Incentive for Pioneer Status

The Pioneer Status is one of the major tax incentives for companies investing in the manufacturing sector. Eligibility for Pioneer Status is based on certain priorities including the level of value-added, technology used and industrial linkages.

A company granted Pioneer Status enjoys a 5-year partial exemption from the payment of income tax. It pays tax on 30% of its statutory income with the exemption period commencing from its Production Day.

Unabsorbed capital allowances as well as accumulated losses incurred during the pioneer period can be carried forward and deducted from the post pioneer income of the company.

In order to encourage investments in Pahang (one of the designated “Eastern Corridor”), companies will enjoy a 100% tax exemption on their statutory income during their 5-year exemption period. Applications received by 31 December 2010 are eligible for this incentive.

Applications for Pioneer Status should be submitted to the Malaysian Industrial Development Authority (MIDA).

Notes:
Statutory Income: is derived after deducting revenue expenditure and capital allowances from the gross income.
Production Day: defined as the day its production level reaches 30% of its capacity.