10.7--SPECIFIC BUSINESS DEDUCTION UNDER
10.7.18—special deduction for scientific research expenditure (section 34a)
-DOUBLE DEDUCTION-
• SMEs and R&D expenditure
• Companies with paid up capital not exceed RM 2.5 million
• Expenditure up to RM 50,000for each YA
• Company required to submit the R&D project application to the IRB(this amendment effective for YA 2016-2018)
Inland Revenue Board guidelines on double deduction for research & development
• Research finding are useful to the country and studies
• Preferably by local researchers in Malaysia
• Research undertaken in a foreign country will be considered for a deduction if the facilities for such research activities are not available in Malaysia
Application procedure
• Until 1/1/1997 application for approval must submitted to the Malaysian Industrial Development Authority
• Now ,all application are approve by the IRB
10.7.19—CONTRIBUTION AND PAYMENT TO AN APPROVED RESEARCH INSTITUTE OR AN APPROVED RESERCH COMPANY (SECTION 34B)
• DOUBLE DEDUCTION GIVEN :
• Cash contribution to an approved research institute
• Payment for use of the service of an approved research institute or an approved research company
• Payment for the use of the services of a research and development company or a contact research and development company
10.7.20—special provision applicable to adjusted income from a discount or premium (section 34c)
• - Available on the non-financial institution(NFI’s)
• - Have a source of income consisting of discount or premium
• - IN ASCERTAINING THE ADJUSTED INCOME OF A COMPANY,DEEMED TO ACCRUE TO THE COMPANY OVER THE WHOLE PERIOD OF THE BOND AND THE AMOUNT TO BE DEDUCTED FROM THE GROSS INCOME SHALL BE SUM WITH THE FORMULA.
10.7.21—SPECIAL DEDUCTION FOR EXPENDITURE ON TREASURY SHARES (SECTION 34D)
• A company carrying on a business can deduct any expenses incurred in acquiring treasure shares:
• A company offering treasury shares to its employee(deduction on the net amount)
• A holding company transferring treasury share to an employee of its subsidiary has the right to acquire such share(deduction given to the subsidiary company instead of the holding company)
• the shares acquired at an earlier point are deemed to be transferred first
10.7.22-- stock in trade (section 35)
• the treatment of stock follows the generally accepted accounting treatment.
• the value of stock on hand at the beginning of a taxable period are same with the value at the end of the immediately preceding taxable period.
• the main valuation method is FIFO method
10.7.23 cost of moving to new premises
• all expenses that incurred by bussiness to move place of business to a new premise are allowable for deduction
• include cost of dismantling,reinstalling plant and machinery and fixtures and fittings.
• the expenses that incurred during transferring its operations to larger operations were held to be deductible
• however, the cost for dismantling and re-erection was disallowed
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10.7.24 --tax deduction for issuance of islamic securities
• expenses incurred in issuance under the principle of murabahah and bai’bithaman ajil
• sukuk(islamic bonds) had to be approved by the securities commission or the Labuan Financial Service Authority
10.7.25-- sustainable and responsible investment Sukuk
• valid from years assessment 2016-2020
• objective of sustainable and responsible investment (SRI) sukuk
• 1) preserve and protect the environment/natural resources
• 2) conserve the use of energy
• 3) promote the use of renewable energy
• 4) reduce greenhouse gas emissions
• 5) improve the quality of life for society