INVESTMENT

INCENTIVES FOR
TOURISM INDUSTRY

Fatin Farhanah Binti Mohd Yusoff

(62288214250)
Nabilah Huda Binti Mohd Hamdan
(62288214186)
Norhafizah Binti Hassan
(62288214363)
Siti Nabila Amalina Bte Shah Raini
(62288113649)
Mohamad Azrul Shafiq bin Saniain
(62288313284)
Mohd khaibir Bin Ahmad
(62288113745)

Introduction
Promoting of tourism industry to foreign and
domestic tourists by tax investments under
various relevant status.
direct tax incentive give partial from
income tax for specified period & indirect
tax incentive form exemption from duty
sales tax and excise duty

Incentive For The Tourism

Industry

The IRB and MIDA has granted the tax

incentive to the tourism project that eligible
for tax incentive.
For example
Eco-tourism
Agro-tourism
Hotel- business
Holiday camp
Theme park (3000 participants)

Incentive for the

Hotel and Tourism Industry

Pioneer status
Investment Tax Allowance (NPA)
Industrial building Allowance
undertaking New Investments(PA)
Reinvestment in Hotel and Tourism project
Hotel
Additional incentives for healthcare travel
Luxury Yacht industry

Additional incentives for

Tourism Industry

Double deduction on oversea Promotion

Double deduction on approved Trade
Fairs
Tax exemption for tour operation
Tax exemption for promoting International
conference and trade Exhibitions
Deduction on cultural performances
Car rental operators

Pioneer Status
Enjoy 5 year partial exemption
Pay tax on 30% of its statutory income
Promoted area gets exemption of 100%
on statutory income
Non-promoted area gets exemption of
70% on statutory income
Application submitted to MIDA

PIONEER STATUS
(NON PROMOTED AREA)
Purchase of motor vehicles: RM 500,000
Qualifying assets (Motor vehicles)
IA : 20%
AA: 20%

Calculate the allowances:

YA 2010

Cost
(-)IA(20%x 500)
(-)AA(20% x 500)
Residual Expenditure

RM000
500
(100)
(100)
300

YA 2010
Adjusted income
(-) Capital allowances
Statutory income
(-) Exempt income (70%)
Deemed total income

RM000
800
(200)
600
(420)
180

Promoted Area
YA 2010
Adjusted income
(-) Capital allowances
Statutory income
(-) Exempt income (100%)
Deemed total income

RM000
800
(200)
600
(600)
0

Incentive hotel

Investments for expansion, modernization and

renovation of hotels will be eligible for Pioneer
Status or Investment Tax Allowance.
Pioneer Status entitles to 100% income tax
exemption.
The allowance of 100% can be offset against
statutory income in each year of assessment
and unutilized allowance can be carried
forward to subsequent years until the whole
amount have been fully utilized.

Investment Tax Allowance

Promoted area

Non- promoted area

Examples : Perlis, Sabah,

Terengganu, Sarawak.

Alternative to Pioneer status.

Enjoy allowance of 100% of QCE Allowance of 60% of QCE

within period 5 years.
incurred within 5 years of the first
QCE.
Offset against 100% of statutory
income in the year assessment.

Offset investment tax allowance

against 70% of statutory income
in the year of assessment
Remaining 30% of statutory
income will be tax.

INVESTMENT TAX ALLOWANCE

(NON PROMOTED AREA)

60% - Exempt income

Offset against 70% of (SI)

RM000
800
1500
1400
3700
2,220
1554

30% from (SI)

= 466.2

Boats
Mini train
Trucks, lorries @ vans
ITA@

INVESTMENT TAX ALLOWANCE

(PROMOTED AREA)
RM000

Boats
Mini train
Trucks, lorries @ vans
ITA@

100% - Exempt income

800
1500
1400
3700
3,700

Offset

against 100% (SI)

3,700

Industrial
Building Allowances
QCE

incurring:
Construction/purchase of building
(manufacturing, agriculture, mining, infrastructure
facilities, research approved by Service Projects).
Hotels need to be registered with the Ministry of
Tourism.

