tax exemption on 70% of statutory income for 5 years from production

day.Tax exempt dividends may be paid out of exempt income.

A Pioneer Status company which intends to undertake reinvestmentbefore expiry of its pioneer status may opt for reinvestment allowance,provided it surrenders its pioneer status.

Investment tax allowance (ITA)

Eligibility:Companies intending to engage in a promoted activity or to produce apromoted product in the manufacturing, food processing, agricultural,hotel, tourism or other industrial or commercial sectors.

ITA is an alternative to pioneer status. ITA is deemed not to be given ifthe asset is disposed of within 2 years from the date of acquisition.

Incentive:60% of qualifying capital expenditure (QCE) incurred within 5 years of

approval date to be offset against 70% of statutory income for eachyear of assessment until allowance is fully allowed.

Tax exempt dividends may be paid out of exempt income.

A company which intends to undertake reinvestment before expiry of itsITA status may opt for reinvestment allowance, provided it surrenders itsITA.

Enhanced pioneer status and ITA

(a) Approved projects located in promoted areas such asKelantan, Terengganu, Pahang, the district of Mersing inJohor, Perlis, Sabah and Sarawak (applications receivedby the Malaysian Investment Development Authority(MIDA) by 31 December 2010).

Manufacturing activities relocated to promoted areas(applications by 31 December 2010).

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TAX INCENTIVES

Hotel and tourism projects in promoted areas (applicationsfrom 13 September 2003 to 31 December 2010). Alsoavailable for hotel operators that undertake new investments in4 and 5 star hotels in Sabah and Sarawak (applications from30 August 2008 to 31 December 2013) and PeninsularMalaysia (applications from 8 October 2011 to 31 December2013).

Project of national and strategic importance involving heavycapital investment extensive linkages and which has significantimpact on the Malaysian economy.

High technology companies qualifying for MSC Malaysiastatus.

Companies producing intermediate goods under approvedschemes or qualifying automotive component modules, orparticipating in strategic knowledge intensive activities.

Companies investing in new laboratories of recognisedinternational standard for testing of medical devices(applications from 8 September 2007 to 31 December 2012)

Enterprises providing integrated logistics, marketing supportservices and utility services.

Pioneer status ITA- Tax exemption on 100%

of statutory income for 5years (for projects locatedin promoted areas).

- 100% of QCE incurredwithin 5 years to be offsetagainst 100% of statutoryincome (for projects locatedin promoted areas).

(b) Companies upgrading an existing testing laboratory for testingmedical devices. (applications from 8 September 2007 to 31December 2012)

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TAX INCENTIVES

Pioneer status ITA- None - 60% of QCE incurred

within 5 years to be offsetagainst 100% of statutoryincome

(c) Companies providing technical or vocational training;Private higher education institutions providing qualifying

science courses (applications after 1 October 2005)

Pioneer status ITA- None - 100% of QCE incurred

within 10 years to be offsetagainst 70% of statutory income

(d) Companies producing specialised machinery and equipment


of statutory income for 5years (may be extendedfor 5 more years)

- 100% of QCE incurred within 5years to be offset against 100%of statutory income

(e) Companies reinvesting in:production of machinery and equipment, including heavy or

specialised machinery, equipment and machine tools.cold chain facilities and services for perishable agricultural

produce.

(i) Companies located outside promoted areas:


on increased statutoryincome for 5 years

- 60% on additional QCEincurred within 5 years to beoffset against 70% ofstatutory income

30

TAX INCENTIVES

(ii) Companies located in promoted areas (applications by 31December 2010):



- 100% on additional QCEwithin 5 years to be offsetagainst 100% of statutoryincome

(f) Companies with halal certification from JAKIM and other qualitycertification producing halal food (applications from 11September 2004)

Pioneer status ITA- None - 100% of QCE incurred within

5 years to be offset against100% of statutory income

(g) Providers of industrial design services (applications from 8October 2011 until 31 December 2013) – subject to certainconditions

Pioneer status ITA- Tax exemption on 70% of

statutory income for 5years

- None

Special incentive scheme

Eligibility:A company incorporated and resident in Malaysia, deriving income froman “approved business” which is approved by the Minister of Financeunder the special incentive scheme.

Incentive: Income tax exemption of 70% of statutory income (or any

other rate prescribed by the Minister) of the approvedbusiness; or Income tax exemption on statutory income ofthe approved business by way of an allowance (rate ofallowance to be determined by the Minister)

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TAX INCENTIVES

Exempt dividends may be paid out of exempt income

Allowance for increased exportEligibility:Resident company engaged in manufacturing or agriculture, which hasexported manufactured products or agricultural produce, or services.

Incentive:Allowance at the following rates, deductible up to 70% of statutory

income:% of value

added*Allowance (% of

increased exports)Manufactured products 30 10

50 15Agricultural produce - 10Designated “Qualifying Services” - 50*Value added means ex-factory price less total cost of raw materials.

Unabsorbed allowance can be carried forward.Tax exempt dividends may be paid out of exempt income.

Enhanced incentive:Companies engaged in manufacturing or agricultural activities qualify forenhanced allowance rates of:30% of increased export value where significant increase in exports is

achieved;50% of increased export value if new markets are penetrated; or100% of increased export value if the company is awarded the “Export

Excellence Award” by the Ministry of International Trade and Industry.For services, effective from YA 2008 the incentive of 100% of increasedexport value is extended to recipients of “Export Excellence Award(Services) and Brand Excellence Award”.

Approved services project (ASP)Eligibility:Resident companies in the communication, utilities and transportationservices subsectors which have incurred QCE on ASP. An ASP isdefined as a project in any of the above services subsectors, which has

32

TAX INCENTIVES

been approved by the Minister of Finance.

Incentive:Investment allowance of 60% of QCE incurred within 5 years to be

offset against 70% of statutory income.Tax exempt dividends may be paid out of exempt income.An alternative incentive is exemption from income tax under section

127 of the Income Tax Act 1967 of up to 70% of statutory income for 5years.

Industrial building allowance for buildings constructed or purchased forASP purposes.

Exemption from customs duty and sales tax on imported material andmachinery which is not available locally, or, if locally purchased, suchitems must be used as direct inputs in ASP.

Enhanced relief is available for the following projects:Projects located in Sabah, Sarawak and Eastern Corridor of

Peninsular Malaysia (applications by 31 December 2010).

Investment allowance Section 127 exemption- 80% of QCE to be offset against

85% of statutory income- 85% of statutory income for

5 years

Projects of national and strategic importance.Investment allowance Section 127 exemption- 100% of QCE to be offset

against 100% of statutoryincome

- 100% of statutory incomefor 10 years

Last mile network facilities provider- Investment allowance of 100% of QCE on broadband infrastructure

can be used to offset 70% of statutory income (effective until 31December 2012).

Food production

Eligibility:Companies that invest in its subsidiary company which is engaged inapproved food production activities.

33

TAX INCENTIVES

Incentive:Tax deduction equivalent to the amount of investment made in thatsubsidiary.

Eligibility:Subsidiary company engaged in approved food production activities.

Incentive:100% tax exemption on statutory income for 10 years for new project or5 years for expansion project (Applications by 31 December 2015 to theMinistry of Agriculture and Agro-based Industry).

Reinvestment allowance

Eligibility:A Malaysian resident company which has been in operation for not lessthan 36 months (12 months prior to YA 2009) and has incurred QCE ona factory, plant and machinery used in Malaysia for the purpose of aqualifying project.

The following entities are also eligible:an agro-based co-operative societyan Area, National or State farmer’s or State fisherman’s association

A “qualifying project” means:(a) a project in expanding, modernizing, automating an existing

business of manufacturing a product or diversifying an existingbusiness into a related product; or

(b) an agriculture project in expanding, modernizing or diversifying acultivation and farming business.

Incentive:Allowance of 60% of QCE to be offset against 70% of statutory income

for 15 years beginning from the year of assessment the reinvestmentallowance is first claimed.

Tax exempt dividends may be paid out of exempt income.

34

TAX INCENTIVES

Allowance of 60% of QCE to be offset against 100% of statutory income:- for companies with projects located within the Federal Territory of

Labuan, Perlis, Sabah, Sarawak, Kelantan, Terengganu, Pahang,and the Mersing district in Johor up to year of assessment 2011; or

- where the qualifying project has achieved the level of productivityas prescribed by the Minister of Finance.

B. BIOTECHNOLOGY INDUSTRYEligibility:Company undertaking biotechnology activity with approved bionexusstatus from Malaysian Biotechnology Corporation Sdn Bhd.

Incentive:100% exemption for 10 years from the first year in which the company

derives profit; or ITA of 100% on QCE incurred within a period of 5years.

Tax exempt dividends may be paid out of exempt income.Import duty and sales tax exemption on raw materials/components and

machinery/equipment.Effective 2 September 2006, the following additional incentives areavailable:Income tax exemption on statutory income derived from an approved

business, determined by a specific formula, for 10 years upon expiry oftax exempt period (i.e. effectively taxed at 20%).

Stamp duty and real property gains tax exemptions given to aBioNexus company undertaking merger and acquisition with abiotechnology company.

Industrial building allowance over 10 years given on buildings usedsolely for approved business or expansion project of a BioNexuscompany.

Eligibility:Company or individual investing in a BioNexus company.

Incentive:Tax deduction equivalent to the total investment in seed capital and earlystage financing (w.e.f. 1 May 2005).

35

TAX INCENTIVES

C. FINANCIAL SERVICES SECTOR

Closed-end fund companyEligibility:Public limited company incorporated in Malaysia and approved by theSecurities Commission (SC), engaged wholly in investment of funds insecurities.

Incentive:Exemption from income tax on gains from realisation of investments

and interest income.Deduction of up to 25% of certain “permitted expenses”.Tax exempt dividends may be paid out of exempt income.

Foreign fund management company

Eligibility:Company incorporated in Malaysia and licensed under the relevant Act,providing fund management services to foreign investors, or to bothforeign and local investors.

Incentive:Chargeable income from a source relating to the provision ofmanagement services to foreign investors only is taxed at 10%. Taxexempt dividends may be paid to shareholders.

Insurance and trading of sukuk

Eligibility:Holder of relevant licence and registered person under the CapitalMarkets and Services Act 2007, undertaking activities of arranging,underwriting and distributing of or dealing in non-Ringgit sukuk.The sukuk must originate from Malaysia and be issued or guaranteed bythe Malaysian Government or approved by the SC or the LabuanFinancial Services Authority.

Incentive:Exemption from income tax on statutory income from the above activities(YA 2009 to YA 2011). Extended for another 3 years (YA 2012 to 2014).

36

TAX INCENTIVES

Islamic Banking and Takaful BusinessIncentive:Income tax exemption from YA 2007 to 2016 for:Islamic banks and Islamic banking units licensed under the Islamic

Banking Act 1983 on income from Islamic banking business conductedin international currencies.

Takaful companies and takaful units licensed under the Takaful Act1984 on income from takaful business conducted in internationalcurrencies.

Islamic fund managementEligibility:Malaysian fund management company managing funds of local andforeign investors established under the Syariah principles. Funds mustbe approved by the SC.

Incentive:Income tax exemption on statutory income from a business of providingfund management services to local investors (from YA 2008) and foreigninvestors (from YA 2007) until YA 2016.

