schedule 7a reinvestment allowance

Tajuk : Schedule 7A. Reinvestment AllowanceTarikh Kuatkuasa : Tarikh Tamat Kuatkuasa :

Kategori : Rujukan Perundangan\Akta Cukai Pendapatan 1967 - Seksyen\Akta Cukai Pendapatan - Jadual\

Rencana

Akta Cukai Pendapatan 1967 (Akta 53)

Pindaan Sehingga Akta 702 Tahun 2010 Tarikh Keluaran :

Title : Income Tax Act

Part : PART X - SUPPLEMENTAL

Chapter : Chapter 3 - Miscellaneous

Section : Schedule 7A. Reinvestment Allowance

SCHEDULE 7A (Section 133A)

Reinvestment Allowance

1. Subject to this Schedule, where a company which is resident in Malaysia-

History Paragraph 1 amended by Act 619 of 2002 s10(a), by substituting for the word "Where" for the words "Subject to this Schedule, where" , shall have effect for the year of assessment 2002 and subsequent years of assessment.

(a) has been in operation for not less than thirty-six months; and

History

Subparagraph 1(a) is amended by Act 693 of 2009, s46(a), by substituting for the words "twelve months" the words "thirty-six months", shall have effect for the year of assessment 2009 and subsequent years of assessment. Subparagraph (1)(a) amended by Act 591 of 1998 s13(a), by inserting after the semicolon the word " and", shall be deemed to have effect for the year of assessment 1998 and subsequent years of assessment.

[Am. Act 274; Act 323; Act A643; Act 328; Act 364; Act 420; Act 421; Act 451; Act 591. Act 644]

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(b) has incurred in the basis period for a year of assessment capital expenditure on a factory, plant or machinery used in Malaysia for the purposes of a qualifying project referred to under subparagraph 8(a) or (b);

History. Subparagraph 1(b) is amended by Act 624 of 2002 s.29(a), by inserting after the word "project" the words "referred to under subparagraph 8(a) or (b)", shall have effect for the year of assessment 2003 and subsequent years of assessment. Subparagraph (1)(b) amended by Act 591 of 1998 s13(b), by substituting for the word " ; and " a comma, shall be deemed to have effect for the year of assessment 1998 and subsequent years of assessment.Subparagraph (1)(b) formerly read:

"(b) has incurred in the basis period for a year of assessment capital expenditure on a factory, plant or machinery used in Malaysia for the purposes of a qualifying project; and ".

(c) deleted by Act 591,

History Subparagraph (1)(c) deleted by Act 591 of 1998 s13(c), shall be deemed to have effect for the year of assessment 1998 and subsequent years of assessment. Subparagraph (1)(c) formerly read:

"(c) has shown an increase in productivity in the basis period for that year of assessment or in the basis period for the following year of assessment,".

there shall be given to the company for that year of assessment a reinvestment allowance of an amount equal to sixty per cent of that expenditure: Provided that such expenditure shall not include capital expenditure incurred on plant or machinery which is provided wholly or partly for the use of a director, or an individual who is a member of the management, or administrative or clerical staff.

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History Paragraph 1 substituted by Act 578 of 1998 s21(a), shall have effect for the year of assessment 1998 and subsequent years of assessment. Paragraph 1 formerly read:

" 1. Where a company which is resident in Malaysia for the basis year for a year of assessment 1994, the reinvestment allowance to be given shall be the total of-

(i) forty per cent of the capital expenditure incurred prior to the first of January 1994; and (ii) fifty per cent of the capital expenditure incurred after the thirty-first of December 1993:

Provided further that capital expenditure shall not include capital expenditure incurred on plant or machinery where such plant or machinery is provided wholly or partly for the use of a director or an individual who is a member of the management, administrative or clerical staff.". has incurred in the basis period for that year of assessment capital expenditure on a factory, plant or machinery, used in Malaysia for the purposes of any qualifying project, there shall be given to the company for that year of assessment a reinvestment allowance of sixty per cent of that expenditure:

Provided that in the case of a company other than a small scale company as defined under section 33(4) of the Promotion of Investments Act 1986 whose basis period for the year of assessment 1995 includes a period prior to the first of January Schedule 7A paragraph 1 amended by Act 544 of 1996 s17(a), by substituting after the word "fifty" appearing after the words "reinvestment allowance of" the word "sixty", shall have effect for the year of assessment 1997 and subsequent years of assessment. Schedule 7A paragraph 1 substituted by Act 513 of 1994 s29(a), shall come into force on the 1st January 1994. Schedule 7A paragraph 1 formerly read:

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" 1. Where a company which is resident in Malaysia for the basis year for a year of assessment has incurred in the basis period for that year of assessment capital expenditure on a factory, plant or machinery, used in Malaysia for the purposes of any qualifying project, there shall be given to the company for that year of assessment a reinvestment allowance of forty per cent of that expenditure: Provided that in the case of a small scale company as defined under section 33(4) of the Promotion of Investments Act 1986 there shall be given to the company a reinvestment allowance of fifty per cent of that expenditure: Provided further that capital expenditure shall not include capital expenditure incurred on plant or machinery where such plant or machinery is provided wholly or partly for the use of a director or an individual who is a member of the management, administrative or clerical staff.". Schedule 7A paragraph 1 amended by Act 451 of 1991 s29(a), by substituting for the word "approved" the word "qualifying", shall have effect for the year of assessment 1991 and subsequent years of assessment.

