To qualify as an International Trading Company, a company must satisfy the following criteria :

a. be incorporated in Malaysia;

b. achieve an annual sales turnover of more than RM 25 million;

c. have an equity holding of at least 70% by Malaysian;

d. market manufactured goods, especially those from the small and medium scale industry; and

e. be registered with MATRADE.


In addition, the company must satisfy the following conditions to enjoy the tax incentive :

  1. not more than 20% of annual sales is derived from trading of commodities;
  2. not more than 20% of annual sales is derived from the sales of the goods of related companies; and
  3. use local services such as banking, finance, insurance, shipping, ports, airports, haulage and warehousing.


The computation of the amount exempted is illustrated below :

 
Preceding year export sales RM 40 million
Current year export sales ......50 million
-----------------------
Increase in export sales RM 10 million
-----------------------
   
Increased export sales over current year export sales RM 10 million
-----------------------
RM 50 million
  = 20%
   
Current year statutory income in relation to export sales RM 8 million
   
Statutory income for increased export sales RM 8 million x 20%
  = RM 1.6 million
   
Exempt income RM 1.6 million x 70%
  = RM 1.12 million


This proposal will be effective from year of assessment 1999.


|Home|Contents|

This report is reproduced with permission from Kassim Chan Tax Services Sdn Bhd (36421-T) and Deloitte Touche Tohmatsu Tax Services Sdn Bhd (151497-P). 7th Floor, 3 Cangkat Raja Chulan 50200 Kuala Lumpur, Malaysia or P.O.Box 11151, 50736 Kuala Lumpur, Malaysia.
Telephone: (603) 232 0711, Facsimile: (603) 2304746, (603) 230 0585

No part of this report may be reproduced in any form without the prior consent of Kassim Chan Tax Services Sdn Bhd and Deloitte Touche Tohmatsu Tax Services Sdn Bhd.

Another Malaysian resource site designed and hosted by MIR Communications Sdn Bhd.