Islamic securitiesIncentive:Deduction for expenditure incurred in the issuance of Islamic securitiesapproved by the SC (YA 2011 to YA 2015) or the Labuan FinancialServices Authority (YA 2011 to YA 2015 ). Extended to include issuanceof Islamic securities based on Wakalah principle (YA 2012 to YA 2015).

Islamic stock broking company

Incentive:Establishment expenditure incurred prior to commencement of anIslamic stock broking business is allowed as a deduction provided thecompany commences business within 2 years from the date of approval.

Applications received by the SC from 2 September 2006 to 31December 2015.

37

TAX INCENTIVES

Listing of foreign companies and foreign products in BursaMalaysiaEligibility:An approved person who is a member of the due diligence workinggroup established under the Guidelines on Due Diligence Conduct ForCorporate Proposal as issued by the SC.

Incentive:Income tax exemption on statutory income from advisory fees relating tostructuring and listing of a foreign corporation or foreign investmentproduct on an approved stock exchange (YA 2009 to YA 2013).

Real Estate Investment Trust (REIT)/Property Trust Fund(PTF)Eligibility:Must be approved by the SC.

Incentive:Exemption from stamp duty on instrument of transfer of real property

to REIT/PTF.Exempted from tax on all income if at least 90% of total income is

distributed.Dividends paid by REIT listed on Bursa Malaysia received by non-

corporate/ foreign institutional investors are subject to final withholdingtax of 10% from 1 January 2009 till 31 December 2011. Extended foranother 5 years from 1 January 2012 till 31 December 2016.

Deduction for consultancy, legal and valuation service fees incurred inthe establishment of REIT.

Effective from YA 2008, disposals of buildings from companies to REITsare not subject to balancing charge and REITS are eligible to claim thebalance of unclaimed industrial building allowance of the disposers

Special purpose vehicle (SPV) for Islamic financing

Eligibility:Companies established under the Companies Act 1965 or the Labuan

38

TAX INCENTIVES

Companies Act 1990 electing to be taxed under the Income Tax Act1967 solely for the purpose of complying with Syariah requirement in theissuance of Islamic securities.

Incentive:SPV -not subject to income tax and not required to comply with

administrative procedures under the Income Tax Act 1967.Company establishing the SPV - deduction for cost of issuance of

Islamic bonds. Company is deemedto be the recipient of the SPV’sincome and taxed accordingly.

Venture capital industry1.Venture capital company (VCC)

Eligibility:Investment in a venture company (VC) involved in promoted products oractivities, which is not the VCC’s related company at the point of firstinvestment.

Incentive:(i) Exemption on statutory income from all sources, other than interest

income from savings or fixed deposits and profits from Syariah -based deposits for the following duration:

ExemptPeriod

Conditions

10 years - at least 70% of invested funds is invested in VC; orat least 50% of invested funds is invested in VC in

the form of seed capital5 years - at least 30% of invested funds is invested in VC in

the form of seed capital, start-up or early stagefinancing; and

- applications between 30 August 2008 and 31December 2013.

(ii) Deduction of the value of investment made in a VC

39

TAX INCENTIVES

2.Individual investor (with a business source)

Eligibility:Funds must be invested in the early stage financing of VCs.

IncentiveDeduction of the value of investment made in a VC.

3. Venture capital management company

Incentive:Tax exemption on income from profit-sharing agreement with a VCC.

Treasury Management Centre (TMC)Incentive:70% tax exemption on statutory income arising from qualifying

treasury services rendered to related companies for 5 years.Withholding tax exemption on interest payments on borrowings from

overseas used for qualifying activities.Stamp duty exemption on loan and service agreements for qualifying

activities.Expatriates are taxed only on the portion of their chargeable income

attributable to the number of days they are in Malaysia.

Applications received by MIDA from 8 October 2011 until 31 December2016.

Kuala Lumpur International Financial District (KLIFD)

Incentive:100% tax exemption for a period of 10 years and stamp duty

exemption on loan and service agreements for KLIFD statuscompanies.

Industrial building allowance and accelerated capital allowance forKLIFD Marquee Status Companies.

70% tax exemption for a period of 5 years for property developers inKLIFD.

40

TAX INCENTIVES

D. GREEN INCENTIVES

Conservation of the environment

1.Companies undertaking performance contracting serviceactivit ies to conserve usage of energy

Eligibility:Applications from 8 September 2007 to 31 December 2015.

Incentive:Tax exemption under pioneer status of 100% of statutory income for

10 years; or ITA of 100% of QCE incurred within 5 years to be offsetagainst 100% of statutory income.

Import duty and sales tax exemption on energy conservationequipment not produced locally and sales tax exemption on thepurchase of equipment from local manufacturers.

2.Companies which incur capital expenditure for conservingenergy for own consumption

Eligibility:Applications from 8 September 2007 to 31 December 2015.

Incentive:ITA of 100% of QCE incurred within 5 years to be offset against 100%

of statutory income.Import duty and sales tax exemption on energy conservation

equipment not produced locally and sales tax exemption on thepurchase of equipment from local manufacturers.

3.Companies importing or purchasing locally manufactured energyefficiency (EE) equipment for third party consumption

Eligibility:Applications from 30 August 2008 to 31 December 2012.

Incentive:Import duty and sales tax exemption on EE equipment for importers.Sales tax exemption on purchase of locally manufactured EE

consumer goods.

41

TAX INCENTIVES

Green Building Index (GBI) CertificationEligibility:A person (resident in Malaysia) who has obtained a green building index(GBI) certificate issued by the Board of Architects Malaysia from 24October 2009 until 31 December 2014.

Incentive:Exemption of statutory income equal to the amount of qualifyingexpenditure incurred for the purpose of obtaining the GBI certificate.“Qualifying expenditure” means additional expenditure incurred forconstruction of a building, alteration, renovation, extension orimprovement of an existing building or plant or machinery.

Reduction of greenhouse gas emission

Incentive:Tax exemption on income from sale of Certified Emission Reductions(YA 2008 to YA 2012).

Renewable energy source1.Companies using biomass, hydro power (not exceeding 10 mega

watts) or solar power for generation of energy

Eligibility:Applications received until 31 December 2015. For applications from 8September 2007 to 31 December 2015, more than one company in agroup may apply.

Incentive:Tax exemption under pioneer status of 100% of statutory income for

10 years; or ITA of 100% of QCE incurred within 5 years to be offsetagainst 100% of statutory income.

Import duty and sales tax exemption on equipment used to generateenergy from renewable sources not produced locally and sales taxexemption on equipment purchased from local manufacturers.

2.Company generating renewable energy for own consumptionEligibility:Applications from 30 August 2008 to 31 December 2012.

42

TAX INCENTIVES

Incentive:ITA of 100% of QCE incurred within 5 years to be offset against 100% ofstatutory income.

3.Non-energy generating companies importing or purchasingequipment for renewable energy generation for consumption by3rd parties

Eligibility:Applications from 30 August 2008 to 31 December 2012.

Incentive:Import duty and sales tax exemption on solar photovoltaic equipment

for usage by third parties for importers .Sales tax exemption on the purchase of solar heating system

equipment from local manufacturers.

Utilisation of oil palm biomass to produce value addedproducts

Eligibility:Applications from 13 September 2013.

Incentive:Existing companies (incentive for reinvestment):

Pioneer status ITA- Tax exemption of 100%


- 100% on additional QCE incurredwithin 5 years to be offset against100% of statutory income

New companies:Pioneer status ITA- Tax exemption of

100% of statutoryincome for 10 years

- 100% of QCE incurred within 5years to be offset against 100%of statutory income

43

TAX INCENTIVES

E. INFORMATION AND COMMUNICATION TECHNOLOGY

Cost of developing websites

Incentive:Expenditure incurred on development of websites for a business is givenan annual deduction of 20% for 5 years.

Implementation of RosettaNet

Eligibility:Qualifying company (member of RosettaNet Malaysia Bhd):Company assisting local small and medium scale companies to adopt

RosettaNet;A company / association / statutory body assisting RosettaNet

Malaysia Bhd.

Incentive:Expenditure incurred in the management and operation of RosettaNet byqualifying company is tax deductible.

Offshore trading via websites in Malaysia

Eligibility:An approved offshore trading company trading with non-residentsthrough a website in Malaysia, in foreign goods for consumption outsideMalaysia.

Incentive:Tax on chargeable income at 10% for 5 years.Tax exempt dividends may be paid out of exempt income.

Refer to item A of Tax Incentives section for more incentives for the ICTindustry.

F. OTHER INCENTIVES

Infrastructure allowance

Eligibility:A Malaysian resident company which has incurred QCE on infrastructurefor its business in a promoted area. “Infrastructure” includes a bridge,jetty, port or road.

44

TAX INCENTIVES

Incentive:100% of QCE to be offset against 100% of statutory income.

Infrastructure for public useEligibility:Companies that incur expenses on infrastructure in relation to its’business, which is available for public use.

Incentive:100% deduction of the expenditure.

Owners of Malaysian brandsEligibility:Owners of Malaysian brand name which outsource manufacturingactivities to contract manufacturers.

Incentive:Import duty and sales tax exemption on certain imported raw materialand imported semi-finished goods.

Proprietary rights

Eligibility:Manufacturing companies which are at least 70% owned by Malaysiancitizens, and acquires proprietary rights (e.g. patents, trademarks) to beused for purposes of the business.

Incentive:Deduction for cost of acquisition at 20% of cost per year of assessment.

Private higher education institutions (PHEIs)Eligibility:PHEIs incurring expenses on development of new courses which complywith regulatory requirements relating to those courses.

Incentive:Deduction over 3 years.

45

TAX INCENTIVES

Private schools

Eligibility:Private schools providing education services

1.Non Profit Oriented Private, International, Expatriate Schools

Incentive:100% income tax exemption on income received from management of aschool

2.Profit Oriented International Schools

Incentive:ITA of 100% on QCE incurred within 5 years can be used to offset

70% of statutory income (applications from 14 July 2010 until 31December 2015); or

70% income tax exemption for a period of 5 years (applications from 8October 2011 until 31 December 2015)

3.Profit Oriented Private Schools

Incentive: 70% income tax exemption for a period of 5 years; or ITA of 100% on QCE incurred within 5 years can be used to offset

70% of statutory income (applications from 8 October 2011 until 31December 2015)

The following incentives are also granted to profit oriented privateschools and international schools: Import duty and sales tax exemption for educational equipment

(applications from 8 October 2011); and Double deduction for overseas promotional expenses (from year of

assessment 2012).

46

TAX INCENTIVES

Sponsorship of Arts

Eligibility:Companies that sponsors local and foreign art and cultural performancesapproved by the Minister of Information Communications and Culture.

Incentive:Deduction on sponsoring such performances of up to RM500,000 peryear, restricted to RM200,000 for foreign performances.

G. REGIONAL OPERATIONS

International Procurement Centre (IPC)Eligibility:Companies incorporated in Malaysia with:minimum paid-up capital of RM500,000 and minimum annual business

spending of RM1,500,000;handling of goods directly through Malaysian ports and airports;minimum turnover of RM50 million by third year of operations .

Incentive:The income tax incentives for RDC are applicable where turnover

exceeds RM100 million, subject to certain other conditions (see RDC).Customs duties exemption on import of raw materials, components or

finished products into Free Zones or licensed manufacturingwarehouses for repacking, cargo consolidation and integration beforedistribution to final consumers.

Expatriate posts granted based on needs.Foreign currency accounts to retain export proceeds allowed.

