Incentives for ASP

Related topics: | Investment Incentives |

Incentives for Approved Service Projects (ASP)

Projects in the transportation, communications and utilities sub-sectors of the service sector, approved by the Minister of Finance are eligible for tax incentives.

The incentives offered are as follows:-

Exemption Under Section 127, Income Tax Act 1967
Generally companies undertaking ASP are eligible for exemption of 70% of the statutory income for 5 years. However, companies undertaking ASP in Sabah, Sarawak and the designated "Eastern Corridor" of Peninsular Malaysia will be eligible for exemption on 85% of the statutory income for 5 years. Companies undertaking ASP of national and strategic importance will be eligible for 100% exemption of statutory income for 10 years.

Investment Allowance (IA) Under Schedule 7B Income Tax Act 1967
Generally companies undertaking ASP are eligible for IA of 60% on qualifying capital expenditure incurred within 5 years from the date the capital expenditure is first incurred. The allowance can be used to set off against 70% of the statutory income.

However, companies undertaking ASP in Sabah, Sarawak and the designated "Eastern Corridor" of Peninsular Malaysia will be granted IA of 80% on qualifying capital expenditure incurred within 5 years from the date the capital expenditure is first incurred. The allowances can be utilised to set off against 85% of the statutory income.

Companies undertaking ASP of national and strategic importance will be granted IA of 100% on qualifying capital expenditure incurred within 5 years from the date the capital expenditure is first incurred. The allowance can be utilised to set off against 100% of the statutory income. Any unutilised allowance can be carried to the subsequent years until it is fully utilised.

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