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Double Tax Deduction for Expenditure in relation to Industry4WRD Vendor Development Program

Updated: Jun 11


107
.1 PUA 172 (2022) - Income Tax (Deduction for Expenditure in relation to Industry4WRD V
Download 1 PUA 172 (2022) - INCOME TAX (DEDUCTION FOR EXPENDITURE IN RELATION TO INDUSTRY4WRD V • 446KB

What Is the 4th Industrial Revolution (4IR)?

What exactly is meant by the phrase "the Fourth Industrial Revolution," and why should you be concerned about it?


The convergence of the physical, digital, and biological worlds are referred to as the "Fourth Industrial Revolution," and it is a term that has been used to describe this phenomenon.


It is a combination of recent developments in Artificial Intelligence (AI), robots, the Internet of Things (IoT), machine to machine (M2M), genetic engineering, quantum computing, and other technology areas. It is the conglomerate force underlying many different products and services that are rapidly becoming essential to modernity.


Think of GPS systems that suggest the quickest route to a destination, voice-activated virtual assistants such as Apple's Siri, personalised Netflix recommendations, and Facebook's ability to recognise your face and tag you in a photo taken by a friend.


All of these technologies are examples of the advancements in artificial intelligence that are currently available.



Income Tax (Deduction for Expenditure in relation to Industry4WRD Vendor Development Programme) Rules 2022

It was suggested in Budget 2019 that anchor companies that develop local vendors will be granted a double deduction on expenses paid in the implementation of the Industry4WRD Vendor Development Programme.


This is in support of the aims and goals that have been set forth by Industry4WRD.


As a result of this,

On 30 May 2022, the Minister, in the exercise of the powers conferred by paragraph 154(1)(b) read together with paragraph 33(1)(d) of the Income Tax Act 1967 [Act 53], gazetted the Income Tax (Deduction for Expenditure in relation to Industry4WRD Vendor Development Programme) Rules 2022 and is effective from YA 2019.
[P.U (A) 172].
Industry4WRD (Industry Forward) Vendor Development Programme

The Industry4WRD (Industry Forward) Vendor Development Programme is a programme certified by the Ministry of International Trade and Industry (MITI) to be implemented by an anchor company in developing a vendor company as specified in the Guideline for The Implementation of Industry4WRD Vendor Development Programme issued or as revised by the ministry and approved by the Minister.


According to the Rules, an anchor company is eligible for a double deduction for any qualified operating expenditures that it incurs, up to a maximum of MYR 1 million per year, for a period of three consecutive years of assessment.


Double Tax Deduction The following types of Qualifying expenditures are eligible for a double deduction if a Qualified Anchor Company incurred them:

  1. Activities concerning Product Development, specifically product quality upgrading, product innovation, or research and development;

  2. Activities concerning Capability Upgrading, specifically certification programme, assessment programme, or business process re-engineering; or 

  3. Activities concerning Human Capital, specifically hard skill training, lean management system, financial management practice, or capacity upgrading.

Capital Expenditures on the plant, machinery, fixtures, land, premises, buildings, structures, or works of a permanent nature, or on alterations, additions, or extensions thereof, or in the acquisition of any rights in or over any property, incurred by the anchor company, do not count as qualifying expenditures.

Vendor Company

means a company:-


  • which is incorporated or deemed to be registered under the Companies Act 2016;


  • which is resident in Malaysia;


  • which engages in manufacturing or manufacturing-related services sector; and


  • which fulfils other conditions as specified in the Guideline for The Implementation of Industry4WRD Vendor Development Programme issued or as revised by the ministry charged with the responsibility for international trade and industry and approved by the Minister.

Qualified Anchor Company means Anchor Company which is :
  1. incorporated under the Companies Act 2016 [Act 777];

  2. resident in Malaysia;

  3. engages in manufacturing or manufacturing-related services sector;

  4. holds a business license issued by the relevant local authority and a manufacturing license issued by the Ministry of International Trade and Industry (MITI), if relevant;

  5. has been in operation for a period of at least 36 months;

  6. participates in the Industry4WRD Vendor Development Programme;

  7. fulfils other conditions as specified in the Guideline for The Implementation of Industry4WRD Vendor Development Programme.

This incentive is eligible for memorandums of understanding executed between anchor companies and the MITI between January 1, 2019, and December 31, 2021.

107.2 National 4IR Policy
.pdf
Download PDF • 2.58MB

107.3 Industry 4WRD
.pdf
Download PDF • 15.14MB


第四次工业革命

第四次工业革命 (4IR) 指的是从18世纪工业革命开始后进入的第四个阶段,它被描述成各种科技的融合,而融合的过程因使得物理、数位和生物等领域科技之间界线难分,故统称为 网宇实体系统


第四次工业革命,是以石墨烯、基因工程、虚拟现实、量子信息技术、可控核聚变、清洁能源以及生物技术为技术突破口的工业革命,5G并不算第四次工业革命。


各种新兴科技的突破为其特征,如机器人学人工智能纳米科技量子电脑生物科技物联网工业物联网(IIoT)、分散式共识5G增材制造/3D打印全自动驾驶汽车


世界经济论坛的执行董事长克劳斯·施瓦布认为就数字化和人工智能对全球经济的影响来看,第四次工业革命和第二次机器时代息息相关,但他认为生物科技的进步在前者占有着更广泛的角色。


这些科技扰乱了每一个国家几乎所有的产业,而这些改变的深度和广度则带来了整个生产、管理和治理系统的转型。


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