1A. Subject to this Schedule, where a company which has been in operation for not less than thirty-six months and is resident in Malaysia for the basis year for a year of assessment has incurred in the basis period for that year of assessment, capital expenditure in relation to an agricultural project in Malaysia for the purposes of any qualifying project referred to under subparagraph 8(c) there shall be given to the company for that year of assessment a reinvestment allowance of sixty per cent of that expenditure.

History

Subparagraph 1A is amended by Act 693 of 2009, s46(a), by substituting for the words "twelve months" the words "thirty-six months", shall have effect for the year of assessment 2009 and subsequent years of assessment. Paragraph 1A is amended by Act 624 of 2002 s29(b), by inserting after the words "qualifying project" the words "referred to under subparagraph 8(c)", shall have effect for the year of assessment 2003 and subsequent years of assessment.

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History Paragraph 1A amended by Act 619 of 2002 s10(b), by substituting for the word "Where" for the words "Subject to this Schedule, where" , shall have effect for the year of assessment 2002 and subsequent years of assessment.

History Paragraph 1A amended by Act 578 of 1998 s21(b), by inserting after the word "which" the words "has been in operation for not less than twelve months and", shall have effect for the year of assessment 1998 and subsequent years of assessment. Schedule 7A paragraph 1A inserted by Act 544 of 1996 s17(b), shall have effect for the year of assessment 1997 and subsequent years of assessment.

1B. (1) Where a company has incurred capital expenditure in respect of an asset for the purposes of a qualifying project and that asset is acquired by a person (in this paragraph referred to as “the acquirer”) from that company or from any other person (in this paragraph referred to as “the disposer”) and at the time of the acquisition –

(a) the disposer of the asset is a person over whom the acquirer of the asset has control;

(b) the acquirer of the asset is a person over whom the disposer of the asset has control;

(c) some other person has control directly or indirectly over the disposer and acquirer of the asset; or

(d) the acquisition is effected in consequence of a scheme of reconstruction or amalgamation of companies,

this Schedule shall not apply to the acquirer in respect of the asset.

(2) In this paragraph–

“asset” means a factory, plant or machinery referred to in paragraph 1, or plant, machinery or building

Act 327.

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referred to in the definition of “capital expenditure” in paragraph 9;

"control”, in relation to a company, means the power of a person to secure, by means of the holding of shares or the possession of voting power in or in relation to that or any other company, or by virtue of any powers conferred by the articles of association or other document regulating that or any other company, that the affairs of the first mentioned company are conducted in accordance with the wishes of that person.

History

Paragraph 1B is substituted by Act 693 of 2009 s46(b), has effect for the year assessment 2009 and subsequent years of assessment.The Paragraph previously read:

"1B. (1) Subject to subparagraph (2), where a company (in this paragraph referred to as "the acquirer") has incurred capital expenditure in respect of an asset for the purposes of a qualifying project and that asset is acquired from another company (in this paragraph referred to as "the disposer") and at the time of the acquisition -

(a) the acquirer of the asset is a person over whom the disposer of the asset has control; (b) the disposer of the asset is a person over whom the acquirer of the asset has control; (c) some other person has control over the acquirer and disposer of the asset; or (d) the acquisition is effected in consequence of a scheme of reconstruction or amalgamation of companies,

the acquirer shall be deemed to have incurred that capital expenditure on the asset on the first day of the disposer's final period, of an amount equal to the amount of residual expenditure ascertained under sub-paragraph (3). (2) Where the disposer incurred capital expenditure in relation to the asset referred to in subparagraph (1) on or after the first day of the disposer's final period, the acquirer shall be deemed to have incurred capital expenditure on the asset on the day that disposer incurred capital expenditure, of an amount equal to the amount of capital expenditure incurred by that disposer. (3) For the purpose of subparagraph (1), residual expenditure in relation to an asset shall be the capital expenditure incurred by the disposer reduced by the amount of allowances on that asset under Schedule 3 that has been

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made or would have been made to the disposer in the basis period or periods before the first day of the disposer's final period. (4) In this paragraph -

