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    Ita - Irb

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    Kumpulan Dzb
    The document provides information about Investment Tax Allowance (ITA) in Malaysia. ITA provides tax exemptions for companies undertaking promoted activities or producing promoted products. Eligible capital expenditures are granted ITA at rates of 60-100% with the exempt amount restricted to a percentage of statutory income. Unabsorbed ITA can be carried forward. Examples show how ITA is calculated for companies with qualifying capital expenditures and their tax savings.

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    Ita - Irb

    Uploaded by

    Kumpulan Dzb
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    The document provides information about Investment Tax Allowance (ITA) in Malaysia. ITA provides tax exemptions for companies undertaking promoted activities or producing promoted products. Eligible capital expenditures are granted ITA at rates of 60-100% with the exempt amount restricted to a percentage of statutory income. Unabsorbed ITA can be carried forward. Examples show how ITA is calculated for companies with qualifying capital expenditures and their tax savings.

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    TAX

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    ITA - IRB.docx

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    The document provides information about Investment Tax Allowance (ITA) in Malaysia. ITA provides tax exemptions for companies undertaking promoted activities or producing promoted products. Eligible capital expenditures are granted ITA at rates of 60-100% with the exempt amount restricted to a percentage of statutory income. Unabsorbed ITA can be carried forward. Examples show how ITA is calculated for companies with qualifying capital expenditures and their tax savings.

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    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    79 views2 pages

    Ita - Irb

    Uploaded by

    Kumpulan Dzb
    The document provides information about Investment Tax Allowance (ITA) in Malaysia. ITA provides tax exemptions for companies undertaking promoted activities or producing promoted products. Eligible capital expenditures are granted ITA at rates of 60-100% with the exempt amount restricted to a percentage of statutory income. Unabsorbed ITA can be carried forward. Examples show how ITA is calculated for companies with qualifying capital expenditures and their tax savings.

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    Investment Tax Allowance www.hasil.gov.

    .my Promotions of Investments Act 1986 - Investment Tax Allowance Promoted Products or Activities Any company participating or intending to participate in a promoted activity or producing a promoted product may be eligible to apply for ITA. Similar lists of promoted products or activities as applied for pioneer status would also be applied for ITA. ITA and pioneer status are mutually exclusive in respect of the same promoted activity or product. The same activity or product which has been granted pioneer status or ITA previously cannot qualify for pioneer status or ITA again. Capital Expenditures Qualifying capital expenditure for the various sectors are defined in the PIA 1986.

    Benefits of Investment Tax Allowance The computation of ITA for a Year of Assessment is as follows :Rate of ITA Capital Expenditure Statutory Income (SI) (i) 60% multiply by capital expenditure restricted to 70% of SI = exempt income (ii) 80% multiply by capital expenditure restricted to 85% of SI = exempt income (iii) 100% multiply by capital expenditure restricted to 100% of SI = exempt income The exempt income is credited to the exempt account from where exempt dividends are distributed to the shareholders of the company. If the shareholders is a company` any dividends paid by that shareholding company to its shareholders out of that amount shall also be exempt from tax in the hands of those shareholders. Companies granted ITA can carry forward unabsorbed losses and capital allowances to subsequent years. An approvals for ITA may be granted retrospectively from a date which is not earlier than three years (or such dates) from the date of application.

    Rate of Allowance The table below lists out the rate of allowance` years of exemption and restriction to the statutory income for the different categories of companies.

    Companies and other particulars Project of National and Strategic Importance Project in Promoted Areas High Technology Company Contract R & D Company R & D Company In-House R & D Technical or Vocational Training Company Other Companies

    Period (years) 5 5 5 10 10 10 10 5

    Rate (% of qualifying expenditure) 100 80 60 100 100 50 100 60

    Restricted to % of Statutory Income 100 85 100 70 70 70 70 70

    Illustration on the workings of Investment Tax Allowance Example 1 Syarikat Smartnonics Sdn. Bhd. was granted ITA of 60% for producing a promoted product commencing from 1.1.1994. It closed its accounts on 31.12.1994 and incurred capital expenditure of RM50`000. Capital Allowance for Y/A 1995 is RM20`000 and disallowance expenses to be added back is RM10`000. Years of Assessment 1995 RM Net Profit 100`000 Add : Disallowable expenses 10`000 Adjusted income 110`000 Less : Capital allowance 20`000 Statutory income 90`000 (70% = Less :- ITA @ 60% of 50`000 63`000) Chargeable income 30`000 60`000 ===== Tax payable on 60`000 @ 30% = 18`000 Note : ITA to be fully allowed since the sum is less than the restricted sum of RM63`000 i.e. 70% of Statutory Income (RM 90`000). Example II Using same information as in Example I the company has incurred capital expenditure of RM200`000 for Y/A 1996. Year of Assessment 1996 Statutory income 90`000(70% = Less : ITA of 60% of 200`000 = 120`000 (subject to 70% of 63`000) 90`000 = 63`000) 63`000 Chargeable income 27`000 ===== Unabsorbed ITA c/f to Y/A 1997 (120`000 - 63`000) = RM57`000 RM8`100.00 Tax payable on RM27`000 @ 30% =========

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