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Pioneer status - Coggle Diagram

- - - - A period not exceeding one year from the date the pioneer company commenced
      - Successive period of one year thereafter
      - A period not exceeding one year to the date which the pioneer business ends
- - - - A company which provides RnD services in Malaysia only to a company other than its related company
      - Must comply with the conditions under the pioneer status approval and must have an adequate number of full time employees, along with an adequate operating expenditure for activities relating to RnD
      - Income form royalty and intellectual right are taxable under ITA 1967
        
        If it is receivable as consideration for the commercial exploitation of that right
      - Choice of tax incentives
        
        Pioneer status with enhanced exemption of 100% for five years, or
        
        ITA with enhanced incentives of higher rate of 100% within an extended period of 10 years to be set off against 70% of the SI
      - Special deduction
        
        The deduction shall be twice the amount of expenditure incurred
        
        No expenditure can be claimed under section 33 for expenditure claimed under 34A
        
        Effective from 2021, double deduction shall not be allowed if amount of expenses on RnD outside Malaysia is more than 30% of total expense on RnD
      - Option to claim approved RnD expenditure by pioneer company
        
        May elect single deduction under 34A
        
        The additional expenditure, subject to 30% criteria in the immediate preceding paragraph, shall be deducted in the first basis period in respect of its post-pioneer business
- - - - Any RE shall be carried forward to the first day of the pioneer period, say year 2
      - During the pioneer period from year 2 to 6, annual allowance notwithstanding that no CA is claimed is computed to reduce the RE
    - - CA is computed according to the asset incurred during the pioneer period
      - The RE shall be carried forward to the first day of post-pioneer period
    - - Where there is no adjusted income in the pre-pioneer period in year 1, the pre-pioneer CA shall be carried forward to reduce the adjusted income of YEAR 2
      - Any pre-pioneer loss of year 1 shall be utilised under the ITA 1967
    - - Shall be carried forward and be deducted from the post-pioneer income of a business relating to the same promoted activity or promoted product from year 7 until it is fully utilised
    - - If there are qualifying plant expenditure in the a basis period, then the total shall be deemed to be incurred during the basis period
- - - - has an approved adequate number of full time employees in Malaysia to carry out the qualifying activity
      - Annual operating expenditure or investment in fixed assets- both in Malaysia
    - - Effective from YA 2015 to 30/6/2021
      - Qualifying company which is granted exemption on or before 16/10/2017 shall not apply the substantive requirements until 30/6/2021
      - Qualifying company granted exemption after 16/10/2017, the substantive requirements shall not apply to that company until 31/12/2018
      - Application for an award of the status on or after 1/1/2019 needs to comply with the requirements under the ITA EO 2018