The Inland Revenue Board of Malaysia (LHDN) has released a draft Public Ruling on income tax incentives for the agricultural sector, specifically a tax exemption for approved food production projects.
This consultation invites feedback from stakeholders before the ruling is finalised.
The primary purpose is to seek views on matters related to the conditions and procedures for companies engaged in agricultural activities to claim income tax exemptions under Paragraph 127(3)(b) of the Income Tax Act 1967.
LHDN has stated that comments received will be considered and may be made public.
All interested parties, such as agricultural companies and farmers, are encouraged to provide input on the draft by 8 August 2023 to [email protected].
This will help shape a comprehensive Public Ruling to facilitate availing of tax incentives meant to spur growth in the strategic agricultural sector.
The key points are:
- It outlines the income tax exemptions available for companies engaged in agricultural activities under Paragraph 127(3)(b) of the Income Tax Act 1967.
- It specifies the conditions to be fulfilled by companies to qualify for the tax exemption.
- It explains the application process and procedures to claim the income tax exemption.
- It clarifies how the tax exemption will be applied during the tax-exempt period.
- It covers the tax treatment for losses and surrender of the tax exemption.
In summary, this draft Public Ruling by LHDN aims to guide agricultural companies/farmers on the income tax exemptions available to them and the process to claim the incentives.
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