Definition of Desirous for the Granting of Tax Incentives under the Promotion of Investments Act, 1986 for Malaysian-Owned Companies
Under the Promotion of Investments Act (PIA), 1986, the main criterion for a company to enjoy tax incentives is that the company must be ‘desirous’ in establishing or participating in a promoted activity or producing a promoted product which has not started production.
i. Definition of production:
a. Manufacturing Company – Company has started to produce products (including trial production).
b. Services Company – Company has issued first invoice for the services rendered.
ii. Companies in Production
Malaysian-owned manufacturing and services companies that are already in production do not comply with the ‘desirous’ clause under the PIA, 1986. However effective from 3 July 2012, Malaysian-owned companies that have commenced its production within one year from the date of application to MIDA are eligible to be considered for tax incentives.
Tax exemptions equivalent to Pioneer Status or Investment Tax Allowance based on the prevailing rates and eligibility criteria under the PIA, 1986.