The objective of Public Ruling No. 6/2022 (“PR”) explains the tax treatment on qualifying plants and machinery for the purpose of claiming Accelerated Capital Allowances (“ACA”) or the prescribed rates in determining the statutory income from a business.
Qualifying Expenditure
A new subparagraph of 6.3 was inserted where the qualifying expenditure for capital instalment on hire purchases of plant and machinery. The capital instalment must be completed according to the period as stated in the ITR. If the hire purchase agreement does not, or only partially comply with the qualifying period, the plant or machinery is not eligible for ACA in the Income Tax Return (“ITR”).
Mould for the Production of Industrialised Buildings System Component – ITR (ACA) (Mould for the Production of Industrialised Buildings System Component) 2006 [P.U. (A) 249/2006]
Effective from the YA 2006, ACA is given on qualifying expenditure incurred in the basis period for a YA on the purchase of mould used in the manufacture of an Industrialised Building System component (“IBS”) for the purposes of a manufacturing company and construction company’s activity. The ACA is given at the rate of 40% for IA and 20% for AA.
IBS or prefabricated building industry means a construction system in which the individual parts are produced under controlled circumstances, such as at a factory or on-site, transported, and assembled into a building with the least amounts of workers on the job site. The system can thereby reduce building expenses and time incurred.
This mould refers to precast or ready-cast concrete that is manufactured in a factory or that is first poured on the construction site. Precast concrete elements that can be reused again include moulds for columns, beams, floor slabs, and wall panels. The fundamental element of IBS used to create IBS components is also this mould. These moulds are typically constructed from metals like steel, aluminium, fibreglass, plastic, and other metal materials.
The previous subparagraph 11.3 for exemption under Section 127 of ITA has been removed.
Excursion Bus – ITR (ACA) (Excursion Bus) (Amendment) 2022 [P.U. (A) 9/2022]
The licensed tour operators who purchase new excursion buses are eligible to claim ACA through three (3) subsidiary legislations as follows:
| Subsidiary Legislation | Rates of ACA | YA |
| ITR (ACA) (Bus) 2008
[P.U. (A) (356/2008)] |
Initial Allowance = 20%
Annual Allowance = 80% |
2009 ─ 2011 |
| ITR (ACA) (Excursion Bus) (Amendment) 2008
[P.U. (A) (291/2021)]
|
Initial Allowance = 20%
Annual Allowance = 40% |
2020 ─ 2021 |
| ITR (ACA) (Excursion Bus) (Amendment) 2022
[P.U. (A) (9/2022)]
|
Initial Allowance = 20%
Annual Allowance = 40% |
2022 ─ 2024 |
The period of the ACA granted is extended until the YA 2024. As such, licensed tour operators are eligible to claim ACA for capital expenditure incurred on purchasing excursion buses within three (3) years between YA 2022 and YA 2024.
A licensed tour operator shall be a resident of Malaysia, the first registered owner of the excursion bus and a holder of the tourism vehicle licence issued under the Land Public Transport Act 2010 or the Tourism Vehicles Licensing Act 1999.
The excursion bus which is eligible to be purchased by the licensed tour operator shall be used exclusively for the conveyance of tourists pursuant to the Land Public Transport Act 2010 or the Tourism Vehicles Licensing Act 1999, assembled or constructed in Malaysia pursuant to Motor Vehicles 1959 [L.N. 173/1959], a new bus that does not include a reconditioned excursion bus, and acquired within the period of YA 2020 until YA 2024.
The licensed tour operator shall be treated as the owner of that excursion bus following the purchase via hire purchase. The instalments paid in the basis period for the YA shall be taken as Qualifying Capital Expenditure (QCE) in the computation of ACA.
If the licensed tour operators have claimed the purchase of the excursion bus with the following tax incentives in a basis period for the YA. They are not eligible to claim ACA:
Summary of Income Tax Rules and Rates of Accelerated Capital Allowances for Plant and Machinery
Paragraph 13 is updated with Bill 7, 8 ,9 ,10 and 11 in the table below:
|
Num |
Type of Plant and Machinery | ITR
P.U.(A) / Year |
Effective Period
/ From |
% | |
| IA |
AA
|
||||
| 1. | Buses using natural gas and natural gas refueling equipment | 265/1997 | 01.01.1997 | 40 |
20 |
|
2. |
Machinery or plant used in industries–
(i) Building and construction; (ii) Timber; and (iii) Tin mining. |
294/1998 | YA 1998 |
30 60 60 |
20/14 20/14 20/14 |
|
3. |
Control Equipment |
295/1998 |
YA 1996 |
40
|
20 |
|
4. |
Plant and machinery for recycling of wastes or further processing of the wastes into a finished product |
505/2000 |
YA 2001 |
40 |
20 |
| 5. | Plant and machinery for a qualifying project in respect of a promoted activity or a promoted product or an agricultural project | 506/2000 | YA 2001 | 40 |
20 |
|
6. |
Equipment certified by the Ministry of Energy, Water and Communications, Malaysia as an equipment used for its own business to control the quality of electrical power | 87/2005 | YA 2005 | 20
|
40 |
|
7. |
Mould for the Production ofIndustrialised Buildings System Component | 249/2006 | YA 2006 | 40 |
20 |
|
8. |
Information And Communication Technology Equipment |
156/2018 |
YA 2017 |
20 |
20 |
|
9. |
Automation Equipment (Amendment) |
173/2020 and 252/2017 |
YA2015 – YA 2023 |
20 |
80 |
|
10. |
Machinery and equipment including information and communication technology equipment incurred from 1 March 2020 until 31 December 2021 |
268/2021 |
YA 2020 |
20 |
40 |
|
11.
|
Excursion Bus (Amendment)
|
9/2022
|
YA 2022
|
20 |
40 |
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