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Incentives
Under the National Biotechnology Policy, various
tax incentive schemes have been drawn up to attract both foreign and local
biotech companies to set up business in Malaysia.
Incentive for the holding company –
A holding company that fulfills certain conditions can claim a tax
deduction for its investment in its approved subsidiary biotechnology
company against its profit.
Tax exemption for biotechnology companies
– Approved biotechnology companies will be eligible for pioneer
status with 100% tax exemption on statutory income for 10 years, commencing
from the first year the company enjoys profit. They are also eligible
for investment tax allowance with 100% of qualifying capital expenditure
to be set off against 100% statutory income for five years from the
date of first qualifying capital expenditure incurred (not applicable
if holding company incentives have been claimed).
Dividends distributed from tax-exempt biotechnology
companies will be treated as tax-exempt income for its shareholders.
Import duty and sales tax exemption on approved
biotechnology equipment and materials be considered under the pre-packaged
incentives.
Double deduction for qualifying expenditure
on R&D. Definition for R&D broadened to include pre-clinical
and clinical trials/testing. However, companies solely undertaking
pre-clinical and clinical trials/testing activity are not entitled
for double deduction.
Ex-pioneer BioNexus status company undertaking
R&D activity (subject to separate accounts) are given corporate
tax rate of 20% for 10 years on income relating to “qualifying
activities” or normal corporate tax rate on income relating
to “non-qualifying activities”.
BioNexus companies undertaking manufacturing
activity and enjoying tax exemption of 15 to 2 years commencing from
first year of profitability are not eligible for extension of tax
exemption.
Accelerated building allowance to be written
off within a period of 10 years for buildings used for research purposes
only.
Double deduction for qualifying expenditure
on export promotion.
Income tax deduction for investments by a
company and high net worth individuals with business income in BioNexus
status companies at seed or early stage.
Exemption on stamp duty and real property
gains tax in relation to merges and acquisitions of BioNexus status
companies based on merits of the case, particularly for R&D companies.
Tissue culture is a form of cloning?
New version of BICalert has been released on the 16th of August
2010.
Check out the latest edition of our quarterly report titled Bioremediation :
Nature's Way to a Cleaner Environment
Incentives