International trading companyEligibility:Companies incorporated in Malaysia (registered with MATRADE) with

at least 60% Malaysian owned equity and has minimum annual salesturnover of RM10,000,000;

Uses local services for banking, finance, insurance and uses localports and airports.

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TAX INCENTIVES

Incentive:Income tax exemption equivalent to 20% of the increased export valueup to a maximum of 70% of statutory income for 5 years.

Operational Headquarters (OHQ) company

Eligibility:Companies incorporated in Malaysia:Providing qualifying services approved by MIDA to its offices or related

companies within or outside Malaysia;Paid-up capital of at least RM500,000 with minimum annual business

spending of RM1.5 million .

Incentive:Income tax exemption for 10 years excluding income from qualifying

services provided to related companies in Malaysia exceeding 20% oftotal income from qualifying services.

Tax exempt dividends may be paid from the exempt account.

Regional Distribution Centre (RDC)

Eligibility:Companies incorporated in Malaysia:With minimum paid-up capital of RM500,000 and minimum annual

business spending of RM1,500,000;Annual turnover of RM100 million or more.

Incentive:Statutory income exempted for 10 years excluding income from local

sales exceeding 20% of total sales.Import duty and sales tax exemption on goods for distribution.Expatriate posts granted based on needs.Tax exempt dividends may be paid out of exempt income.

H. RESEARCH AND DEVELOPMENT (R&D)

Approved research company or institution

Incentive:100% exemption of profits before deduction of capital allowances for 5

48

TAX INCENTIVES

years.

Company undertaking approved in-house R&D projects

Incentive:ITA of 50% on QCE for 10 years to be set off against 70% of statutoryincome.

Contract R&D company which provide R&D services to thirdparties

Incentive:Pioneer status with 100% tax exemption on statutory income for 5 years;or ITA of 100% on QCE for 10 years to be set off against 70% ofstatutory income.

Commercialisation of resource-based R&D findings

Eligibility:Company incorporated and tax resident in Malaysia;Investor company should own at least 70% of the equity of the

company that commercialises resource-based R&D findings;Commercialisation of R&D findings is within a year from approval of

the of incentive;Applications received from 11 September 2004.

Incentive:Investor company - tax deduction equivalent to the amount of

investment made in subsidiary; andSubsidiary company undertaking the commercialisation of the R&D

findings - pioneer status with 100% tax exemption on statutory incomefor 10 years.

R&D company undertaking projects for its own group andthird partiesIncentive:ITA of 100% on QCE for 10 years to be setoff against 70% of statutory

income.

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TAX INCENTIVES

Double deduction- Revenue expenditure incurred on approved research .- Cash contributions to approved research institutions .- Payment for services of approved research companies or

institution / contract R&D companies / non-related R&Dcompanies / related R&D companies which are not enjoying theITA incentive.

Industrial building allowance- QCE incurred on buildings used for approved research.

I. SHIPPING INDUSTRY

Eligibility:Resident person (including a partnership) carrying on a business of:transporting passengers or cargo by sea on Malaysian ships owned by

that person; ortime or voyage charter of Malaysian ships owned by that person.

Incentive:Income tax exemption of 100% of statutory income. Reduced from

100% to 70% of statutory income effective from YA 2012.Tax exempt dividends may be paid out of exempt income.

J. SPECIAL ECONOMIC CORRIDORS

Iskandar Malaysia (IM)

Incentive:IDR-status company – 10 years exemption from tax on income derivedfrom qualifying activity provided to any person situated:(a) both within an approved node and outside Malaysia; or(b) outside Malaysia only.

Developer – exemption of statutory income from:(a) disposal of rights over land in an approved node (until YA 2015);

and(b) rental or disposal of building located in an approved node (until YA

2020).

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TAX INCENTIVES

Development manager – exemption of statutory income from provisionof management, supervisory or marketing services to developers (untilYA 2020).

K. TOURISM AND EXHIBITIONS

Conference promotionEligibility:Malaysian incorporated companies promoting conferences held inMalaysia where at least 500 foreign participants are brought in annually.

Incentive:Tax exemption on income from bringing in these foreign participants.

Domestic tours

Eligibility:Resident company organising domestic tour packages.

Incentive:Tax exemption on income from domestic tour packages where the totallocal tourists is 1,200 or more per year (YA 2007 to YA 2011).

Health tourism

Eligibility:Health care service providers resident in Malaysia offering services toforeign clients in Malaysia.

Incentive:100% of the value of increased export to be offset against 70% of thestatutory income (YA 2010 to YA 2014).

Group inclusive tours

Eligibility:Resident incorporated companies carrying on an inbound tour operatingbusiness approved and registered with the Ministry of Tourism.

Incentive:Tax exemption on income from such tours where inbound tourists fromoutside Malaysia is 500 or more for the period (YA 2007 to YA 2011).

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TAX INCENTIVES

International trade exhibition

Eligibility:Resident incorporated companies organising international tradeexhibitions approved by MATRADE held in Malaysia with at least 500foreign visitors per year.

Incentive:Income tax exemption for income from organisation of the exhibition.

L. DOUBLE DEDUCTIONDouble deductions can be claimed for the following expenses:Allowances paid by a company to participants of the Capital Market

Graduate Training Scheme for unemployed graduates, for 3 yearsfrom the date of certification of the Training Scheme (w.e.f 2September 2006).

Expenditure incurred by companies on the training of employees underan approved training program.

Expenses incurred by employers in training their employees in thefollowing fields (YA 2009 to YA 2012):(i) post graduate courses in information technology and

communication, electronics or life sciences;(ii) post basic courses in nursing or allied health care; or(iii) aircraft maintenance engineering courses.

Expenses incurred in obtaining recognized quality systems, standardsand halal certification (w.e.f YA 2005).

Expenses incurred in the promotion of Malaysia as an InternationalIslamic Financial Centre (YA 2008 to YA 2015).

Expenditure incurred on advertising Malaysian brand names registeredlocally or overseas and professional fees paid to companies promotingMalaysian brand names. W.e.f YA 2007, the deduction is extended toa company within the same group which has incurred the expense,provided that the company is more than 50% owned by the brandname owner.

Export credit insurance premiums. W.e.f YA 2011, includes insurancebased on takaful concept.

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INCOME EXEMPT FROM TAX

Freight charges paid by manufacturers exporting rattan and wood-based products (excluding sawn timber and veneer).

Freight charges incurred by manufacturers for shipping goods fromSabah and Sarawak to Peninsular Malaysia using ports in PeninsularMalaysia.

Insurance premiums for the import and export of goods where risksare insured with an insurance company incorporated in Malaysia.

Promotional expenditure incurred on seeking opportunities for theexport of manufactured products, agricultural produce and services.

Remuneration for employing local employees (between 10 March 2009to 31 December 2010) who have been retrenched on or after 1 July2008. The deduction is restricted to RM10,000 per month peremployee for 12 consecutive months (w.e.f YA 2009).

Remuneration paid to an employee who is physically or mentallyhandicapped.

Expenditure incurred by companies in providing practical trainingunder internship programme (YA 2012 to YA 2016).

Expenditure incurred by private companies in providing scholarships toMalaysian students pursuing study at diploma and bachelor’s degreein local institutions of higher learning registered with the MOHE (YA2012 to YA 2016).

Expenditure incurred by companies in participating in career fairsabroad that are endorsed by TalentCorp (YA 2012 to YA 2016).


Income exempt from tax includes:

Charges collected (under the relevant statutory provisions) by astatutory authority, and donations received by a statutory authority.

Compensation for loss of employment and payments forrestrictive covenants:- fully exempted if due to ill health; or- RM10,000 for every completed year of service with the same

employer or with companies in the same group if not due to ill health(for persons who lost their employment on or after 1 July 2008).

Death gratuities or sums received as consolidated compensation fordeath or injuries.

53


Dividends paid, credited or distributed by Co-operative Societies totheir members.

Fees or honorarium for validation and other services relating toeducational programs in higher educational institutions which areverified by the National Accreditation Board.

Foreign income of any person (other than a resident companycarrying on the business of banking, insurance or sea or air transport)arising from sources outside Malaysia and remitted into Malaysia.

Housing and Labuan Territory allowance received by a citizen froman employment with the Federal or State government, a statutory bodyor Labuan company (exempt to the extent of 50% of gross allowance)(YA 2006 to YA 2010).

Income arising from transactions made under a SecuritiesBorrowing and Lending Agreement accruing to a borrower and alender arising from a loan of securities listed on the KLSE and thereturn of the same or equivalent securities, and the correspondingexchange of collateral, in respect of securities borrowing and lendingtransactions (excludes dividends, lending fees, interest earned oncollateral and rebates).

Income from a grant or subsidy given by the Federal or Stategovernment.

Income from employment on board a ship used in a business of aMalaysian shipping company.

Income from director’s fees received by a director of a Labuancompany in Labuan, who is a non-Malaysian citizen (YA 2007 to YA2010).

Income of any person from the provision of qualifying professionalservices rendered in Labuan to a Labuan company is exempt to theextent of 65% of the gross amount of the income (YA 2005 to YA2010).

Income of a non-citizen individual from the exercise of anemployment in a managerial capacity is exempt to the extent of 50% ofgross income from the employment:- in a Labuan company (YA 2005 to YA 2010).- in a Labuan trust company (YA 2006 to YA 2010).

Income of a political association.

54


Income of non-profit oriented Government assisted and privateschools (defined) including schools formed by a body of persons, atrust body or a company limited by guarantee (from YA 2008).

Income of qualifying persons derived from the qualifying activity(defined) which includes the maintenance of cemetarial ground,religious or cultural and traditional ceremony and the purchase of newcemetarial ground.

Income received by non-residents from renting ISO containers toMalaysian shipping companies.

Income received by non-resident experts who provide technicaltraining services in the following fields (30 August 2008 until 31December 2012):(i) post graduate courses in ICT, electronics and life sciences;(ii) post basic courses in nursing and allied health care; and(iii) aircraft maintenance engineering courses.

Income related to scientific research which has beencommercialised and verified by the Ministry of Science,Technology & Innovation. Exemption of 50% of such income for 5years from the date of receipt .

Interest accruing to any person in respect of:- bonds issued under the Bon Simpanan Malaysia Siri Ked ua (BSM 2)

by Bank Simpanan Nasional.- any savings certificate issued by the government.- Islamic securities originating from Malaysia, other than convertible

loan stock issued in any currency other than Ringgit , and approvedby Securities Commission.From YA 2010, extended to Islamicsecurities approvedl by the Labuan Financial Services Authority.

Interest income derived by non-resident persons from a bank orfinance company licensed under BAFIA or Islamic Banking Act 1983,or any other institution approved by the Minister.

Interest income derived by non-resident companies from:- securities issued by the Government of Malaysia; or- Islamic securities or debentures issued in Ringgit Malaysia, other

than convertible loan stocks, approved by the SecuritiesCommission.

55


Interest or bonus accruing to a resident individual from:- deposits in all institutions approved to take deposits.- Merdeka bonds issued by the Central Bank of Malaysia.

Interest or discount accruing to any individual, unit trust and listedclosed-end fund or from:- bonds or securities issued or guaranteed by the government;- debentures or Islamic Securities, other than convertible loan stock,

approved by the Securities Commission;- Bon Simpanan Malaysia issued by the Central Bank of Malaysia.

Pensions paid to a resident person, which is derived from anemployment exercised in Malaysia where:- the recipient has reached the age of 55 or the compulsory retirement

age; or- retirement is due to ill health.

