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Gazette Ref.
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Citation
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Effective
date
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P.U.(A)
27/ 2013
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For
the year of assessment (YA) 2014
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P.U.(A)
28/ 2013
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From
YA 2013
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P.U.(A)
29/ 2013
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From
1 January 2014 till 31 December 2020
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P.U.(A)
30/ 2013
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From
YA 2014
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P.U.(A)
31/ 2013
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From
YA 2014
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P.U.(A)
32/ 2013
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From
1 January 2014
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P.U.(A)
33/ 2013
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From
31 January 2013
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Tun Razak
Exchange (TRX)
“Tun Razak Exchange” is defined in each of the
legislation in terms of its location in Wilayah Persekutuan, Kuala Lumpur.
TRXM
A “Tun Razak Exchange Marquee status company” (TRXM)
is defined in the legislation as follows:
(a) a
licensed institution under the Banking and Financial Institutions Act 1989 [Act
372] carrying on a banking business or a merchant banking business or a related
company within the same group;
(b) a
company licensed under the Insurance Act 1996 [Act 553] carrying on insurance
business or a related company within the same group;
(c) a
company licensed under the Islamic Banking Act 1983 [Act 276] carrying on an
Islamic banking business or a related company within the same group;
(d) a
company registered under the Takaful Act 1984 [Act 312] carrying on takaful
business o a related company within the same group;
(e) a
company which is a holder of a Capital Markets Service Licence licensed under
the Capital Markets and Services Act 2007 [Act 671];
(f) a
person, other than an individual, who is a registered person under section 76
or 76A of the Capital Markets and Services Act 2007; and
approved by the Minister.
A related
company within the same group means –
(i) a
person who has control over the licensed institution or company referred to in
(a), (b), (c) and (d) above;
(ii) a
person over whom the licensed institution or company referred to in (a), (b),
(c) and (d) above has control; or
(iii) a
person and the licensed institution or company referred to in (a), (b), (c) and
(d) above both of whom are controlled by some other person.
Incentives for a TRXM
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Gazette Ref.
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Incentive
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P.U.(A) 27/ 2013
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·
Capital expenditure incurred by a TRXM on the
construction or purchase of a commercial building located in the TRX shall be
treated as qualifying building expenditure (QBE) for the purposes of Schedule
3 of Income Tax Act 1967 (ITA), provided that the commercial building is
owned by the TRXM and used by the TRXM for the purpose of a business as
specified in the Schedule to these Rules.
·
Industrial building allowance under paragraph 80 of
Schedule 3 of ITA is granted at the rate of one-tenth (10%) of the QBE for a
period of 10 years. The Rules also
provide for treatment for an industrial building partly in use or where an
industrial building is also used for non-specified activity/business.
·
Leasing of an industrial building specified in the Schedule
to these Rules shall be regarded as carrying on a leasing activity and income
from that leasing activity shall be treated as a separate and distinct source
of business under Section 4(a) of ITA.
·
These Rules shall not apply to QBE incurred by the
TRXM after 31 December 2020, or a company exempted under Income Tax
(Exemption)(No.4) Order 2013 [P.U.(A) 28/2013]
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P.U.(A) 29/ 2013
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·
Prescribed renovation costs, as set out in the
Schedule to these Rules, incurred by a TRXM on a building or part of a
building located in TRX used for the purpose of the company’s business,
qualify for an initial allowance of 20% and annual allowance of 40%, provided
that the costs are certified by an external auditor.
·
The renovation costs shall be deemed to be incurred
on the day on which the TRXM commences to undertake the whole or part of its
business in the TRX.
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P.U.(A) 30/ 2013
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·
In ascertaining the adjusted income of a TRXM, a
deduction is allowed for relocation costs, as set out in the Schedule to
these Rules, incurred by the TRXM to relocate the whole or part of its
business to the TRX, provided that such relocation takes place not later than
31 December 2020 and the costs are certified by an external auditor. The deduction is only in respect of costs
not allowed under section 33(1) ITA.
