MSC Malaysia Bill of Guarantees
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| Go back to 'Why MSC Malaysia Status' page | |
| Bill of Guarantee No. 5: To provide competitive financial incentives, including Pioneer Status (100 percent tax exemption) for up to ten years or an Investment Tax Allowance for up to five years and no duties on the importation of multimedia equipment |
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Policy Objective
To realise the vision for Malaysia to be a major global ICT hub, the Government recognises that the offer of financial incentives will encourage the accelerated growth of MSC Malaysia Status entities and enhance the competitiveness of their products and services. |
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Interpretation
Generally, MSC Malaysia Status entities are given income tax incentives under the Promotion of Investments Act 1986. Under the Act, an Malaysia Status entity may choose to enjoy one of the following tax incentives: |
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- Pioneer Status: 100 percent exemption on taxable statutory income for a period of up to 10 years (renewable after the expiry of the first 5 years, subject to compliance with terms and conditions, and relevant laws,); or
- Investment Tax Allowance: 100 percent deduction of qualifying capital expenditure against the taxable statutory income, for capital expenditure made during the first 5 years of its operation (for qualifying capital expenditure, please refer to the Promotion of Investments (Determination of Assets Under Section 29B in Respect of MSC Status Companies) Order 2001 [PU(A) 50/2001]).
The grant and enjoyment of income tax incentives, including the application process, the criteria and conditions to be met and the withdrawal, cancellation and renewal process, are governed and regulated by the relevant laws.
Subject to the provisions under the Customs Act 1967 and the Sales Tax Act 1972, and such conditions as may be imposed by the Minister of Finance, the import by MSC Malaysia Status entities of multimedia equipment and components for direct use in the operation of their MSC Malaysia qualifying activities are exempted from import duties and sales tax.
The criteria to be met for such multimedia equipment and components are as follows:
- Multimedia / ICT equipment;
- Equipment is not available locally (ie. not locally manufactured);
- Equipment is not for trading;
- Equipment is "directly used" for MSC Malaysia qualifying activities; and
- The MSC Malaysia Status entity complies with the relocation requirement in its Conditions of Grant of MSC Malaysia Status.
To enjoy the exemption, MSC Malaysia Status entities are required to submit an application through MDeC.
Responsible Ministries / Agencies
- Ministry of Finance.
- Ministry of International Trade and Industry.
- Royal Malaysian Customs.
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