Perquisites (in cash or in kind) for long service (more than 10 years ofemployment with the same employer), past achievement or serviceexcellence, innovation, or productivity award up to an amount or valueof RM2,000 a year.

Retirement gratuities are fully exempt :- where the retirement is due to ill health or on, or after reaching the

age of 55 or other compulsory age of retirement, from anemployment which has lasted ten years with the same employer orwith companies in the same group; or

- upon reaching compulsory retirement age pursuant to anemployment contract or collective agreement at the age of 50 butbefore 55 and that employment has lasted 10 years with the sameemployer or with companies in the same group (from YA 2007).

Royalties received by non-residents from registered privateinstitutions of approved higher learning for franchised educationalschemes.

56

REAL PROPERTY GAINS TAX

Royalties received by an individual resident in Malaysia in respect of:

Amount exemptedRM

- publication of, or the use of, or the right to use,any artistic work

10,000

- recording discs or tapes 10,000- publication of, or the use of, or the right to use,

any literary work or any original painting20,000

- any musical composition 20,000

Subscription fees received by trade associations.

REAL PROPERTY GAINS TAX (RPGT)Charge to tax

RPGT is chargeable on gains arising from the disposal of real propertywhich is defined as: any land situated in Malaysia and any interest, option or other right

in or over such land; or shares in a real property company (RPC).

From 1 January 2010, RPGT is chargeable at the rate of 5% on gainsarising from the disposal of real property within 5 years of acquisition.

From 1 January 2012, the RPGT rates are revised as follows:

Disposal RPGT rates for companies and individualUp to 2 years 10%Exceeding 2 until 5 years 5%Exceeding 5 years 0%

Real property company

A RPC is a controlled company holding real property or shares inanother RPC as a major asset (i.e. defined value not less than 75% ofthe value of its total tangible assets).

57

SERVICE TAX

Chargeable persons

Every person whether or not resident in Malaysia is chargeable to RPGTin respect of any gains accruing on the disposal of real property or RPCshares in Malaysia.

Withholding of RPGT

With effect from 1 January 2010, an acquirer of chargeable asset mustwithhold 2% of the total value of the acquisition price to be paid to theInland Revenue Board within 60 days from the date of disposal.

ExemptionsThe following are some exemptions from RPGT that are available:an amount of RM10,000 or 10% of the chargeable gain, whichever is

greater, accruing to an individual (w.e.f 1 January 2010);gain arising on disposal as a result of compulsory acqui sition of

property under law;gain accruing to the government, State government, or a local

authority;gain accruing to an individual who is a citizen or a permanent resident

in respect of the disposal of one private residence;gift made to the government, State government, local authority or

approved charity;disposal of assets in connection with securitization of assets from 1

January 2001;gain arising from disposal of real property to Real Estate Investment

Trusts and Property Trust Funds approved by the SecuritiesCommission (SC);

gain arising from disposal of chargeable asset pursuant to a scheme offinancing approved by the Central Bank or the SC as a scheme whichis in accordance with the principles of Syariah.

SERVICE TAX

Basis of taxationService tax is a consumption tax levied and charged on any taxableservice provided by any taxable person.

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SERVICE TAX

Service tax will be replaced with a single broad based Goods andServices Tax (GST), on a date to be announced.

Rate of tax

The rate of service tax is 6% ad valorem effective from 1 January 2011(previously 5%). This tax is levied on all taxable services, except for theprovision and issuance of charge or credit card, the service tax is asfollows:-(i) RM50 per year on the principal card; and(ii) RM25 per year on the supplementary card.

The service tax is chargeable on the date of the issuance of the card andevery 12 months thereafter or part thereof after the issuance of the cardor on the date of the renewal of the card and every 12 months thereafteror part thereof after the renewal of the card.

Taxable person/licensing

Any taxable person who carries on business of providing taxable servicemust apply for a licence, and the term “person” includes an individual, afirm, society, association, a company and every other juridical person.

No fee is payable for the issuance of a licence.

Taxable persons and taxable servicesA complete list of taxable persons and taxable services can be found inthe Second Schedule to the Service Tax Regulations 1975. Thefollowing is a summary:

Taxable personAnnual salesturnover (RM)

1 Operators of hotels with more than 25 rooms(subject to some exclusions)

*

2 Operators of restaurants, bars, snack-bars, coffeehouses or places located in hotels with more than25 rooms, providing food, drinks and tobaccoproducts wholly eat-in or partly take-away

*

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SERVICE TAX

Annual salesturnover (RM)

3 Operators of restaurants, bars, snack-bars,coffee houses or places located in hotels with25 rooms or less, providing food, drinks andtobacco products wholly eat-in or partly take-away

300,000

4 Operators of restaurants, bars, snack-bars,coffee houses or places located outside hotels,providing food, drinks and tobacco productswholly eat-in or partly take-away (subject tosome exclusions)

3 million(Effective 1July 2008)

5 Operators of food courts 3 million(Effective 1July 2008)

6 Operators of night-clubs, dance halls andcabarets

*

7 Operators of approved health-centres andmassage parlours

*

8 Operators of 1st, 2nd or 3rd Class PublicHouse and 1st or 2nd Class Beer House

*

9 Operators of private clubs 300,00010 Operators of golf course or golf driving range

(including operators of private clubs having totalannual sales turnover of RM300,000 or less orany hotel having 25 or less rooms)

*

11 Licensed private hospitals 300,00012 Insurance companies *13 Any person providing communication services

who is registered under the CommunicationsAnd Multimedia Act 1998 or licensed under theCommunications and Multimedia (Licensing)Regulations 2000

*

14 Any person who is given permission to act asagent for transacting business relating to theimport or export of any goods or luggage undersection 90 of the Customs Act 1967

*

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SERVICE TAX

Annual salesturnover (RM)

15 Any person who is licensed under section 65 or65E of the Customs Act 1967 and who is also givenpermission to act as an agent for transactingbusiness relating to the import or export of anygoods or luggage that is stored in the licensedwarehouse or inland clearance depot

*

16 Operators of parking space for motor vehicles 150,00017 Courier-services companies 150,00018 Operators of motor vehicles service and/or repair

centres150,000

19 Licensed private agencies 150,00020 Employment agencies 150,00021 Hire-and-drive car and hire-car service companies 300,00022 Advertising companies 300,00023 Public Accountants **24 Advocates and Solicitors **25 Professional Engineers **26 Architects **27 Licensed or Registered Surveyors/Registered

Valuers, Appraisers and Estate Agents**

28 Consultants (subject to some exclusions) **29 Management companies **30 Any person who is regulated by Bank Negara

Malaysia and provides credit card or charge cardservices through the issuance of a credit card or acharge card

*

* No threshold** No threshold effective 1 January 2008

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SALES TAX

Taxable services

Taxable services include the provision of rooms for lodging/sleepingaccommodation, health services, certain professional services, certaintelecommunication services including bandwidth services and certainvalue added services, management services, security services, provisionof parking space, provision of golf course, golf driving range or servicesrelated to golf or golf driving range, courier delivery services (other thanto destinations outside Malaysia), provision and issuance of charge cardor credit card whether or not annual subscription or fee is imposed, thesale or provision of food, drinks and tobacco products and paidbroadcasting services.With effect from 1 January 2003, certain professional services providedto companies within the same group would not be taxable subject tocertain qualifying criteria.

Payment of service tax/taxable periodService tax is due when payment is received for taxable servicesrendered. If payment is not received within 12 calendar months from thedate of issuance of invoice, the tax is due on the day immediately afterthe expiry of the 12-month period.

Any service tax that falls due during a taxable period, which is 2 calendarmonths, is payable to the customs authorities within 28 days after theend of the taxable period.

Refund of service tax on doubtful debts or “bad debts”A licensee is eligible for a refund of service tax in relation to debtsdeemed as “bad debts” or provided as doubtful debts, subject toconditions. This includes debts which cannot be collected after 6 monthsfrom the date of payment of tax.

SALES TAX

Basis of taxationSales tax is a single-stage tax imposed on certain locally manufacturedgoods, and on similar goods imported. Labuan, Langkawi, Tioman

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SALES TAX

and Free Zones, do not fall within the ambit of this tax. Sales tax is aconsumption tax and under the system, the onus is on the manufacturersto levy, charge and collect the tax from their customers.

In the case of imported goods, sales tax is collected from the importer atthe time the goods are released from customs control.

Sales tax will be replaced with a single broad based Goods and ServicesTax (GST), on a date to be announced.

Value of goodsThe valuation of goods for sales tax purposes is based on the WorldTrade Organsation (WTO) principles of customs valuation.

Rates of taxSales tax is generally an ad valorem tax. Specific rates of sales tax arecurrently only imposed on certain classes of petroleum (generally,refined petroleum). The ad valorem rates are as follows:

Class of goodsRate %

Fruits, certain foodstuff, timber and buildingmaterials

5

Cigarettes and tobacco 5Liquor and alcoholic drinks 5All other goods, except petroleum subject to specificrates and goods not specifically exempted

10

Taxable goods

All goods manufactured in Malaysia or imported are taxable unless theyare specifically exempted by order of the Minister of Finance.

Goods exempted

All exports are exempted from sales tax.Goods which are specifically exempted include:

- Live animals, fish, seafood and certain essential food items includingmeat, milk, eggs, vegetables, fruits, bread, etc.

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SALES TAX

- Medical and educational equipment including sports equipment,books, etc.

- Photographic equipment and films.- Motorcycles below 201 c.c. capacity, bicycles for adult use including

parts and accessories.- Machinery for textile industry, food preparation industry, paper and

printing industry, construction industry, metal industry, etc.- Primary commodities including cocoa, rubber and their related

products.- Naturally occurring mineral substances, chemicals, etc.- Helicopters, aircraft, ships and other vessels.

Licensing

No person is permitted to manufacture taxable goods unless the personis duly licensed as a licensed manufacturer. The term “manufacture” inrelation to goods other than petroleum, means the conversion by manualor mechanical means of organic or inorganic materials into a newproduct by changing the size, shape or nature of such materials andincludes the assembly of parts into pieces of machinery or otherproducts but does not include the installation of machinery or equipmentfor the purpose of construction. In relation to petroleum, the term“manufacture” means refining or compounding and includes the additionof foreign substance.

Exemption from licensing

A manufacturer of taxable goods whose total sales value did not exceedRM100,000 in the preceding year and is not expected to exceedRM100,000 during the next twelve months may apply for a certificate ofexemption from licensing. The certificate is renewable on a yearly basis.However, such manufacturer may choose to be licensed in order toenjoy tax-free inputs.

In addition, certain manufacturing operations are also exempted f rom thelicensing requirements. They include the developing and printing ofphotographs and production of film slides, preparation of ready-mixedconcrete, repacking of bulk goods, repair of second hand goods and theinstallation of air conditioners in motor vehicles.

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IMPORT DUTIES

Tax-free raw material

In order to maintain the single-stage concept, there are facilitiesavailable to allow for inputs (raw materials and components) to beimported or acquired free of sales tax by a licensed manufacturer for usein the manufacturing process.

Drawback

A licensed manufacturer or importer can claim drawback on the sales taxpaid in respect of goods, which are subsequently exported.

Payment of sales tax/taxable period

Generally, sales tax shall be due at the time the taxable goods are sold,or disposed of otherwise than by sale by the taxable person. Any salestax that falls due during any taxable period, which is normally 2 calendarmonths, shall be paid to the customs authorities within 28 days from theexpiration of the taxable period. However, in relation to the classes ofpetroleum that are subject to sales tax, special provisions applyregarding the time when sales tax is due and payable.

Refund of sales tax on doubtful debts or “bad debts”

A licensee is eligible for a refund of sales tax in relation to debts deemedas “bad debts” or provided as doubtful debts”, subject to conditions. Thisincludes debts which cannot be collected after 6 months from the date ofpayment of tax.

IMPORT DUTIESRates of duties

Import duties are levied on goods that are subject to import duties andimported into the country. Import duties are generally levied on an advalorem basis but may also be imposed on a specific basis. The advalorem rates of import duties range from 2% to 60%. Raw materials,machinery, essential foodstuffs and pharmaceutical products aregenerally non-dutiable or subject to duties at lower rates.

Tariff Rate QuotaEffective 1 April 2008, Malaysia implemented tariff rate quota (TRQ) onselected agricultural products, such as chicken, milk and cream,

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LICENSED MANUFACTURING WAREHOUSE

hen eggs, cabbages. Under TRQ, the tariff charged depends on thevolume of imports. Imports within quota (volume) attract duties at a lowertariff rate while a higher tariff rate applies on goods in excess of the quotavolume “out-quota tariff rate”. The quota applicable is determined by therelevant agency, e.g. Department of Veterinary Services.

Value of goods

The value of goods for the purpose of computing import duties isdetermined largely in accordance with the World Trade Organisation(WTO) principles of customs valuation.

Exemptions

Exemptions are available (subject to conditions) in respect of importduties on:raw materials and components used directly for the manufacture of

goods for export and domestic markets.dutiable machinery and equipment which are used directly in the

manufacturing process.Manufacturers are required to apply to the relevant authorities forexemption.

Prohibition of imports

Import restrictions are seldom imposed except on a limited range ofproducts for protection of local industries or for reasons of security andpublic safety. An import licence has to be obtained for the importation ofprohibited goods.

LICENSED MANUFACTURING WAREHOUSEManufacturers who export 80% or more of their finished products canapply for licensed manufacturing warehouse (LMW) status. Rawmaterials, components and machinery used in the manufacturingprocess are exempted from import duties and sales tax.

FREE ZONE

A free zone is deemed to be a place outside Malaysia. Subject to certainexclusions, goods and services can be brought into or provided in freezones without payment of customs / excise duties, sales and service tax.

66

FREE TRADE AGREEMENTS

FREE TRADE AGREEMENTS

Malaysia has concluded several regional and bilateral free tradeagreements and several more are still under negotiation. One of the keyfeatures of free trade agreements is the preferential tariff treatmentaccorded to member countries. Currently, Malaysia has signed thefollowing free trade agreements:

- ASEAN Trade in Goods Agreement- ASEAN China Free Trade Agreement- ASEAN Korea Free Trade Agreement- Malaysia-Pakistan Closer Economic Partnership- Malaysia-Japan Economic Partnering Agreement- ASEAN-Australia-New Zealand Free Trade Agreement- ASEAN-Japan Comprehensive Economic Partnership- ASEAN-India Trade in Goods Agreement- Malaysia-Chile Free Trade Agreement- Malaysia-India Comprehensive Economic Cooperation Agreement- Malaysia-New Zealand Free Trade Agreement

The preferential tariff treatment and the rules of origin may vary from onefree trade agreement to another.

EXPORT DUTIESExport duties are generally imposed on the country’s main commoditiessuch as crude petroleum and palm oil for revenue purposes.

EXCISE DUTIESBasis of taxation

Excise duties are imposed on a selected range of goods manufacturedin Malaysia or imported into Malaysia. Goods which are subject to exciseduty include beer/stout, cider and perry, rice wine, mead, undenaturedethyl alcohol, brandy, whisky, rum and tafia, gin, cigarettes containingtobacco, motor vehicles, motorcycles, playing cards and mahjong tiles.

Rates of dutiesThe rates of excise duties vary from a composite rate of 10 sen per litre

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STAMP DUTY

and 15% for certain types of spirituous beverages, to as much as 105%for motorcars (depending on engine capacity).

Licensing

Unless exempted from licensing, a manufacturer of tobacco, intoxicatingliquor or goods subject to excise duties must have a licence tomanufacture such goods.

A warehouse licence is required for storage of goods subject to exciseduty. However, a licence to manufacture tobacco, intoxicating liquor orgoods subject to excise duty also permits the holder to store such goods.

Payment of duty

As a general rule, duty is payable at the time the goods leave the placeof manufacture. However, for motor vehicles, duty is payable at the timethe vehicles are registered with the Road Transport Department.

ExportsNo excise duty is payable on dutiable goods that are exported.

STAMP DUTY

Basis of taxationStamp duty is chargeable on instruments and not on transactions. If atransaction can be effected without creating an instrument of transfer, noduty is payable.An unstamped or insufficiently stamped instrument is not admissible asevidence in a court of law, nor will it be acted upon by a public officer.

With effect from 1 January 2009, payment of stamp duty by way ofelectronic medium is available for persons who have registered with theCollector.

Rates of dutyThe rates of duty vary according to the nature of the instruments andtransacted values.

Generally, transfer of properties can give rise to significant stamp duty:

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STAMP DUTY

Properties (other than shares or marketable securities)ValueRM

Rate Duty payableRM

On the first 100,000 RM1 per RM100or part thereof

1,000

On the next 400,000 RM2 per RM100or part thereof

8,000

500,000 9,000In excess of 500,000 RM3 per RM100

or part thereof

SharesRM3 for every RM1,000 or any fraction thereof based onconsideration, or value whichever is greater. The Stamp Officegenerally adopts one of the 4 methods for valuation of ordinary sharesfor purposes of stamp duty:- price earnings ratio;- net tangible assets;- sale consideration; and- par value.

Service Agreements and Loan AgreementsStamp duty of 0.5% on the value of the services/loans, however thefollowing remission is available for instruments of serviceagreements:- Executed from 15 September 2009 to 31 December 2010: stamp

duty of up to RM50 and the excess duty is remitted ;- Executed on and after 1 January 2011: subject to the following :

Stamp dutyAll service agreement (one tier) Ad valorem rate

of 0.1%Multi-tier service agreement(a) Non-governmentcontract (i.e. between privateentity and service providers

First level

Subsequentlevel(s)

Ad valorem rateof 0.1%

Up to RM50

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STAMP DUTY

Stamp dutyMulti-tier service agreement(b) Government contract(i.e. between Federal /StateGovernment of Malaysia orState / local authority andservice providers)

First levelSecond level

Subsequentlevel(s)

ExemptedAd valorem rate

of 0.1%Up to RM50

StampingInstruments executed in Malaysia which are chargeable with duty mustbe stamped within 30 days from the date of execution. When theinstruments are executed outside Malaysia, they must be stamped within30 days after they have first been received in Malaysia.

PenaltyThe penalty imposed for late stamping varies based on period of delay.

Relief/Exemption/Remission from stamp duty

Exemption, remission or relief of stamp duty may be available:where shares and undertakings are transferred under a scheme of

reconstruction or amalgamation of companies (conditions apply);on the transfer of assets between associated companies, where either

company owns 90% or more of the other company, or where a thirdcompany owns 90% or more of both associated companies (conditionsapply);

for refinancing of business loans to the extent of the duty that would bepayable on the existing term loan’s principal balance amount;

for securitisation of assets from 1 January 2001;for offers to subscribe for, or the issue and transfer of debentures

approved by the Securities Commission (SC);for transfer of securities listed on MESDAQ for a borrowing and

lending transaction made under a Securities Borrowing and LendingAgreement;

for instruments of the Asset Sale/Purchase/Lease Agreement executedbetween customer and bank made under Syariah law principles forrenewing any Islamic revolving / Islamic overdraft financing facility(provided instrument for existing facility is duly stamped);

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STAMP DUTY

for instruments executed between a customer and a financier madeunder Syariah law principles for rescheduling or restructuring anyexisting Islamic financing facility. Stamp duty is remitted to the extentof the duty that would be payable on the existing Islamic financingfacility’s principal balance amount (provided instrument for existingIslamic financing facility is duly stamped);

stamp duty in excess of RM200 is remitted for certain contract notesrelating to the sale of any shares, stock or marketable securities whichare listed on a stock market of a stock exchange approved undersubsection 8(2) of the Securities Industry Act 1983;

stamp duty in excess of RM200 is remitted for certain contract notesrelating to the sale of shares, stocks or marketable securities incompanies incorporated in Malaysia or elsewhere between a localbroker and an authorised nominee on behalf of a foreign broker;

remission of 50% of stamp duty chargeable on the instrument oftransfer of immovable property operating as voluntary dispositionbetween parent and child. 100% remission for transfers of immovableproperty operating as voluntary disposition between husband and wife;

for specified instruments executed for purchase of certain low costhouses;

for instruments to secure a loan not exceeding RM10,000(conventional or Islamic banking principles) granted by Bank PertanianMalaysia for financing agricultural based projects;

for loan instruments for loans up to RM50,000 under the Micro CreditScheme executed with Bank Simpanan Nasional or Bank PertanianMalaysia;

for securities of companies not listed or removed from the KLSE’s listexecuted in favour of the Malaysian Central Depository Sdn Bhd(MCD), or the beneficial interest of such securities not listed orremoved from KLSE’s list held for the transferor’s account by theMCD;

instruments of deed of assignment and instruments of transfer of realproperty to Real Estate Investment Trust or a Property Trust Fundapproved by the SC;

instruments relating to the purchase of property by any financier for thepurpose of leaseback under the principles of Syariah;

for instruments executed pursuant to a scheme of financing approved

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STAMP DUTY

by the Central Bank, the Labuan Financial Services Authority or theSC, as a scheme in accordance with Syariah principles, where suchinstrument is an additional instrument strictly required for complyingwith those principles but not required for any other schemes offinancing, effective from 11 September 2004;

for mergers and acquisitions of companies listed on Bursa Malaysiawhere the instruments are executed not later than 31 December 2011;

for instruments executed for a scheme of transfer of the Islamicbanking business and/or the Islamic financial business by a licensedinstitution to its related corporation licensed or to be licensed under theIslamic Banking Act 1983 (scheme must be approved by the Ministerof Finance on Central Bank’s recommendation);

for sale and purchase agreements executed from 24 October 2009 to31 December 2014 for purchase of property issued with a greenbuilding index (GBI) certificate by the Board of Architect Malaysia. Theexemption applies to instruments executed between a purchaser (firstowner of the property) and a housing or property developer. Theexemption is on the cost constituting part of the cost of a propertypursuant to the purchase of that property issued with GBI certificate;

20% stamp duty remission on instruments used in Islamic financingbetween 2 September 2006 until 31 December 2015;

for instruments executed by BNM Sukuk Berhad for the issue of, offerfor subscription or purchase of, or invitation to subscribe for orpurchase, the Sukuk Bank Negara Malaysia-Ijarah and transfer ofsuch securities;

for instruments executed for an approved scheme of merger oracquisition between a BioNexus status company and a biotechnologycompany (between 2 September 2006 and 31 December 2011);

for sale and purchase agreements executed from 1 January 2011 to31 December 2012, remission of 50% is given on instruments oftransfer for purchase of only one unit of residential property by aMalaysian citizen at a price not exceeding RM350,000 provided thepurchaser does not own any other residential property at the date ofexecution of the sale and purchase agreement. Remission of 50% isalso given on the loan agreement instrument executed to financepurchase of the residential property;

all instruments executed by Labuan Corporation;sale and purchase agreements executed from 1 January 2012 to 31

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ECONOMIC INDICATORS AND DIRECTIONS

December 2016 for purchase of residential properties priced up toRM300,000 under the PR1MA Scheme;

loan instruments for loans up to RM50,000 executed between microenterprises and SME with any banking and financial institutions from 1January 2012 under the Micro Financing Scheme;

loan instruments for loans up to RM50,000 executed between anyprofessionals with Bank Simpanan Nasional from 1 January 2012under the Professional Services Fund.