·
The relocation costs will be deemed to be incurred
in the YA in which the TRXM commences to undertake the whole or part of its
business in the TRX.
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P.U.(A) 31/ 2013
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·
In ascertaining the adjusted income of a TRXM, a
deduction of an amount equal to one-half of the rental payments incurred in
respect of a rented commercial building used for the purposes of its business
in the TRX, is allowed. This deduction
is in addition to any deduction allowed under section 33(1) of the ITA and is
given for a period of 10 years from the date the TRXM commences to undertake
its business in the TRX.
·
The commercial building does not include a building
or part of a building used for the purpose of living accommodation.
·
These Rules shall not apply to a TRXM commencing to
undertake its business in the TRX after 31 December 2020.
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P.U.(A) 32/ 2013
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·
Stamp duty chargeable under Item 22(1)(b) of the
First Schedule to the Stamp Act 1949 relating to any instrument of service
agreement chargeable to duty executed on or after 1 January 2014 but not
later than 31 December 2022 between a service provider and a TRXM, is
exempted.
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P.U.(A) 33/ 2013
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Stamp duty chargeable on the following is exempted:
a) any instrument of transfer for the purchase of commercial property by
a TRXM status company; and
b) any loan agreement executed between a TRXM named in the Sale and
Purchase Agreement and a bank or financial institution to finance the
purchase of a commercial property;
Provided that the sale and purchase agreement for
the purchase of the commercial property and the loan agreement are executed
on or after 31 January 2013 and not later than 31 December 2020
The exemption of stamp duty shall be given to the
first owner of that commercial property.
c) any lease or agreement for lease of any
commercial property entered into by a TRXM,
Provided that the lease agreement for the commercial
property is executed on or after 31 January 2013 and not later than 31
December 2020
The exemption of stamp duty shall be given to the
first lessee of that commercial property.
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Incentive for an “Approved Developer”
Income Tax
(Exemption)(No.4) Order 2013 [P.U.(A) 28/2013] provides that the Minister
exempts an approved developer from the payment of income tax in respect of 70%
of its statutory income derived from –
(a) the
disposal of any building or rights over any building or part of it, up to the
YA 2022, and subject to a maximum of 5 consecutive YA commencing from the YA in
which the developer first derives statutory income from such a disposal; and
(b) the rental
of a building or part of it, up to the YA 2027, and subject to a maximum of 5
consecutive YA commencing from the YA in which the developer first derives
statutory income from the rental activity.
The Minister
shall withdraw the tax exemption if the approved developer fails to undertake
the development activity in accordance with the TRX master plan or fails to
comply with any approval conditions as determined by the Minister.
An “Approved Developer” is defined as a
company, incorporated under the Companies Act, 1965 and resident in Malaysia,
which undertakes development within the TRX in accordance with the TRX approved
master plan; and the company is approved by the Minister.
“Statutory income” shall be determined
after deducting allowances which fall to be made under Schedule 3 of the ITA,
notwithstanding that no claim for such allowances has been made. Any amount of statutory income from the same
business source which is not exempt shall be deemed to be the total income of
that approved developer.
The income from
the approved developer for the activity in (a) above shall apply to –
(i) the
Income Tax (Property Development) Regulations 2007 [P.U.(A) 277/2007] in
relation to the sell-then-build method; or
(ii) the
Income Tax (Property Development) Regulations 2007 [P.U.(A) 277/2007] except
for regulation 6, in relation to the build-then-sell method
The Order is
not applicable to an approved developer which has claimed for a deduction in
the basis period for a YA under the Income Tax (Industrial Building Allowance) (Tun
Razak Exchange Marquee Status Company) Rules 2013 [P.U.(A) 27/2013].
Members may refer to the full text of
the above Orders at the official website of the Attorney General’s
Chamber.
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