"asset" means a factory, plant or machinery referred to in paragraph 1, or plant, machinery or building referred to in the definition of "capital expenditure" in paragraph 9; "control", in relation to a company, means the power of a person to secure, by means of the holding of shares or the possession of voting power in or relation to that or any other company, or by virtue of any powers conferred by the articles of association or other document regulating that or any other company, that the affairs of the first-mentioned company are conducted in accordance with the wishes of that person; "the disposer's final period", in relation to the disposal and acquisition of an asset, means the basis period (appropriate to the disposer's business for the purposes of which expenditure has been incurred in relation to the asset) for the year of assessment which coincides with the first year of assessment for which an allowance under Schedule 3 may be made to the acquirer in relation to the asset if it is used for purposes of a business carried on by the acquirer or as an industrial building. History Schedule 7A paragraph 1B inserted by Act 619 of 2002 s10(c), shall have effect for the year of assessment 2002 and subsequent years of assessment.

1C. Where a person who carries on a business and that business has been in operation for not less than thirty-six months and that person is a resident in Malaysia for the basis year for a year of assessment has incurred in the basis period for that year of assessment, capital expenditure in relation to an agriculture project in Malaysia for the purpose of any qualifying project referred to under subparagraph 8(d), there shall be given to that person for that year of assessment a reinvestment allowance of sixty per cent of that expenditure: Provided that where this paragraph applies to an

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individual, that individual must be a citizen in the basis year for that year of assessment.

History.

Subparagraph 1C is amended by Act 693 of 2009, s46(a), by substituting for the words "twelve months" the words "thirty-six months", shall have effect for the year of assessment 2009 and subsequent years of assessment. Paragraph 1C is inserted by Act 624 of 2002 s29(c), shall have effect for the year of assessment 2003 and subsequent years of assessment.

2. An allowance under paragraph 1, 1A or 1C shall be given in respect of capital expenditure incurred in the basis period for fifteen consecutive years of assessment beginning from the year of assessment for the basis period in which a claim for that allowance was first made in the return of his income in respect of that capital expenditure.

History. Paragraph 2 amended by Act 624 of 2002 s29(d)(i), by substituting for the words "or 1A" the words ", 1A or 1C", and by Act 624 of 2002 s29(d)(ii), by substituting for the words "the capital expenditure was first incurred" the words "a claim for that allowance was first made in the return of his income in respect of that capital expenditure", shall have effect for the year of assessment 2003 and subsequent years of assessment.

History Schedule 7A paragraph 2 amended by Act 619 of 2002 s10(d), by substituting for the word "five' the word "fifteen", shall be deemed to have effect for the year of assessment 1998 and subsequent years of assessment.

History Paragraph 2 substituted by Act 578 of 1998 s21( c ), shall have effect for the year of assessment 1998 and subsequent years of assessment. Paragraph 2 formerly read: " 2. Subject to paragraph 4 an allowance given under paragraph 1 or 1A for expenditure incurred in relation to any qualifying project shall be given only for the

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year of assessment in the basis period for which that expenditure was incurred-

(a) where paragraph 1 applies, only in respect of expenditure incurred from the first of January 1979; or (b) where paragraph 1A applies, only in respect of expenditure incurred from the first of January 1996. ".

Schedule 7A paragraph 2 substituted by Act 544 of 1996 s17( c ), shall have effect for the year of assessment 1997 and subsequent years of assessment. Schedule 7A paragraph 2 formerly read: " 2. An allowance given under paragraph 1 for expenditure incurred in relation to any qualifying project -

(a) subject to paragraph 4, shall be given only for the year of assessment in the basis period for which that expenditure was incurred ; and (b) shall be given only in respect of expenditure incurred from the 1st of January 1979.".

Schedule 7A subparagraph 2(b) substituted by Act 513 of 1994 s29(b), shall come into force on the 1st January 1994. Schedule 7A subparagraph 2(b) formerly read:

"(b) shall not be given in respect of expenditure incurred more than seventeen years from the first of January 1979.".

Schedule 7A paragraph 2 amended by Act 451 of 1991 s29(a), by substituting for the word "approved" the word "qualifying", shall have effect for the year of assessment 1991 and subsequent years of assessment. Schedule 7A subparagraph 2(b) amended by Act 451 of 1991 s29(b), by substituting for the word "twelve" the word "seventeen", shall have effect for the year of assessment 1991 and subsequent years of assessment.

2A. Where an asset is disposed of at any time within five years from the date of acquisition of that asset, an allowance given under paragraph 1, 1A or 1C in respect of that asset shall be deemed to have not been given to the person to which it would otherwise be entitled.

History.