ECONOMIC INDICATORS AND DIRECTIONSDespite external challenges, Malaysian economy to sustaingrowth momentum, to between 5.0 and 5.5%

Driven by strong domestic demand and FDI inflows, Malaysia’s GDP isexpected to moderate to 5.3% in 2011 and remain in steady growthmode in 2012. In the first half of 2011, the economy grew at moderatepace of 4.4% with slower export growth, a result of the weaker-than-expected US economic performance, euro sovereign debt crisis andglobal supply chain disruptions from natural disasters. Over the secondhalf of this year, Malaysia’s growth momentum is expected to pick-up onthe back of resilient private consumption and strong private investment.Despite a very challenging external environment, trade growth for 2011is expected to grow by 7.1% to record RM1.3 trillion, largely due tohigher commodity prices. In particular, agricultural exports grew 27%, onhigher prices and strong demand for palm oil and rubber. However, inthe first half of 2011, export earnings of E&E contracted 6.5% withsignificantly lower shipments of electronic equipment and parts (-26%).In contrast, non-E&E exports (chemicals and plastic products, metal andpetroleum products, textiles, apparel and footwear, food, beverages andtobacco, as well as machinery and equipment) expanded by 14%.Total exports of goods are forecast to increase by 6.8% to RM682 billionand imports at a slightly faster pace of 7.4% to RM568.1 billion.Consequently the trade surplus, is anticipated to increase marginally,and remain large at RM114 billion or 19% of GDP in 2011.

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Continued large surplus in current account, stronger netinternational reservesBacked by steady intra-regional trade, Malaysia’s overall balance ofpayments is expected to remain favourable with the current account insurplus for the 15th consecutive year. Underpinning this growth, is alarger surplus in the goods and services accounts. In particular, thegoods account is expected to register a surplus of RM143 billion in 2012(2011: RM140 billion) due to the expansion of domestic economicactivities and higher export earnings of manufactured goods, as well as,firm commodity prices. Meanwhile, with higher profits and dividends fromforeign companies operating in Malaysia, the services account isexpected to turnaround and register a net inflow of RM0.9 billion in 2012(2011: - RM1.4 billion).

Malaysia’s net international reserves has strengthened to RM415 billion(US$137 billion) as at mid-September 2011 (2010: RM329 billion orUS$107 billion). The reserves level is strong and adequate to finance 9.5

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months of retained imports and is 4.5 times the short -term external debt.

Inflationary pressures at 3.1%

Inflation, as measured by changes in the CPI (2005=100), is expected toedge higher to 3.1% in 2011, with higher prices of gas (+7.2%); alcoholicbeverages and tobacco (+6.3%); restaurants and hotels (+5.7%) andfood and non-alcoholic beverages (+4.6%).

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Notes: Effective January 2006, the Consumer Price Index (CPI) wasrebased to 2005 with nine existing groups reclassified into twelvegroups in order to reflect changes in household expenditurepattern. The three new groups are transport, communication andeducation.

Broad-based growth with strongest growth in theconstruction sector

For 2012, all sectors are expected to post positive growth, supported byfavourable domestic demand and supportive public sector with highercapital spending by NFPEs (non-financial public enterprises, e.g.Petronas, TNB, TM, MAHB and Syarikat Prasarana Negara Bhd).

The construction sector is supported by the acceleration of publicinfrastructure projects, and expected to register the strongest growth,doubling to 7% in 2012 (2011: 3.4%).With robust private consumption, the services sector is expected to growby 6.5% (2011: 6.4%), led by the wholesale and retail trade, finance andinsurance, real estate and business services, as well as the

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communications sector.

The agricultural sector is expected to grow steadily at 4.1% (2011:4.7%), driven by increased palm oil and rubber production, and highdemand for food commodities such as fish, livestock, fruits andvegetables.

Growth in the manufacturing sector is anticipated to be at 4.5%(2011:4.5%) supported by strong domestic-oriented industries andimprovement in the E&E market.A turnaround is projected for the mining sector at 2.5% growth (2011: -2.4%) which will be supported by higher production of crude oil andnatural gas.

77

FINANCIAL REPORTING

FINANCIAL REPORTING

The Malaysian Accounting Standards Board (MASB) has been establishedas the sole authority for issuing approved accounting standards and otherfinancial reporting pronouncements in Malaysia. All financial statementsprepared pursuant to any law administered by the Securities Commission(SC), Bank Negara Malaysia (BNM) and the Companies Commission ofMalaysia have to comply with approved accounting standards.

Existing Malaysian Financial Reporting frameworks

There is a two-tier reporting framework for companies in Malaysia whichtook effect for annual periods beginning on or after 1 January 2006 asfollows:

Type of entities MASB approved accountingstandards

Entities other than privateentities

Financial Reporting Standards(FRS)

Private entities Private Entity Reporting Standards(PERS)

Private entities are defined as private companies incorporated under theCompanies Act 1965 that:

(a) are not required to prepare / lodge any financial statements underany law administered by the SC or BNM; and

(b) are not a subsidiary / associate of / jointly controlled by an entitywhich is required to prepare/lodge any financial statements underany law administered by the SC or BNM.

The meaning of ‘subsidiary’, ‘associate’ and ‘jointly controlled’ are asrespectively defined as and explained in FRS 127 “Consolidated andSeparate Financial Statements”, FRS 128 “Investments in Associates”and FRS 131 “Interest in Joint Ventures”.

An entity may only be treated as a private entity in relation to suchannual periods or interim periods throughout which it is a private entity.

Private entities shall comply with either:- PERS in their entirety; or- FRS in their entirety.

78

EMPLOYEES’ PROVIDENT FUND

MASB announced in 2008 that by 1 January 2012, all approvedaccounting standards applicable to entities other than private entities willconverge fully with IFRS. In June 2011, the MASB issued an exposuredraft ED75 “IFRS-compliant Financial Reporting Standards” wherebyfinancial statements drawn up in accordance with the new IFRS-compliant framework will be in dual compliance with IFRS as well as withthe Malaysian approved accounting standards. To achieve this, entitiesare required to apply the equivalent to IFRS 1 “First-time Adoption ofInternational Financial Reporting Standards” as a first step.

The preamble to ED75 explained that the existing FRS framework isvirtually the same as the IFRS framework except for IAS 41”Agriculture”,IFRIC 15 “Agreements for the Construction of Real Estate”, differenteffective dates and transitional provisions in a limited number ofstandards.

MASB stated that it will announce its plans for non-private entitiesaffected by IAS 41 and IFRIC 15 at a later date.

EMPLOYEES’ PROVIDENT FUNDScope of EPF

The Employees’ Provident Fund (EPF) is a compulsory savings schemeestablished to provide a measure of security for old age retirement to itsmembers.

Expatriates and foreign workers, who are not Malaysian citizens orpermanent residents are not required to contribute to EPF although theymay elect to do so.

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Rates of contributions

The statutory rates of contributions are as follows:

Malaysian citizens andpermanent residents

(mandatory)

Expatriates and foreignworkers **

% of contribution of employee’s wages(minimum)

Employer Employee Employer EmployeeTill age 55(Income ≤RM5,000)

13% 11%* RM5 perperson

11%*

Till age 55(Income >RM5,000)

12% 11%* RM5 perperson

11%*

Age 56 till75 (from 1February2008)

6%*** 5.5%*** RM5 perperson

5.5%

* From 1 January 2011, the rate reverted to 11%. From 1 January 2009 to 31December 2010, the rate was 8% with option to contribute at 11%.

** Not required to contribute to EPF, but can elect to contribute.*** Exceptions:

EPF monthly rate of contributions is maintained at 12% (employer’s share)and 11% (employee’s share) under the following circumstances:i. Employees who have attained the age of 55 years before 1 February

2008 and have not made 55 years withdrawal before 1 February 2008;ii. Employees who have made 55 years withdrawal before 1 February 2008

and have elected to re-contribute to EPF before 1 February 2008.

Effective 3 January 2010, the 1Malaysia Retirement Saving Scheme wasintroduced to allow self employed and individuals without fixed monthlyincome to contribute voluntarily based on the amount that they canafford.

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Members’ accounts

Effective 1 January 2007, the EPF account is divided into 2 parts:% of contributions

Account I - for retirement purposes at age 55 70

Account II - for housing, education, medicaland withdrawal at age 50

30

WithdrawalsEPF members are entitled to withdraw the full amount of contributions:- upon the death of the member (withdrawal made by beneficiary(ies));- on attaining the age of 55 years;- if the member is prevented from engaging in any further employment

by reasons of physical or mental incapacitation;- for those expatriates/foreign workers who have contributed under the

mandatory obligation which has been abolished with effect fromAugust 2001;

- on leaving Malaysia permanently (for non-Malaysian or Malaysiancitizens who have revoked or renounced their citizenships);

Under Account 2, members are entitled to withdraw for:- the purchase or construction of a residential house or for purposes of

reducing a housing mortgage on satisfying the prescribed conditions;- on attaining the age of 50 years;- purchase of a second house on condition that the first house is sold;- reduction or settlement of housing loan balance;- for housing loan repayment (withdrawal on a monthly basis) for one

house;- setting aside part of savings to enable member to obtain a higher

housing loan amount under the flexible housing withdrawal scheme;- further education for self and children’s tertiary education;- medical expenses incurred for the treatment of critical illnesses for

themselves and their families;

Alternatively, members may choose to withdraw under the “RetirementPeriodical Payment Scheme” upon reaching the age of 55 years.Withdrawal payment can be made in part lump sum and part monthlyperiodical payment or monthly periodical payments for all savings.

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EMPLOYMENT GUIDELINES

Members at any time before reaching 55 years can make the withdrawalfrom savings exceeding RM1 million, subject to a minimum of RM50,000at every interval of 3 months.Members who have reached 55 years and have not withdrawn all of theirsavings, can withdraw the annual dividend of their savings.

Effective 1 February 2008, members can invest not more than 20%,(subject to minimum withdrawal of RM1,000 at 3 months interval) of theircredit in excess of Basic Savings in Account 1 in approved externalfunds. The required Basic Saving in Account 1 varies according to age,ranging from a minimum of RM1,000 for members at age 18 toRM120,000 at age 55.


Guidelines for employment of expatriatesApprovals for expatriate posts are given by different authorized bodies oragencies depending on the type of core business of the company. TheMalaysian Investment Development Authority (MIDA) approvesexpatriate posts in the following fields:ManufacturingManufacturing related services – Regional Office, OHQ, IPC,

Overseas Mission, etcHotel and tourism industryResearch and Development

The guidelines on employment of expatriate personnel issued by MIDA,are as follows:

For manufacturing companies with foreign paid up capital of:(a) USD2 million and above:

- Automatic approval for up to 10 expatriate posts including 5 keyposts, (top management post) for durations of up to 10 years forexecutive posts and 5 years for non-executive posts.

