What are the tax credit & incentives?


Malaysia has a wide variety of incentives covering the major industry sectors. Tax incentives can be granted through income exemption or by way of allowances. Generally, when income is exempted, any dividends paid out of such exempt income are not taxable in the hands of the shareholders. Where incentives are given by way of allowances, any unutilised allowances generally may be carried forward indefinitely to be utilised against future statutory income.

However, with effect from year of assessment 2019, there is a 7 consecutive years of assessment carry forward limit on the unutilised allowances or losses for certain incentives (e.g. Reinvestment Allowance, Pioneer status). Upon expiry of the incentive, any accumulated unutilised allowances or losses can be carried forward for 7 consecutive years of assessment.


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