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Paragraph 2A is amended by Act 693 of 2009, s46(a), by substituting for the words "two years" the words "five years", shall have effect for the year of assessment 2009 and subsequent years of assessment. Paragraph 2A amended by Act 624 of 2002 s29(e)(i), by substituting for the words "or 1A" the words ", 1A or 1C", and by Act 624 of 2002 s29(e)(ii), by substituting for the word "company" the word "person", shall have effect for the year of assessment 2003 and subsequent years of assessment.

History Paragraph 2A inserted by Act 578 of 1998 s21(d), shall have effect for the year of assessment 1999 and subsequent years of assessment.

3. Where an allowance is given to a person under paragraph 1, 1A or 1C for a year of assessment, so much of the statutory income of that business of that person for that year of assessment as is equal to the amount of the allowance (or to the aggregate amount of any such allowances, as the case may be) but not exceeding seventy per cent of the statutory income shall be exempt from tax for that year of assessment: Provided that where the qualifying project is located within the States of Sabah, Sarawak, the Federal Territory of Labuan, Perlis the Eastern Corridor of Peninsular Malaysia and such other areas which the Minister may from time to time determine or when the qualifying project has achieved the level of productivity as prescribed by the Minister, the amount to be exempt shall be equal to the allowance (or to the aggregate amount of any such allowances as the case may be) but not exceeding the statutory income for that year of assessment. History

Paragraph 3 is amended in the proviso by Act 661of 2006 s.34, by inserting after the words “the Federal Territory of Labuan,” the words “Perlis,” shall have effect for the year of assessment 2007 and subsequent years of assessment.

History

Paragraph 3 is amended by Act 624 of 2002 s.29(f)(i), by substituting for the word "company" the word "person" wherever it appears, by Act 624 of 2002 s.29

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(f)(ii), by substituting for the words "or 1A' the words ", 1A or 1C", and by Act 624 of 2002 s.29(f)(iii), in the proviso, by inserting after the word "Sarawak," the words "the Federal Territory of Labuan,", shall have effect for the year of assessment 2003 and subsequent years of assessment.

History Paragraph 3 substituted by Act 578 of 1998 s21(e), shall have effect for the year of assessment 1998 and subsequent years of assessment. Paragraph 3 formerly read: " 3. Where an allowance is given to a company under paragraph 1 or 1A for a year of assessment, so much of the statutory income of the company for the basis period for that year as is equal to the amount of the allowance (or to the aggregate amount of any such allowances, as the case may be) shall be exempt from tax for that year of assessment: Provided that where the qualifying project is located outside the States of Sabah, Sarawak, the Eastern Corridor of Peninsular Malaysia and such other areas which the Minister may from time to time determine, the amount so exempt shall not exceed seventy percent of the statutory income of that business of the company for that year of assessment.". Schedule 7A paragraph 3 substituted by Act 544 of 1996 s17( c ), shall have effect for the year of assessment 1997 and subsequent years of assessment. Schedule 7A paragraph 3 formerly read:

" 3. Where an allowance is given to a company under paragraph 1 for a year of assessment, so much of the adjusted income of the company for the basis period for that year as is equal to the amount of the allowance (or to the aggregate amount of any such allowances, as the case may be) shall be exempt from tax for that year of assessment.".

4. Where, by reason of the restriction of the allowance to seventy per cent of the statutory income or of an insufficiency or absence of statutory income from a business of the person for the basis period for a year of assessment, effect cannot be given or cannot be given in full to any allowance or allowances to which the person is entitled under this Schedule for that year in relation to the source consisting of that business, so much of the allowance or allowances as cannot be given for that year shall be given to the person under this Schedule for the first subsequent year

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of assessment for the basis period for which there is statutory income from that business, and for subsequent years of assessment until the person has received the whole of the allowance or allowances to which it is so entitled.

History Paragraph 4 is amended by Act 624 of 2002 s.29(g), by substituting for the word "company" the word "person" wherever it appears, shall have effect for the year of assessment 2003 and subsequent years of assessment. History Paragraph 4 substituted by Act 578 of 1998 s21(f), shall have effect for the year of assessment 1998 and subsequent years of assessment. Paragraph 4 formerly read:

" 4. Where, by reason of an insufficiency or absence of statutory income of a company from a business of the company for the basis period for a year of assessment, effect cannot be given or cannot be given in full to any allowance or allowances to which the company is entitled for that year in relation to the source consisting of that business, then, notwithstanding the foregoing paragraphs, so much of the allowance or allowances in question as cannot be given for that year shall be deemed to be an allowance to be given to the company under this Schedule for the first subsequent year of assessment for the basis period for which there is statutory income from that business, and so on for subsequent years of assessment until the company has received the whole of the allowance or allowances to which it is so entitled.".

Schedule 7A paragraph 4 amended by Act 544 of 1996 s17( d ), by substituting for the words "adjusted income" wherever they appear the words "statutory income", shall have effect for the year of assessment 1997 and subsequent years of assessment.