 Eligible

for initial allowance 10% and annual

allowance of 3%.
Can be written off in 30 years.
Claims should be submitted to IRB.

INDUSTRIAL BUILDING ALLOWANCE

(IBA)
Hotel building
(-) IA (10% x 600)
(-) AA(3% x 600)
Residual Expenditure

RM000
600
(60)
(18)
522

Reinvestment Hotel and

Tourism Project

Eligible for additional round of pioneer status or

investment tax allowance
Pioneer status income tax exemption 70%
Unabsorbed CA as well as accumulated losses
can be carried forward during pioneer period
ITA 60% on QCE in pioneer period
Allowance can be offset 70% of statutory income
Eligible to apply PS and ITA for first two round of
investment
Third round only eligible apply RA
15 year exemption date

Incentives for the luxury yacht

industry
Eligible

for the pioneer status

Tax exemption of 100% for 5 year for
company carry out repair and
maintenance activities in the Langkawi
Application submit to Ministry Of Finance
Claim submit to IRB

Tax exemption for Tour Operator

Foreign Tourists

Local Tourists

Licensed by Tourism Industry

Act 1992.

Licensed under Tourism

Industry Act 1992.

Carrying on tour operating

business.

Carrying on tour operating

business.

Total number of foreign

tourists at least 750 in the
basis period of YA.

Local tourist must be at least

1500 persons in the basis
period of YA.

Certified by a letter from

Ministry of Tourism.

Certified by a letter from

Ministry of Tourism.

Exempted on tax of statutory Statutory income exempted

income derived from group provided the number local
tours
tourist is at least 1500.

Promoting conference and

trade exhibition
Conference

promoter can be a
company association or organization.
Foreign participants must be 500 or more.
Tax exemption on SI derived from
organizing conference held in Malaysia.

Deduction on Cultural
Performance
Expenditures

incurred by companies on
establishing and managing a musical or
cultural group and sponsoring local and /
or foreign cultural performances as
approved by the Ministry of Tourism.

Qualifies

for a single deduction

Qualifies for specific deduction

Car Rental Operators

Operators

of car / rental services for

tourists are eligible for excise duty
exemption on the purchase of national
cars.
Application should be submitted to the
Ministry of Finance.

Double deduction on
overseas promotion
To

be eligible the resident company or

tour operators must be registered with the
Tourist Development Corporation of
Malaysia.
Cost incurred must be primarily and
principally for the purpose of promoting
tourism to Malaysia

Allowable cost :
Expenditure on advertisement in overseas media.
Publication of brochures, magazines, articles.
Market research for new market overseas subject to prior approval
of the Minister of Tourism.
Fares outside Malaysia to negotiate or secure contract for
advertising or participating in trade fairs, conferences, forum
approved by the Minister of Tourism.

Expenses subject to a maximum

RM 300 for lodging per day,
RM 150 for food per day (During the overseas stay)
Expenditure for organizing trade fairs, conferences, forum
approved by the Minister of Tourism.
Expenditure on maintenance sales offices overseas for purpose of
promoting tourism in Malaysia.

Double deduction on
Approve Trade Fairs
To

be eligible the resident company or

tour operators must be registered with the
Tourist Development Corporation of
Malaysia.
Cost incurred must be primarily and
principally for the purpose of promoting
tourism to Malaysia.

Advantages
There many advantages in having tax incentives in
tourism project such as

Carry-over of losses from tax exemption period

such as pioneer status
Exemption from income tax for 5 years.
Duty concessions on vehicles
Duty exemption for building materials and articles
of tourism equipment
Capital Allowances

Summary

Tax incentive give a chance to tourism

project to get pioneer status that they
have many benefit such as no income tax
charge for pioneer period.
To qualify the incentives they need to get
approved by the registrar and all
application need to submitted to MIDA
All claims need to claim to IRB