(b) above USD200,000 but less than USD2 million:- Automatic approval for up to 5 expatriate posts including at least

1 key post (top management post), for durations of up to 10years for executive posts and 5 years for non-executive posts.

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(c) less than USD200,000:- Consideration is given (based on merits of each case) for key

posts where foreign paid-up capital is at least RM500,000.Time/Term posts can be considered for up to 10 years forexecutive posts requiring professional qualifications andexperience and 5 years for non-executive posts that requiretechnical skills and experience.

For Malaysian-owned manufacturing companies:- Approval is given upon request (application), for employment of

expatriates for technical posts, including R&D posts.

Other approving agencies for expatriate post:Multimedia Development Corporation (MDeC) - for expatriate posts

and skilled workers in IT based companies with MSC statusPublic Service Department (PSD) – doctors and nurses in government

hospitals and clinics; lecturers and tutors in government institutions ofhigher learning; contract posts in public services and jobs offered byPublic Service Commission or related government agencies

Central Bank Malaysia (BNM) – posts in banking, finance andinsurance sectors

Securities Commission (SC) – employment in Security and Sharemarket

Expatriate Committee (EC) – employment in sectors other than theabove

The employment of Malaysian nationals at all levels should, whereverpossible, reflect the multi -racial composition of the country.

The following minimum paid-up share capital requirement must befulfilled before an application of expatriate position can be processed bythe EC:

RM100% Malaysian owned company 250,000

Malaysian and Foreign owned company 350,000

100% Foreign owned company 500,000

On 15 July 2010, the Immigration Department announced that automaticapproval will be given for expatriates with salaries of more than RM8,000

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EMPLOYEE’S SOCIAL SECURITY FUND

per month. Applications must be made to the Director of EmploymentPass Unit.

Employment of foreign workersEmployment of foreign workers is subject to conditions which aredetermined from time to time and will be considered after failing to findqualified local or permanent residents.Employment of foreign workers are allowed in the manufacturing,construction, plantation, agricultural, domestic help sectors and 3services sub sectors i.e. restaurants, cleaning and sanitation, resortisland.

Nationals from the following countries are allowed to work in thespecified sectors:Nationals of Approved SectorIndonesia (female only) ,

Cambodia, Laos, Myanmar,Nepal, Pakistan, Philippines (maleonly), Sri Lanka, Thailand,Vietnam, Turkmenistan,Uzbekistan, Kazakhstan

Manufacturing, construction,plantation, agricultural andservices sectors)

Indonesia (male only) Same as above excludingmanufacturing

India Services (restaurant only);Construction (fixing of highvoltage cable only);Agriculture; and Plantation

An annual levy is imposed on employers of foreign workers. The rate oflevy varies according to the category of worker.

The One Stop Centre in the Ministry of Home Affairs handlesapplications for foreign workers except for application for domestichelpers which are processed by the Immigration Department.

EMPLOYEES’ SOCIAL SECURITY FUND

Scope of SOCSOThe Social Security Organisation (SOCSO) administers the followingschemes:

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HUMAN RESOURCES DEVELOPMENT FUND (HRDF)

Employment Injury Insurance Scheme;Invalidity Pension Schemes.

These schemes are aimed at providing cash and medical benefits toemployees in case of temporary or permanent disablement/invalidity,death and employment injury, including occupational diseases.

All employees with monthly wages of RM3,000 or less are covered bythe schemes. Any employee falling within the schemes will continue toremain within the schemes notwithstanding that his or her monthlywages may subsequently exceed the threshold of RM3,000.

Rates of contributions

The rates of contributions are as follows:The first category (Employment Injury Insurance Scheme and Invalidity

Pension Scheme) of contribution is by both the employer andemployee, restricted to a maximum of RM51.65 and RM14.75respectively.

The second category (Employment Injury Insurance Scheme only) ofcontribution is solely by the employer for an employee who is noteligible for coverage under the Invalidity Pension Scheme, restricted toa maximum of RM36.90.

Employees who earn more than RM3,000 and who have neverregistered nor contributed may choose to register and contribute,provided that both employer and employee are agreeable.

HUMAN RESOURCE DEVELOPMENT FUND (HRDF)

Scope of HRDFThe HRDF is aimed at helping the manufacturing, services andtransportation sectors to develop the technical skills of their employeesthrough involvement in training schemes.Employers engaged in the following activities must register andcontribute to the HRDF:

Type of activity No. of employeesManufacturing 50 or moreManufacturing with a paid-up capital

of RM2.5 million or more10 to 49

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HUMAN RESOURCES DEVELOPMENT FUND (HRDF)

Type of activity No. of employeesManufacturing with a paid-up capital of

less than RM2.5 million10 to 49*

Service sector(hotel industry, air transport services,tour operators and travel agencies,telecommunications, freight forwardersshipping, postal/courier services,advertising, computer services,energy, training, higher education,direct selling, port services,engineering support and maintenanceservices, research & development,warehousing services, securityservices, private hospital services)

10 or more

Service sector(hypermarket, supermarket anddepartmental store services)

50 or more

* Such employers have the option to contribute to the HRDF at the rate of 0.5% ofthe employees’ monthly wages.

Rate of contribution

Up to 31 March2009

- 1% of employees’ monthly wages ona monthly basis.

1 April 2009 to 31March 2011

- 0.5% for all employers (except foremployers in industries below);

- employers in textile, electrical andelectronic industries exempted fromlevy payment for 6 months from 1February 2009. From 1 August 2009to 31 March 2011, levy to be paid atthe rate of 0.5%.

- small employers in manufacturingsector exempted from levy paymentfor this period.

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FOREIGN EQUITY GUIDELINES

Financial assistance

An employer who has paid the levy upon registration is eligible to receivefinancial assistance at rates ranging from 50% to 100% of the allowablecosts incurred for the purpose of training employees under varioustraining schemes including the following:

- SBL (Skim Bantuan Latihan) and Special SBL Scheme;- PROLUS (Program Latihan yang Diluluskan);- PLT (Pelan Latihan Tahunan);- PERLA (Perjanjian Latihan Dengan Penyelia Latihan);- Computer-based training Scheme (Software Development);- Apprenticeship Training Schemes;- Joint Training Scheme;- Information Technology and Computer-Aided Training;- Purchase of Training Equipment and Setting Up of Training Room

Scheme;- English Language Programs for workers under the HRDF;- SME On-The-Job Training;- SME Training Partners Scheme (SMETAP);- Accreditation of Prior Achievement scheme (APA).


Manufacturing sectorEquity holdings in all manufacturing projects is fully liberalised effectivefrom 17 June 2003. Foreign investors can hold 100% equity in allinvestment in new projects and investments in expansion ordiversification projects by existing companies. This is regardless of thelevel of export and without any product/activity being excluded.

However, any equity and export conditions imposed on companies priorto 17 June 2003 will be maintained. There will be some flexibility givenand companies can request for removal of these conditions dependingon the merit of each case.

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Other sectors

Prior to 30 June 2009, under the revised Guidelines For The Acquisitionof Interests, Mergers and Take-overs by Local and Foreign Interests,issued by the Foreign Investment Committee (FIC) which took effectfrom 1 January 2008, a basic condition that must be complied with isBumiputra equity of at least 30%, with the remaining equity allowed to beheld by either foreign or local interests or jointly by foreign and localinterest. However, on 30 June 2009, the Prime Minister announced thatthe Guideline was repealed with effect from that date.

Liberalisation measures

The following liberalization measures were announced by the PrimeMinister in 2009:

22 April 2009 - Liberalization of 27 services sub-sectors, with no equitycondition imposed. These sub-sectors are in the area of health andsocial services, tourism services, transport services, business servicesand computer and related services.

29 April 2009 - Further liberalization of the financial services sector,including raising the limit on foreign equity ownership of investmentbanks, Islamic banks, insurance companies and takaful operators from49% to 70%.

30 June 2009 - Repeal of the FIC Guideline with effect from that date.However any equity conditions forming part of the licensingrequirements imposed by the relevant sector regulators will stillremain. The government’s target of 30% Bumiputra equity ownershipwill now be maintained at the macro level instead of the equityownership at firm level.With respect to listing requirements, the requirement to have direct30% Bumiputra equity upon floatation as imposed by the SecuritiesCommission has similarly been abolished. However, the percentage ofthe allocation of the 25% public spread to the list of Bumiputrainvestors recognised by the Ministry of International Trade andIndustry (MITI) has been increased from 30% to 50%.

88

EXCHANGE CONTROL

EXCHANGE CONTROL

Remittances abroad

A resident is freely permitted to:Make payment in Ringgit* to non-residents(i) for import of goods & services, payment for services, profits,

dividends, fees, rental and royalties, purchase of ringgit assets;(ii) for payment to non-resident immediate family members (for any

purpose); or(iii) for extension of credit facilities in Malaysia to non-resident

individuals and non-bank companies to finance activities in thereal sector in Malaysia or to refinance the purchase orconstruction of residential and commercial properties in Malaysia(excluding land).

*provided the Ringgit is sourced from the sale of foreign currency with alicensed onshore bank or from ringgit funds in External accounts)

Make payment in foreign currency to non-residents(i) for import of goods & services, payment for services, profits,

dividends, fees, rental and royalties, purchase of Ringgit asset;or

(ii) for payment to non-resident immediate family members (for anypurpose).

Investments abroad in foreign currency assets and extension ofcredit facilities in foreign currency in Malaysia are however subject tothe rules for investment in foreign currency assets, i.e:- a resident without domestic Ringgit credit facilities is free to invest

any amount abroad;- to invest any amount abroad from conversion of Ringgit up to

RM50 million per annum (on corporate group basis) forcorporations with domestic credit facilities. No limit if funded byown foreign currency funds maintained onshore or offshore orwhere prudential requirements (defined) are met and writtenpermission is given by Bank Negara Malaysia;

- to invest any amount abroad from conversion of Ringgit up to RM1million per annum for individuals with domestic credit facilities. Nolimit if funded by own foreign currency funds maintained onshoreor offshore.

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EXCHANGE CONTROL

Hedge with licensed onshore banks to buy or sell foreign currencyagainst Ringgit or another foreign currency to make payment to non -resident for the purpose of:- international trade in goods and services;- hedging foreign currency exposure of permitted investment

abroad;- committed capital inflow or outflow of funds.

Prior permission of the Controller of Foreign Exchange (Controller) isrequired for a resident:- to pay in Ringgit to a non-resident for international trade in goods

and services if settlement is not through the non-resident'sexternal account;

- to make payment to a non-resident for any derivative products orfutures not transacted at an exchange in Malaysia;

- to convert Ringgit into foreign currency exceeding RM50 million(for companies)(with exceptions) and RM1 million (for individuals)per year for investment abroad. This applies to companies andindividuals with domestic borrowings. Companies and individualswith no domestic borrowings are free to invest abroad;

- to make payment in foreign currency to another resident, otherthan:o payments for education or employment overseas;o resident individuals who are immediate family members;o repayment of foreign currency credit facilities from licensed

banks or merchant banks;o payments for futures denominated in foreign currency traded on

MDEX;o payments to purchase approved foreign currency investment

products offered onshore;o payments by all International Islamic banks, International Takaful

Operators and International Currency Business Units of licensedonshore banks, takaful operators or retakaful operators forfinancial services rendered by resident intermediaries to theseinstitutions;

o payments to a resident company for settlement of goods andservices whereby the funds are sourced from export earnings inthe resident payer's foreign account;

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EXCHANGE CONTROL

Prior permission is also required for:- payments to Israel;- a resident traveler to export Ringgit notes exceeding RM1,000 and

foreign currency (including traveller’s cheques) exceeding theequivalent of USD10,000;

- a non-resident traveller to export Ringgit notes exceeding RM1,000and foreign currency exceeding the amount of foreign currencybrought into Malaysia upon his leaving Malaysia, or USD10,000whichever is higher.

