PROMOTION OF INVESTMENTS ACT 1986

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 327 PROMOTION OF INVESTMENTS ACT 1986 As at 1 January 2022 This text is ONLY AN UPDATED TEXT of the Promotion of Investments Act 1986 by the Attorney General’s Chambers. Unless and until reprinted pursuant to the powers of the Commissioner of Law Revision under subsection 14(1) of the Revision of Laws Act 1968 [Act 1], this text is NOT AN AUTHENTIC TEXT. 2 PROMOTION OF INVESTMENTS ACT 1986 … … … 7 May 1986 Date of publication in the Gazette … … … 15 May 1986 English text to be authoritative … … … P.U. (B) 561/1986 Latest amendment made by Act 833 which came into operation on … … 1 January 2022 Date of Royal Assent … PREVIOUS REPRINTS First Reprint … … … … … 2001 Second Reprint … … … … … 2006 Third Reprint … … … … … 2019 3 LAWS OF MALAYSIA Act 327 PROMOTION OF INVESTMENTS ACT 1986 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title, construction and commencement 2. Interpretation 3. Application of incentives only to companies 4. Determination of promoted activities or promoted products 4A. Activity or product deemed to be promoted activity or promoted product 4 B. Activity or product deemed to be promoted activity or promoted product for purposes of subsections 5(1C), sections 26C, 26D, 26E and 26G 4 C. (Deleted) 4D. Determination of promoted activities or promoted products for selected industries 4 E. Determination of promoted activities or promoted products for automotive component modules industry 4F. Determination of promoted activities or promoted products for reinvestment PART II RELIEF FROM INCOME TAX Chapter 1— Research and Development Status, and Pioneer Status 4G. Application for approval of research and development status 4H. Grant of research and development status 4I. Non-compliance of approval 4 Laws of Malaysia ACT 327 Section 4J. Withdrawal of approval 4K. Surrender of research and development status 4L. Extension of research and development status period 5. Application for pioneer status 6. Grant of pioneer status 7. Pioneer certificate 8. Withdrawal of pioneer status 9. Cancellation of pioneer certificate 9A. Surrender of pioneer status or pioneer certificate 10. Application for additional promoted activity or promoted product 11. Retrospective operations 12. (Deleted) 13. Meaning of company in relation to agriculture 14. Tax relief period 14A. Extension of tax relief period 14B. No extension of tax relief period for application for pioneer status received on or after 1 November 1991 14C. Extension of tax relief period for pioneer status granted under subsection 6(1AB), 6(1AE), 6(1AG) or 6(1AI) 15. Pioneer and post-pioneer business 16. (Deleted) 17. Power to direct in certain events 18. Capital allowances 19. (Deleted) 20. Returns of income 21. Computation of income during tax relief period 21A. Restriction of income computed during tax relief period 21B. Computation of income during tax relief period in respect of application received on or after 1 November 1991 21BA. Computation of income during tax relief period in respect of pioneer status granted to a small company under subsection 6(1 A) 21C. Computation of income during tax relief period in respect of pioneer status granted under subsection 6(1AB) 21D. (Deleted) Promotion Of Investments 5 Section 21DA. (Deleted) 21E. Computation of income during tax relief period in respect of pioneer status granted under subsection 6(1AC) 21F. Computation of income during tax relief period in respect of pioneer status granted under subsection 6(1) for an application under subsection 5(1D) 21G. (Deleted) 21H. Computation of income during tax relief period in respect of pioneer status granted to a company participating in selected industries under subsection 6(1AE) 21I. Computation of income during tax relief period in respect of pioneer status granted to a company participating in production of automotive component modules industry under subsection 6(1 AF) 21J. Computation of income during tax relief period in respect of pioneer status granted to a company undertaking reinvestment for the same promoted activity or same promoted product under subsection 6(1 AG) 21K. (Deleted) 21L. Computation of income during tax relief period in respect of pioneer status granted to a company commercializing research and development findings under subsection 6(1AI) 21M. (Deleted) 22. (Deleted) 22A. Company shall maintain statement for income computed during tax relief period 23. Certain dividends exempted from income tax 24. Income wrongly exempted, etc. 25. Loss incurred in tax relief period Chapter 2—Investment Tax Allowance 26. Application for approval for investment tax allowance 26A. Application for approval for investment tax allowance in respect of an activity or a product which is deemed under section 4A to be a promoted activity or promoted product 26B. (Deleted) 26C. Application for approval for investment tax allowance to contract research and development company 26D. Application for approval for investment tax allowance to research and development company 6 Laws of Malaysia ACT 327 Section 26E. Application for approval for investment tax allowance to company carrying on in-house research 26F. Application for approval for investment tax allowance to high technology company or a company establishing or upgrading medical devices testing laboratory 26G. Application for approval for investment tax allowance to a technical or vocational training company and private higher educational institutions 26H. (Deleted) 26I. Application for approval for investment tax allowance in respect of an activity or product in selected industries as prescribed under section 4D 26J. Application for approval for investment tax allowance in respect of an