5. (1) In the case of a company as soon as any amount of income has become exempted under paragraph 3, that amount shall be credited to an account to be kept by that company for the purposes of this paragraph (that account and company being in this paragraph and paragraph 6 referred to as the exempt account and the relevant company respectively).

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History. Subparagraph 5(1) of Schedule 7A amended by Act 557 of 1997 s24(a), by substituting the word "As" at the beginning of the subparagraph the words "In the case of a company as", shall have effect for year of assessment 1997 and subsequent years of assessment.

(2) Where the exempt account is in credit at the date on which any dividends are paid by the relevant company out of income which has been exempted under paragraph 3, that amount equal to those dividends or that credit, whichever is the less, shall be debited to the exempt account. (3) So much of the amount of any dividends debited to the exempt account under subparagraph (2) as is received by a shareholder in the relevant company shall, if the Director General is satisfied with the entries in the exempt account, be exempt from tax in the hands of that shareholder. (4) Any dividends debited to the exempt account under subparagraph (2) shall be treated as having been distributed to the shareholders (or any particular class of shareholders) of the relevant company in the same proportions as those in which the shareholders in question were entitled to payment of the dividends giving rise to the debit. (5) Until the Director General is satisfied that there is no further need to maintain the exempt account, the relevant company shall deliver to the Director General a copy of the exempt account made up to a date specified by him whenever it is called upon to do so by notice in writing sent by the Director General to the company's registered office. (6) Where-

(a) an amount is received by way of dividend from the relevant company by a shareholder; (b) that amount is exempt from tax under subparagraph (3); and (c) that shareholder is a company,

any dividends paid by that shareholding company to its shareholders shall, to the extent that the Director General is satisfied that the dividends so paid are paid out of that amount, be exempt from tax in the hands of those shareholders.

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History

Subparagraph 5(7) of Shedule 7A is deleted by Act 683 of 2007, s 37(a), comes into opertion on 29 December 2007. (7) Section 108 shall not apply in respect of any dividend or part thereof which is debited to the exempt account or in respect of any dividend or part thereof which is exempt under subparagraph (6). 6. Notwithstanding any other provisions of this Schedule, where paragraph 2A applies or where it appears to the Director General that any income of the relevant company exempted under paragraph 3 or any dividend exempted in the hands of a shareholder under paragraph 5 ought not to have been exempted, he may at any time within six years after the expiration of the year of assessment for which the exemption was given make such assessment or additional assessments upon any person as appears to him to be necessary in order to counteract any benefit obtained from the exemption, or direct the relevant company to debit the exempt account with such amount as the circumstances require. History Paragraph 6 amended by Act 578 of 1998 s21(g), (i) by inserting after the words "this Schedule," the words "where paragraph 2A applies or"; (ii) by substituting for the word "twelve" the word "six"; and (iii) by inserting after the words "make such" the words "assessment or" , in force from 1 January 1999. 6A. Where in the case of a business of a person the basis periods for two years of assessment overlap, the period common to those periods shall be deemed for the purposes of this Schedule to fall into the earlier of those periods and not into the later of those periods. (Pindaan Akta 644, Tahun 2005) History Schedule 7A paragraph 6A inserted by Act 644 of 2005 s37, shall have effect for the year of assessment 2006 and subsequent years of assessment.

7. This Schedule shall not apply to a company -

(a) for the period during which the company -

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(i) has been granted pioneer status under the Promotion of Investments Act 1986 in respect of a promoted activity or promoted product and which is applying or intends to apply for the grant of a pioneer certificate; or (ii) has been granted pioneer certificate under the Promotion of Investments Act 1986 in respect of a promoted activity or promoted product and whose tax relied period has not ended or ceased;

(b) for the period prescribed under the relevant provisions of the Promotion of Investments Act 1986 in respect of a promoted activity or promoted product for which the company has been granted approval for investment tax allowance under the relevant provisions of that Act;

History

Subparagraph 7(b) is substituted by Act 693 of 2009 s 46(d), has effect for the year assessment 2009 and subsequent years of assessment. The Subparagraph previously read:

(b) for the period prescribed under section 29(2), 29A(3), 29B(2), 29C(2) or 29G(2) of the Promotion of Investments Act 1986 in respect of a promoted activity or promoted product for which the company has been granted approval under section 27, 27A, 27B or 27F of that Act;

History

Subparagraph 7(b) substituted by Act 578 of 1998 s21(h)(i), shall have effect for the year of assessment 1998 and subsequent years of assessment. Subparagraph 7(b) formerly read:

"(b) for the period prescribed under paragraph (b), (c) or (d) of section 29 (2) of the Promotion of Investments Act 1986 in respect of a promoted activity or promoted product for which the company has been granted approval under section 27 of that Act; ".