Non-resident controlled companiesA non-resident controlled company (i.e. a corporation, company orbranch operating in Malaysia, controlled directly or indirectly by non-residents) is permitted to:- obtain short term trade financing of any amount in Ringgit or foreign

currency; and- obtain domestic credit facilities locally without having to seek specific

permission from the Controller.

Purchase of immoveable properties by non-residentsNon-residents may borrow domestically for financing properties used forproductive (real) activities such as manufacturing.

Non-residents are permitted to borrow any number or amount of Ringgitcredit facilities from residents (banks and non-banks) to finance thepurchase or construction of any residential or commercial property inMalaysia (excluding financing for purchase of land only).

Borrowings in foreign currency by a residentA resident company is free to:borrow any amount in foreign currency from its non-resident non-bank

related companies, resident related companies, licensed onshorebanks and licensed International Islamic Banks.However, where the non-resident non-bank related company is set upsolely to obtain foreign currency loans from a non-resident financialinstitution, the amount of borrowing from the non-resident non-bankrelated company continues to be subject to the prevailing aggregatelimit of RM100 million equivalent from non-residents.

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EXCHANGE CONTROL

procure from non-resident suppliers, any amount of foreign currencysupplier’s credit for capital goods.

obtain up to RM100 million equivalent in aggregate by a residentcompany on a corporate group basis for other financing activities.

A resident individual is free to:borrow up to RM10 million equivalent in aggregate for any purpose

including financing overseas investments.

Both a resident company and resident individual are free to refinanceoutstanding approved borrowing in foreign currency (including principaland accrued interest)

Borrowings in Ringgit by a resident

A resident company is allowed to borrow in Ringgit, including theissuance of Ringgit-denominated redeemable preference shares or loanstocks:- of any amount from its non-resident non-bank related company to

finance activities in the real sector in Malaysia;- up to RM1 million in aggregate from other non-resident non-bank

companies or individuals for use in Malaysia.

However where the non-resident non-bank related company is set upsolely to obtain foreign currency loans from a non-resident financialinstitution, the amount of borrowing from the non-resident non-bankrelated company continues to be subject to the prevailing aggregate limitof RM1 million on Ringgit borrowings from non-residents.

A resident individual is allowed to borrow in Ringgit up to RM1 millionin aggregate from non-resident non-bank companies and non-residentindividuals for use in Malaysia.

Foreign currency accounts

In general, a resident is allowed to open foreign currency accounts withlicensed onshore / Labuan / overseas banks for any purpose.A resident individual is allowed to maintain for any purpose, joint foreigncurrency accounts with another resident individual and also with a non-resident individual who is an immediate family member.As for a resident exporter, export proceeds must be credited into foreigncurrency accounts maintained with licensed onshore banks only.

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EXCHANGE CONTROL

There is no restriction on the maintenance of a foreign currency accountby a non-resident.

Non-resident accounts

Non-residents may maintain any number of external accounts with anyfinancial institution in Malaysia. Transfers of funds can be made betweenexternal accounts of the same account holder. There is no restriction onthe Ringgit funds to be retained in the external accounts.Sources of Ringgit funding for the external account can be from:proceeds from sale of foreign currency to a l icensed onshore bank,

Ringgit assets or goods and services to a resident;income earned in Malaysia, including salaries, wages, commissions,

fees, rental, interest, profits or dividends;drawdown proceeds or repayment of permitted Ringgit credit facilities;cash deposit of up to RM10,000 per day;deposits of cheques up to RM5,000 per cheque for any purpose;transfers from other external account(s) of the same account holder;transfers from external account and/or resident account of different

account holders by way of automated teller machine or internet-banktransfers not exceeding RM5,000 a day per bank.

Uses of funds in the account can be for the following purposes:-purchase of foreign currency (excluding the currency of Israel) from

licensed onshore banks;payment to a resident for own account for:

- purchase of Ringgit assets or payment for goods and services;- payment of administrative and statutory expenses incurred in

Malaysia;- settlement of a permitted Ringgit-denominated financial or non-

financial guarantee;- granting, servicing or repayment any permitted Ringgit credit facility.

payment to another non-resident for:- purchase of Ringgit assets;- granting, servicing or repayment of any permitted Ringgit credit

facility;- any amount of cash withdrawals.

Ringgit funds in the External Account may be converted into foreigncurrency, repatriated or used in Malaysia for permitted purposes.

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IMPORTANT FILING DATES

Exports from Malaysia

Resident exporters are required to submit quarterly reports on theirexport related transactions if the gross export proceeds exceed RM50million per year.

MSC Malaysia companies

MSC Malaysia companies are exempted from the exchange controlrequirements by the Controller. However, such exemptions do notextend to dealings with Israel.

Approved Operational Headquarters (OHQ)

OHQ with domestic Ringgit credit facilities are allowed to convert Ringgitinto foreign currency up to RM50 million per calendar year forinvestments in foreign currency assets. No limit if foreign currencyassets are funded with own foreign currency funds or where prudentialrequirements (defined) are met.

IMPORTANT FILING DATESType of return Form Due dateIncome taxAll taxpayers

- notification of change ofaddress

No prescribedform

Within 3 months ofchange.

Individual (without business income)- submission of income

tax return- Resident- Non-resident

Form BEForm M

By 30 April in theyear following thatyear of assessment.

- notification ofchargeability of anindividual who firstarrives in Malaysia

No prescribedform

Within 2 months ofdate of arrival

Individual (with business income)- submission of income

tax returnForm B By 30 June in the

year following thatyear of assessment.

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Type of return Form Due dateCompany

- submission ofestimate of taxpayable

- submission ofrevised estimateof tax payable

- submission ofincome tax return

- submission ofsection 108statement

Form CP 204

Form CP 204A

Form C

Form R

30 days before thebeginning of the basisperiod.In the sixth or/and ninthmonth of the basisperiod.Within 7 months fromthe date following theclose of its accountingperiod.Within 7 months fromthe date following theclose of its accountingperiod.

Co-operativesociety- submission of

income tax return

Form C1 Within 7 months fromthe date following theclose of its accountingperiod.

Partnership- submission of

income tax returnForm P By 30 June in the year

following that year ofassessment.

Trust Body- submission of

income tax returnForm TA Within 7 months from

the date following theclose of its accountingperiod.

Estate and Body ofPersons- submission of

income tax return

Form TP/TF By 30 April (withoutbusiness income) or 30June (with businessincome) in the yearfollowing that year ofassessment.

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Type of return Form Due dateUnit Trust

- submission of incometax return

Form TC Within 7 monthsfrom the datefollowing the close ofits accountingperiod.

Real Estate InvestmentTrust/ Property Trust Fund

Form TR Same as above.

Employer- return of remuneration

by an employer

- notification ofemployee’scommencement ofemployment

- notification ofemployee’s cessation ofemployment (in certainprescribed cases)

- notification of employeeleaving Malaysia formore than 3 months

- statement of taxdeduction by employerunder Monthly TaxDeduction Scheme

Form E

Form CP 22

Form CP 22A

Form CP 21

Form CP 39

By 31 March of thefollowing year (fromyear ending 31December 2009).Within one month ofcommencement ofemployment.

Not less than onemonth beforecessation.

Not less than onemonth beforeexpected date ofdeparture.Within 10 days aftermonth end.

Withholding taxOn interest or royalty to

non-residentsForm CP 37 Within one month of

paying or creditingthe non-resident,whichever is earlier

On contract payments tonon-resident contractors

Form CP 37A Same as above

96


Type of return Form Due dateOn technical and

management service fees,rental of moveable properties,etc. to non-residents

Form CP37D

Same as above

On technical andmanagement services fees,rental of moveable properties,etc. to non-residents carryingout activities in the JointDevelopment Area

Form CP37D (1)

Same as above

On Real Estate InvestmentTrust income exempted at theTrust level distributed to unitholders (other than residentcompanies)

Form 37E Within one monthof distributingincome to the unitholders.

On payments to a non-resident person in relation toany gains or profits fallingunder Section 4(f)

Form 37F Within one month ofpaying or creditingthe non-resident,whichever is earlier.

Sales taxSubmission of tax return Form CJP 1 Within 28 days

after end of eachtaxable period.

Service taxSubmission of tax return Form CJP 1 Within 28 days

after end of eachtaxable period.

Social Security Organisation(SOCSO)Submission of remittance

formForm 8A Not later than last

day of thefollowing month.

Employees’ Provident FundSchedule of Monthly

contributions together withcheque

EPF 6(Form A)

Within 15 daysafter month end,each month

Telephone/Telecopier

Telephone: [60] (3) 2173 1188Telecopier: [60] (3) 2173 1288





Telephone: [60] (82) 41 3957/8Telecopier: [60] (82) 41 2644

Telephone: [60] (87) 42 2088[60] (87) 42 1618Telecopier:[60] (87) 42 2198

Mail Address

PO Box 1019250706 Kuala Lumpur

PO Box 85610810 Pulau Pinang

PO Box 13630710 IpohPerak

PO Box 14075720 Melaka

PO Box 29680730 Johor BahruJohor

PO Box 286493756 KuchingSarawak

Level 13F, Main Office TowerFinancial Park LabuanJalan Merdeka87000 Wilayah Persekutuan Labuan

Tax Contacts

Khoo Chuan KeatTelephone: [60] (3) 2173 1188

Tony ChuaTelephone: [60] (4) 238 9188

Tony ChuaTelephone: [60] (4) 238 9188

Teh Wee HongTelephone:[60] (3) 2173 1188Au YongTelephone:[60] (6) 283 6169

Lorraine YeohTelephone:[60] (3) 2173 1188Norafiza Abdul Rahman Telephone: [60] (7) 222 4448

Phan Wai KuanTelephone: [60] (3) 2173 1188Christine ChengTelephone:[60] (82) 41 3957/8

Jennifer ChangTelephone: [60] (3) 2173 1188

Visit our website at http://www.pwc.com/my

Kuala LumpurLevel 10, 1 SentralJalan TraversKuala Lumpur Sentral50470 Kuala Lumpur

Pulau Pinang16th Floor,Bangunan KWSPJalan Sultan Ahmad Shah10050 Pulau Pinang

IpohStandard Chartered Bank Chambers1st Floor, 21-27 Jalan Dato’ Maharaja Lela30000 Ipoh Perak Darul Ridzuan

MelakaLevel 15-1, Tower BJaya 9999, Jalan Tun Sri Lanang75100 Melaka

Johor BahruMenara AnsarLevel 16, Jalan Trus80000 Johor Bahru Johor Darul Takzim

KuchingBangunan BINAMAS9th FloorJalan Padungan93100 Kuching, Sarawak

LabuanLevel 13F, Main Office TowerFinancial Park LabuanJalan Merdeka87000 Wilayah Persekutuan Labuan

PricewaterhouseCoopers in Malaysia

www.pwc.com/my

© 2011 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” and/or “PwC” refers to the individual members of the PricewaterhouseCoopers organisation in Malaysia, each of which is a separate legal entity.

pwc tax book 2012

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