Promoted product/activity of national and strategic importance including the MSC status companies and product/activity in the approved linkage programmed which achieve world class status: Company will be granted full tax exemption on 100% of the statutory income for 5 years and is eligible for extension for another 5 years. Companies that have started operation are also eligible but the incentives will only be given on the additional income. For companies currently enjoying PS may apply for the incentives at the end of the existing incentive period. Companies accorded MSC status are also eligible other incentives under the Bill of Guarantees. However, multimedia faculties outside the MSC that have been accorded MSC status companies are only eligible for the tax incentives. A multimedia faculty is referred to as a centre of learning which provides courses in media, computer, information technology, telecommunications, communications and contents relating to data, voice, graphics and images.
Tax Incentives - MDEC's new requirements since 1/1/19
The MSC Malaysia Status Services Incentive for Non-IP derived income (services)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.
Income tax exemption for Tier 1, Tier 2 ------ 100% for first 5 years
Income tax exemption for Tier 1, Tier 2 ----- 100% for second 5 years provided paid up capital increased to RM2.5 million.
Income tax exemption for Tier 3 ----- 70% for first 5 years only.
Income tax exemption for Tier 3 ----- 100% for second 5 years provided it move to Tier 1 or Tier 2 status
Pioneer Status is only given if other conditions are met:
Paid Up Capital
Paid up capital for Tier 1 and Tier 2 - RM500,000.
Paid up capital for Tier 3 - RM250,000.
Full time employees for Tier 1 & Tier 2 :
50 employees with salary of RM5000 per month or
30 employees with salary of RM10,000 per month
Paid up capital for Tier 3:
30 employees - salary RM5000 per month or
20 employees - salary RM8,000 per month
Annual operating expenditure and investment in fixed asset:
Tier 1 & 2 - RM3.5 million
Tier 3 - RM 1 million
% of Malaysian Knowledge Workers:
Tier 1 & 2 - 70%
Tier 3 - 50%
CATEGORY (TIER) 1
Must be located within Designated Premises at MSC Malaysia Cybercities or Cybercentres
CATEGORY (TIER) 2
Must be located at MSC Malaysia Cybercities or Cybercentres
CATEGORY (TIER) 3
1. Not subjected to location requirement
2. Ensure 50% of Knowledge Workers must be Malaysians