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Include Left Circulars & Resources
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Tax Incentive To Encourage Small Malaysian Service Providers To Merge Into Larger Entities |
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Access No |
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MF14/2012 |
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08 Aug 2012 |
Circular MF14/2012 |
TO ALL MEMBER FIRMS
TAX INCENTIVE TO ENCOURAGE SMALL MALAYSIAN SERVICE PROVIDERS TO MERGE INTO LARGER ENTITIES
On 3 July 2012, the Malaysian Investment Development Authority
(MIDA) had released
Guidelines on Incentives to Encourage Small
Malaysian Service Providers to Merge into Larger Entities. The
incentives, is an initiative to be provided through Exemption
Order under Income Tax Act 1967 and Stamp Act 1949 by the Inland
Revenue Board (IRB) in order to encourage small Malaysian
service providers to merge into larger entities to build up
capacity in view of liberalisation and also to be globally
competitive.
The incentives given are:
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1. |
Flat tax rate of 20% on all taxable income for a period of 5
years (effective from the date of the merger); and |
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2. |
Stamp duty exemption on the merger document. |
To be eligible to apply for this incentive, mergers must take
place within 3 years from the announcement of the incentive and
enterprises that intend to merge must be 100% Malaysian owned,
have annual sales turnover of less than RM5 million or have
full-time employees of less than 50 and is in approved sector as
prescribed in the Guidelines. Professional services such as
accounting and taxation are one of the eligible sectors under
this incentive.
Applications can be submitted to Inland Revenue Board (IRB). The
detailed guidelines on this incentive can be downloaded from the
MIDA’s website at the following link:
http://www.mida.gov.my/env3/uploads/Forms/GD_ENT03072012.pdf.
Please be guided accordingly.
HO FOONG MOI (MS)
Acting Chief Executive Officer |
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