The Income Tax (Exemption) (No. 8) Order 2021 [P.U. (A) 284/2021] was amended by the Income Tax (Exemption) (No. 8) Order 2021 (Amendment) Order 2024 [P.U. (A) 109/2024].
The amendment order was made on 8 March 2024 and has effect from the year of assessment 2024.
The key changes introduced by the amendment order are:
1. Extension of exemption period:
The exemption period for qualifying companies providing fund management services to foreign investors in Malaysia has been extended.
The original order provided the exemption from the year of assessment 2021 until the year of assessment 2023.
The amendment order extends this period until the year of assessment 2027.
2. Reduction of exempted statutory income:
A new subparagraph 3(2A) has been inserted, which states that the statutory income derived from the business of providing fund management services that qualifies for the exemption shall be sixty percent of the statutory income.
This effectively reduces the amount of income exempted from tax for qualifying companies.
Advice to taxpayers:
Companies providing fund management services to foreign investors in Malaysia and meeting the conditions specified in the original order can continue to enjoy the income tax exemption on the statutory income derived from such services until the year of assessment 2027.
However, from the year of assessment 2024 onwards, only sixty percent of the statutory income from the qualifying business will be exempt from tax.
Companies should ensure that they continue to meet the conditions set forth in the original order, such as obtaining the annual certification from the Securities Commission Malaysia, having the required number of full-time employees in Malaysia, and incurring the specified minimum annual operating expenditure.
It is also important to maintain proper records and separate accounts for the exempt income as required under the original order. References:-
Income Tax (Exemption) (No. 8) Order 2021 (Amendment) Order 2024 [P.U. (A) 109/2024]
Income Tax (Exemption) (No. 8) Order 2021 [P.U. (A) 284/2021]