Research & Development and Investment Incentives

INTRODUCTION

Research and Development has long been receiving encouragement from the Government as Malaysia progresses into High Technology. Through applying Research and Development, new approaches in the manufacturing and other industries would be achieved and this in turn will lead to Malaysian products being more attractive internationally, thus boosting our economy.

Research and Development offers taxation opportunities for entities that perform R & D Services and those which wish to claim R & D-related expenses. Benefits could take the form of either exemption from tax liability or qualifying expenditure against income.

Investment Incentives await businesses that may wish to diversify or expand their operations and the benefits may be available without additional expenditure being incurred. They could be time or performance based, or founded on capital commitment qualifying for other reliefs also.

Common Incentives available are Pioneer Status, Investment Tax Allowance, and Accelerated Capital Allowance. A similar incentive, Reinvestment Allowance, would also be explored.

These Incentives and Allowances are presented from the practical approach using definitions, examples and computations, and examines the various stages from Qualification to Application to Utilization. Reliance will be made to the two governing legislature, the Income Tax Act and the Promotion of Investments Act.

COURSE OUTLINE

1. Benefit-Comparisons of the incentives since some are time based, like Pioneer Status, while others, like Investment Tax Allowance, are related to capital expenditure.

2. Deductions for Promotion of Exports

3. Single, Further, & Double Deductions

4. Incentives for Small and Medium Industries