Deduction for Expenditure Incurred for Provision of Approved Internship Programme) (Amendment) Rules

The Ministry of Finance, exercising the powers conferred by paragraphs 154(1)(b) and 33(1)(d) of the Income Tax Act 1967 [Act 53], hereby announces the amendment of the Income Tax (Deduction for Expenditure Incurred for Provision of Approved Internship Programme) Rules 2019 (which are referred to as the “principal Rules”).

These amended rules shall be known as the Income Tax (Deduction for Expenditure Incurred for Provision of Approved Internship Programme) (Amendment) Rules 2023 [PU(A) 188_2023].

The amended rules shall come into effect from the year of assessment 2022.

The key amendments to the principal rules are as follows:

Amendment of rule 2:

Paragraph 2(b) of the principal rules is amended to substitute the words “the year of assessment 2021” with the words “the year of assessment 2025.”

Amendment of rule 3:

Rule 3 of the principal rules is amended as follows:

1. The definition of “higher educational institution” is amended to substitute the words “the Ministry of Education, Malaysia” with the words “the Ministry of Higher Education, Malaysia or educational institution outside Malaysia which is recognised by the Ministry of Higher Education, Malaysia.”
2. The definition of “qualified course” is amended to specify a technical and vocational education and training program (minimum Malaysian Skills Certificate Level 1) or its equivalent offered in or outside Malaysia and is recognised by the Malaysian Qualifications Agency or the Department of Skills Development.
3. The definition of “student” is amended as follows:
   1. Sub-subparagraph (b)(i)(A) is amended to substitute the words “a diploma or degree” with the words “a diploma, Bachelor’s degree or Master’s degree or its equivalent, or a professional certificate.”
   2. Sub-subparagraph (b)(i)(B) is amended to substitute the words “his diploma or degree” with the words “his diploma, Bachelor’s degree or Master’s degree or its equivalent, or a professional certificate.”
4. The definition of “approved internship programme” is amended to substitute the words “the Ministry of Education, Malaysia” with the words “the related Ministry.”

Amendment of rule 4:

Rule 4 of the principal rules is amended as follows:

1. Subrule (2) is amended to:
   1. Substitute paragraph (a) with the following:
      1. payment of the internship monthly allowance to—
         1. a student of Malaysian Skills Certificate Level 1 until 4 or diploma level or its equivalent, of not less than five hundred ringgit; or
         2. a student of Malaysian Skills Certificate Level 5 or Bachelor’s degree or Master’s degree or its equivalent, or professional certificate level, of not less than six hundred ringgit.
   2. Delete the word “and” at the end of paragraph (b).
   3. Substitute the full stop at the end of paragraph (c) with the words “; and.”
   4. Insert after paragraph (c) the following paragraph: “(d) expenditure incurred for digital and communication costs.”
2. Subrule (3) is amended to substitute the words “paragraphs 2(b) and (c)” with the words “paragraphs 2(b), (c), and (d).”

These amendments aim to enhance and clarify the provisions related to the deduction for expenditure incurred for the provision of approved internship programs under the Income Tax Act.

For more detailed information, please refer to the Income (Deduction for Expenditure Incurred for Provision of Approved Internship Programme) Rules 2019.

References:-

Deduction for Expenditure Incurred for Provision of Approved Internship Programme) (Amendment) Rules 2023 [PU(A) 188_2023]

Income (Deduction for Expenditure Incurred for Provision of Approved Internship Programme) Rules 2019 [PU(A) 398_2019]

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