(c) (Deleted by Act 578)

History Subparagraph 7( c ) deleted by Act 578 of 1998 s21(h)(ii), shall have effect for the year of assessment 1998

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and subsequent years of assessment. Subparagraph 7( c ) formerly read:

"(c) for the year of assessment for which the company is given abatement of adjusted income under section 32, 33, 33A or 36 of the Promotion of Investments Act 1986;".

Schedule 7A subparagraph 7(c ) amended by Act 451 of 1991 s29(c ), by deleting the figures ", 34", shall have effect for the year of assessment 1991 and subsequent years of assessment. Schedule 7A subparagraph 7(c ) formerly read:

"(c) for the year of assessment for which the company is given abatement of adjusted income under section 32, 33, 33A, 34 or 36 of the Promotion of Investment Act 1986;".

(d) for the period during which that company, notwithstanding the repeal of the Investment Incentives Act 1968 -

(i) has been given approval under section 5, 12A or 12B of that Act and whose tax relief period has not ended; or (ii) has been given approval under section 26 of that Act and incurs capital expenditure which qualifies for investment tax credit; or

History. Schedule 7A subparagraph 7(d) amended by Act 544 of 1996 s17(e)(i), by deleting the word "or" at the end of subparagraph (d), shall have effect for the year of assessment 1997 and subsequent years of assessment.

(e) for the period prescribed under section 31E(2)(b) of the Promotion of Investments Act 1986 in respect of a manufacturing activity or manufactured product for which the company has been granted approval under section 31C of that Act.

History. Schedule 7A subparagraph 7(e) amended by Act 544 of 1996 s17(e)(ii), by substituting for the full stop at the end of subparagraph (e) the words "; or", shall have effect for the year of assessment 1997 and subsequent years of assessment.

(f) (Deleted by Act 683 of 2007)

History.

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Subparagraph 7(f) is deleted by Act 683 of 2007, s 37(c), comes inti operation on 29 December 2007. The subparagraph previously read:

"(f) in respect of qualifying expenditure on an approved agricultural project which has been given a deduction under Schedule 4A.". Schedule 7A subparagraph 7(f) inserted by Act 544 of 1996 s17(e)(iii), shall have effect for the year of assessment 1997 and subsequent years of assessment.

History

Paragraph 7 is amended by Act 683 of 2007, s 37(b)-

(i) by inserting after the semicolon at the end of subparagraph (d) the word "or";

(ii) by substituting for the word "; or" at the end of subparagraph (e) a full stop; and

(iii) by deleting subparagraph (f),

comes into operation on 29 December 2007.

8. In this Schedule, "qualifying project" means-

(a) a project undertaken by a company, in expanding, modernising or automating its existing business in respect of manufacturing or processing of a product or any related product within the same industry or in diversifying its existing business into any related product within the same industry ;

History Subparagraph 8(a) is amended by Act 693 of 2009 s46(e), by deleting the words "or processing", has effect for the year assessment 2009 and 2010. Subparagraph 8(a) substituted by Act 578 of 1998 s21(i), shall have effect for the year of assessment 1998 and subsequent years of assessment. Subparagraph 8(a) formerly read:

"(a) a project for manufacturing or processing undertaken by a company in expanding or modernising its existing business in respect of a product or any related product within the same industry or

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in diversifying its existing business into any related product within the same industry ; ".

Schedule 7A subparagraph 8(a) amended by Act 544 of 1996 s17(f)(i), by deleting the word "or" at the end of subparagraph (a), shall have effect for the year of assessment 1997 and subsequent years of assessment. Schedule 7A subparagraph 8(a) substituted by Act 451 of 1991 s29(e), shall have effect for the year of assessment 1991 and subsequent years of assessment. Schedule 7A subparagraph 8(a) formerly read: "(a) (i) a project for manufacturing or processing undertaken by a company in expanding its existing business and which is approved by the Minister of Trade and Industry under the Industrial Co-ordination Act 1975; or

(ii) where approval or further approval is not required under that Act for expansion, a project for manufacturing or processing undertaken by a company in expanding its existing business; or".

(b) Deleted by Act 693 of 2009

History

Subparagraph 8(b) is deleted by Act 693 of 2009 s 46(e), has effect for the year assessment 2009 and 2010. The subparagraph provides as folows:

"a project undertaken by a company which is participating in industrial adjustment approved under section 31A of the Promotion of Investments Act 1986, in expanding its existing business or modernising its production techniques or processes;"

History. Subparagraph (b) is amended by Act 624 of 2002 s29(h)(i), by deleting the word "or", shall have effect for the year of assessment 2003 and subsequent years of assessment. History. Schedule 7A subparagraph 8(b) amended by Act 544 of 1996 s17(f)(ii), by substituting for the full stop at the end of subparagraph (b) the words "; or", shall have effect for the year of assessment 1997 and subsequent years of assessment.

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(c) an agricultural project undertaken by a company in expanding, modernising or diversifying its cultivation and farming business excluding the business of rearing chicken and ducks; or

History.

Subparagraph (c) is amended by Act 624 of 2002 s29(h)(ii), by substituting for the full stop at the end of the subparagraph the words "excluding the business of rearing chicken and ducks; or", shall have effect for the year of assessment 2003 and subsequent years of assessment. History. Schedule 7A subparagraph 8( c ) inserted by Act 544 of 1996 s17(f)(iii), shall have effect for the year of assessment 1997 and subsequent years of assessment.

History. Schedule 7A paragraph 8 amended by Act 451 of 1991 s29(d), by substituting for the words "approved" the word "qualifying", shall have effect for the year of assessment 1991 and subsequent years of assessment.

(d) a project undertaken by a person –

(i) in transforming his business of rearing chicken and ducks from an opened house to a closed house system; or

(ii) in expanding his existing business of rearing chickens and ducks in a closed house system,

as verified by the Minister responsible for agriculture and agro-based industry.

History

Subparagraph 8(d) is substituted by Act 693 of 2009 s46(e), has effect for the year assessment 2009 and 2010. The Subparagraph provides as follow:

"a project undertaken by a person in transforming his business of rearing chicken and ducks from an opened house to a closed house system as verified by the Minister of Agriculture:

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10/28/2010

Provided that this subparagraph shall not apply from the year assessment 2011 and subsequent years of assessment."

History.

Subparagraph (d) is amended by Act 683 of 2007 s 37(c)-

(i) by substituting for the full stop a colon: and

(ii) by inserting after subparagraph (d) the following proviso:

"Provided that this subparagraph shall not apply from the year assessment 2011 and subsequent years of assessment" , comes into operation on 28 December 2007.

Subparagraph (d) is inserted by Act 624 of 2002 s29(h)(iii), shall have effect for the year of assessment 2003 and subsequent years of assessment.

9. In this Schedule- "capital expenditure", in relation to an agricultural project referred to in paragraphs 1A and 1C, means capital expenditure incurred in respect of - History.

Paragraph 9 is amended by Act 624 of 2002 s29(i)(i), in the definition of "capital expenditure", by substituting for the words "paragraph 1A" the words "paragraphs 1A and 1C", shall have effect for the year of assessment 2003 and subsequent years of assessment.

(a) the clearing and preparation of land; (b) the planting of crops; (c) the provision of irrigation or drainage systems; (d) the provision of plant and machinery; (e) the construction of access roads including bridges;

History.

Subparagraph (e) is amended by Act 624 of 2002 s29(i)(ii), by deleting the word "or", shall

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have effect for the year of assessment 2003 and subsequent years of assessment.

(f) the construction or purchase of buildings (including those provided for the welfare of persons or as living accomodation for persons) and structural improvements on land or other structures; or

History.

Subparagraph (f) is amended by Act 624 of 2002 s29(i)(iii), by substituting for the comma at the end of the subparagraph the words "; or", shall have effect for the year of assessment 2003 and subsequent years of assessment.

(g) the construction of chicken and duck houses,

History.

Subparagraph (g) is inserted by Act 624 of 2002 s29(i)(iv), shall have effect for the year of assessment 2003 and subsequent years of assessment.

for the purposes of any of the following activities:

(aa) cultivation of rice and maize; (bb) cultivation of vegetables, tuber and roots; (cc) cultivation of fruits; (dd) livestock farming; (ee) spawning, breeding or culturing of aquatic products;

History. Subparagraph (ee) is amended by Act 624 of 2002 s29(i)(v), by deleting the word "and", shall have effect for the year of assessment 2003 and subsequent years of assessment.

(ff) any other activities approved by the Minister; and

History.

Subparagraph (ff) is amended by Act 624 of 2002 s29(i)(vi), by inserting after the semicolon at the end of the subparagraph the word "and", shall have effect for the year of assessment 2003 and subsequent years of assessment.

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(gg) rearing of chicken and ducks; History.Subparagraph (gg) is inserted by Act 624 of 2002 s29(i)(vii), shall have effect for the year of assessment 2003 and subsequent years of assessment.

"disposed of" means sold, conveyed, transferred, assigned, or alienated with or without consideration;

History Definition of "disposed of" inserted by Act 578 of 1998 s21(j)(i) , shall have effect for the year of assessment 1998 and subsequent years of assessment.

"Eastern Corridor of Peninsular Malaysia" means the States of Kelantan, Terengganu and Pahang, and the District of Mersing in the State of Johor;

History. Definition of "Eastern Corridor of Peninsular Malaysia" substituted by Act 624 of 2002 s29(i)(viii), shall have effect for the year of assessment 2003 and subsequent years of assessment. Definition of "Eastern Corridor of Peninsular Malaysia" formerly read: "Eastern Corridor of Peninsular Malaysia" means the States of Kelantan, Terengganu, Pahang (not including the District of Lipis, Raub, Jerantut and Cameron Highlands except for the industrial areas approved by the State Government), and the District of Mersing in the State of Johore;"

HistoryDefinition of "Eastern Corridor of Peninsular Malaysia" amended by Act 578 of 1998 s21(j)(ii) , by substituting for the full stop at the end of the definition of "Eastern Corridor of Peninsular Malaysia" a semicolon, shall have effect for the year of assessment 1998 and subsequent years of assessment.

"incurred" has the same meaning assigned thereto in paragraphs 46 and 55 of Schedule 3;

History.

Paragraph 9 amended by Act 624 of 2002 s29(i)(ix), by substituting for the full stop at the end of

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the definition of "incurred" a semi-colon, shall have effect for the year of assessment 2003 and subsequent years of assessment.HistoryDefinition of "incurred" inserted by Act 578 of 1998 s21(j)(iii) , shall have effect for the year of assessment 1998 and subsequent years of assessment.

“manufacturing” means—

(a) conversion by manual or mechanical means of organic or inorganic materials into a new product by changing the size, shape, composition, nature or quality of such materials;

(b) assembly of parts into a piece of machinery or products; or

(c) mixing of materials by a chemical reaction process including biochemical process that changes the structure of a molecule by the breaking of the intra molecular bonds or by altering the spatial arrangement of atom in the molecule,

but does not include—

(aa) the installation of machinery or equipment for the purpose of construction;

(bb) a simple packaging operations such as bottling, placing in boxes, bags and cases;

(cc) a simple fixing;

(dd) a simple mixing of any products;

(ee) a simple assembly of parts;

(ff) any activity to ensure the preservation of products in good condition during transportation and storage;

(gg) any activity to facilitate shipment and transportation;

(hh) any activity of packaging or presenting goods for sale; or

(ii) any activity that may be prescribed by the Minister, notwithstanding the above interpretation;

"operation" means an activity which consists of the carrying on of a business referred to in paragraph 8;

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“simple” generally describes an activity which does not need special skills, machines, apparatus or equipment especially produced or installed for carrying out the activity.

History.

Definition "simple" is inserted by Act 693 of 2009 246(g), has effect for the year assessment 2009 and subsequent years of assessment.

Definition "manufacturing" is inserted by Act 693 of 2009 s 46(f), has effect for the year assessment 2009 and subsequent years of assessment.

Definition of "operation" inserted by Act 624 of 2002 s29(i)(x), shall have effect for the year of assessment 2003 and subsequent years of assessment.

History. Schedule 7A paragraph 9 inserted by Act 544 of 1996 s17(g), shall have effect for the year of assessment 1997 and subsequent years of assessment. 10. Except for paragraphs 1 and 5, this Schedule shall also apply to an agro-based co-operative society (within the meaning assigned to it under the Farmers' Organisation Act 1973), an Area Farmers' Association, a National Farmers' Association, a State Farmers' Association (within the meanings assigned to them under the Farmers' Association Act 1973), an Area Fishermen's Association, a National Fishermen's Association and a State Fishermen's Association (within the meanings assigned to them under the Fishermen's Association Act 1971).

History.

Paragraph 10 of Schedule 7A inserted by Act 557 of 1997 s24(b), shall have effect for year of assessment 1997 and subsequent years of assessment.

11. For the purpose of paragraph 1C, where -

(a) a company or a partnership (hereinafter referred to in this subparagraph as "new partnership") commences to carry on a business of rearing chicken and ducks; and (b) that business is a continuation of a business carried out by a sole proprietor or a partnership (hereinafter referred to in this subparagraph as "old

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partnership") for a period of not less than twelve months prior to that commencement,

that period, in relation to that company and the new partnership, shall be taken into account in ascertaining the period of not less than twelve months referred to in that paragraph: Provided that the sole proprietor or any of the partners in the old partnership holds any share in that company or is the partner of the new partnership, as the case may be. 12. Where a person has a source within the meaning of sections 55 to 58, the rules prescribed under paragraph 74 of Schedule 3 shall apply, mutatis mutandis, in ascertaining the allowance to be made to that person for a year of assessment under this Schedule.

History. Paragraphs 11 and 12 inserted by Act 624 of 2002 s29(j), shall have effect for the year of assessment 2003 and subsequent years of assessment.

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schedule 7a reinvestment allowance

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