activity or product in automotive component modules industry as prescribed under section 4E 26K. Application for approval for investment tax allowance in respect of reinvestment in activity or product as prescribed under section 4 F 26L. (Deleted) 26M. Application for approval for investment tax allowance to a company undertaking the production of halal food product 26N. Application for approval for investment tax allowance to a company conserving energy for own consumption 26O. (Deleted) 27. Grant of approval for purpose of investment 27A. Grant of approval of application for investment tax allowance made under subsection 26A(1) 27B. (Deleted) 27C. Grant of approval of application for investment tax allowance made under subsection 26C(1) 27D. Grant of approval of application for investment tax allowance made under subsection 26D(1) 27E. Grant of approval of application for investment tax allowance made under subsection 26E(1) 27F. Grant of approval of application for investment tax allowance made under subsection 26F(1) or (2A) 27G. Grant of approval of application for investment tax allowance made under subsection 26G(1) or (2) 27H. (Deleted) Promotion Of Investments 7 Section 27I. Grant of approval of application for investment tax allowance made under subsections 26J(1), (1A) and (1B) 27J. Grant of approval of application for investment tax allowance made under subsection 26J(1) 27K. Grant of approval of application for investment tax allowance made under subsection 26K(1) 27L. (Deleted) 27M. Grant of approval of application for investment tax allowance made under subsection 26M(1) 27N. Grant of approval of application for investment tax allowance made under subsection 26N(1) 27O. (Deleted) 27P. Determination of effective date and compliance for investment tax allowance 28. Withdrawal of approval of investment tax 28A. Surrender of the grant of approval of investment tax allowance 29. Investment tax allowance 29A. Investment tax allowance in respect of application received on or after 1 November 1991 29B. Investment tax allowance for application under subsection 26(1) which has been approved under subsection 27(1 A) for a small company 29C. (Deleted) 29D. Investment tax allowance for application under section 26 C which has been approved under section 27C 29E. Investment tax allowance for application under section 26D which has been approved under section 27D 29F. Investment tax allowance for application under section 26E which has been approved under section 27E 29G. Investment tax allowance for application under section 26 F which has been approved under section 27F 29H. Investment tax allowance for application under section 26G which has been approved under section 27G 29I. (Deleted) 29J. Investment tax allowance for application under section 26 I which has been approved under section 27 I 29K. Investment tax allowance for application under section 26J which has been approved under section 27J 8 Laws of Malaysia ACT 327 Section 29L. Investment tax allowance for application under section 26 K which has been approved under section 27K 29M. (Deleted) 29N. Investment tax allowance for application under section 26M which has been approved under section 27M 29O. Investment tax allowance for application under section 26 N which has been approved under section 27N 29P. (Deleted) 29Q. Determination of capital expenditure in respect of promoted activity or promoted product subject to goods and services tax for investment tax allowance 29R. Adjustment of capital expenditure incurred which is subject to goods and services tax 30. (Deleted) 30A. Withdrawal of investment tax allowance in relation to disposed asset 31. Meaning of company in relation to agriculture Chapter 2A—Industrial Adjustment Allowance 31A–31E. (Deleted) Chapter 3—Abatement of Adjusted Income 32–35. (Deleted) Chapter 4—Abatement of Statutory Income for Exports 36–38. (Deleted) Chapter 5—Export Allowance 39–40A. (Deleted) Chapter 6—Deductions for Promotion of Exports 41. Deductions for promotion of exports Chapter 7—Infrastructure Allowance 41A–41B. (Deleted) Promotion Of Investments 9 PART III SUPPLEMENTAL Section 42. Power of entry, etc. 43. Power to make rules and regulations 43A. Separate accounts 44. Repeal 45. Savings 46–47. (Deleted) 48. Application of this Act to tax relief period 49. Capital expenditure incurred on plant and machinery in hotel business 50. Application for an incentive of a similar character 50A. Application for investment tax allowance by a company granted an incentive under the repealed law 50AA. Eligibility of companies under repealed law for industrial adjustment allowance 50B. Eligibility of company under repealed law for abatement of adjusted income or export allowance 51. Application under repealed law 52. Concurrence of the Minister of Finance 53. Application of sections 27 and 29 of the repealed law 54. Functions of a public officer 55. References to repealed law SCHEDULE LAWS OF MALAYSIA Act 327 PROMOTION OF INVESTMENTS ACT 1986 An act to make provision for promoting by way of relief from income tax the establishment and development in Malaysia of industrial, agricultural and other commercial enterprises, for the promotions of exports and for incidental and related purposes. [1 January 1986] BE IT ENACTED by the Seri Paduka Baginda Yang di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows: PART I PRELIMINARY Short title, construction and commencement 1. (1) This Act may be cited as the Promotion of Investments Act 1986. (2) Subject to section 2, this Act shall be read and construed as one with the Income Tax Act 1967 [Act 53] (hereinafter referred to as the “principal Act”). (3) This Act shall be deemed to have come into force on 1 January 1986 and shall have effect for the yea