Msc Status 4.0
Effective 1st January 2019, MDEC has approved changes to BOG 5 (Tax Exemption)
Status Update: Approval of MSC Malaysia Status Services Incentive (Non-IP)
Application of MSC Malaysia Status Services Incentive (Non-IP)
1. We refer to the announcement by the Government of Malaysia on 12 June 2018, "Malaysia's Commitment in International Tax Standard", and the subsequent announcement by MDEC on 28 December 2018, titled "Important Update and Changes on MSC Malaysia BOG 5".
2. As stated in the aforesaid announcements, the identified tax incentives of Malaysia will need to be reviewed and amended to be consistent with the international standards, which also include the MSC Malaysia Bill of Guarantee (BOG) 5. Generally, promoted activities has been categorized as either IP (intellectual property) or Non-IP derived income.
3. In accordance with the above exercise, the grant of MSC Malaysia Status and its incentives, including extension of income tax exemption period, or adding new MSC Malaysia Qualifying Activities, has been put on hold since 1 July 2018.
4. Previously, the tax exemption for MSC Malaysia Status was granted for the income derived from MSC Malaysia Approved Activities. Moving forward, the tax exemption will be granted for income derived from either services activities (Services Incentive) and/or intellectual property (IP Incentive).
5. The MSC Malaysia Status Services Incentive has been approved by the Government and will be regulated under the new Income Tax (Exemption) (No. 10) Order 2018 [P.U.(A) 389/2018], which was gazetted on 31 December 2018.
6. As for the MSC Malaysia Status IP Incentive, the policy is still under review process by the Government. MDEC will be releasing further information in due course.
7. Applications (new) for MSC Malaysia Status Services Incentive can be made starting from 2nd April 2019.
8. Applicants who had applied before but not approved will need to re-apply again.
ISSUED BY MALAYSIA DIGITAL ECONOMY CORPORATION SDN BHD (MDEC)
What are the Newly Promoted Activities
What is the meaning of IP derived income