● Company has not enjoyed PS/ITA for R&D activities. ● Company granted PS/ITA for R&D activities whereby the PS/ITA has expired. ● Existing companies undertaking reinvestments (by way of additional expenditure for plant, machinery and building) for the following R&D activities are eligible for second round PS/ITA: (i) expansion of existing R&D activities - reinvestment (by way of additional expenditure on plant, machinery and building) (ii) engaged in new research projects/research methodology/ processes/products (without additional investments) - applicable only for Contract R&D company applying for PS ● R&D activity as defined under the Promotion of Investments Act, 1986. ● Research undertaken should be in accordance with the needs of the country and benefits to the Malaysian economy. ● For Contract R&D Companies and R&D Companies, prevailing criteria will apply: i. At least 70% of the income of the company should be derived from R&D activities ii. For manufacturing-based R&D, at least 50% of the workforce of the company must be appropriately qualified personnel performing research and technical functions. iii. For agriculture-based R&D, at least 5% of the workforce of the company must be appropriately qualified personnel performing research and technical functions.
Incentive provided to existing R&D companies undertaking reinvestments. a) Contract R&D PS with full tax exemption (100%) of statutory income for a period of 5 years. Unabsorbed pioneer losses after the end of pioneer period are allowed to be carried forward for 7 consecutive year of assessment; or ● ITA of 100% of additional qualifying capital expenditure incurred within a period of 10 years from the date the first qualifying capital expenditure is incurred. The allowance can be offset against 70% of the statutory income for each year of assessment. Unutilised allowances can be carried forward until fully absorbed. b) R&D Companies ITA of 100% additional qualifying capital expenditure incurred within a period of 10 years from the date the first qualifying capital expenditure is incurred. The allowance can be offset against 70% of statutory income for each year of assessment. Unutilised allowances can be carried forward until fully absorbed. c) In-house R&D ● ITA of 50% of additional qualifying capital expenditure incurred within a period of 10 years from the date the first qualifying capital expenditure is incurred. The allowance can be offset against 70% of the statutory income for each year of assessment. Unutilised allowances can be carried forward until fully absorbed.
Malaysian Investment Development Authority (MIDA) MIDA Sentral, No. 5, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur