COMPUTATION OF CHARGEABLE INCOME ~ COMPANIES

Business income
Profit before tax
(-) Other income (income not falling under S4(a)
(+) Non allowable deductions
1. Expenses that are not incurred
~ general provision for bad & doubtful debts
~ provision for gratuity/retirement benefits
~ provision for warranty cost, stock obsolescence
~ depreciation
~ amortisation for renovation of premises, lease amortisation
~ unrealized exchange loss in relation to acquisitionof raw materials
~ provision for repair and maintenance
~ preliminary expenses written off

2. Capital expenditure
~ cost of printing & distribution of annual reports
~ stamp duty & secretarial fees for increased share capital
~ stock listing expenses
~ pre-commencement business expenses
~ entrace fees to club
~ legal & profesional fees relating to violation of laws, capital structure of company,
acquisition of loan @ assets
~ donation ( samada approved @ not)
~ lump sum payment for early termination of lease
~ loan written off in relation to that employees @ suppliers
~ fine imposed for violation of law
~ penalty on WT
~ foreign exchange gain/loss on acquisition of PPE, repayment of foreign loan
~ registration of trademark
~ fees of designing comp. logo
~ compensation to competitor to restrict competition/covenant
~ loss on disposal of long term investment

3. Expenses related to investment income

~ add back..will be set off against ind. Investment source of income

4. S39 prohibited expenses

~ private & domestic expenses (dual purpose)
~ expenses that are wholly n exclusively laid out @ expended for the purpose of
producing gross income - bayar gaji kt family ke…
~ capital employed @ money withdrawn as capital
~ contibution to unapproved pension/provident/saving scheme
~ WT & penalty on late payment on WT imposed on interest, royalty, contract payment,
S4A payment, s4f payment to NR x byr kt IRB
~ leave passage (selain dr yearly leave passage to employees)
~ license @ permit fees to extract timber to persons other than State Government
statutory authority @ body approved by Minister
 ~ lease rental > RM50,000 @ RM1OO,000 in aggregate on passenger vehicle
~ entertainment to non employees (including reimbursement to staff in relation to
entertainment of client @ entertainment allowance to employees) 50% deduction.
Kalo related to sales br (-) semua..

(+) Capital assets expensed off to profit & loss

~ renovation of factory, office premise
~ improvement for repairs
~ small value capital items (kusi, calculator)
~ installation cost of machines charged in repair & maintenance acc.
~ cost of stand used in advertising
~ deposits paid for telephone & utilities
~ replacement of electrical alarm system

(-) Double Deduction

1. for promotional of export(MS440)
~ incurred in respect of publicity & advertisements in any media outside Malaysia
~ expenses directly attributale to the provision of sample without charge to prespective
customers outside Malaysia + cost of delivery of the samples.
~ directly attributale to carrying out export market research @ the obtaining of export
marketing information
~ directly attributale to the preparation of tenders for the supply of goods @ agriculture
produce to prospective customer outside Malaysia

2.for approved training

a. Manufacturing comp.
~ approved by
Industrial
the Malaysian
Development Authorithy
~ conducted by a training institution

b. Non Manufacturing comp.

~ approved by the Minister of Finance @ any agency appointed by the Minister of Fin
~ conducted by training instituition

c. Company carrying on hotel @ tour operating

~ registered with the Tourist Development Corporation Of Malaysia
~ approved by Minister of Culture, Arts & Tourism
~ conducted by a training instituition

d. Training of non-employee handicapped person

~ registered with the Ministry of National Unity & Social Development
~ approved by the Minister of Finance , conducted in Malaysia
~ conducted by a training instituition
~ purpose of enhancing his employment prospect
~ should provided with letter of approval from training instituition @ authorithy

3. Overseas expenses incurred by R comp. carrying on a hotel @ tour operating

for promotion of tourism

4. Research expenditure
~ approved research projects undertaken by a comp. either in house @ contracted to
 external research comp. @instituition.
~ the comp. participating in industrial adjustment approved s13A - expenses incurred
10 years
~ expenses incurred by companies for the use of facilities & services provided by app
research comp. @ institution, @ reseach development comp. @ a contract research
comp./institution
~ contribution in cash to approved research comp./institution
~ approved research expenditure by the Mininster

5.remuneration of handicapped employees

6. insurance premium paid for the import of cargos.

~ insurance comp. incorporated in Malaysia

7. export crdt insurance premium

~ paid to the Malaysian Export Crdt Insurance Bhd(MECIB)

8. insurance premium paid for export cargo insured with local insurance comp
~ insurance comp. incorporated in Malaysia

9. approved international trade fair

~ expenses incurred for participation held in Malaysia for the promotion of exports.
~ approved by Minister of International Trade & Industry.
~ exclude the cost of exhibits(setup booth)

10. interest payable on loans to small scale business

~ employer needs to produce certificate of approval from authority & interest must f
deductible by virtue s33

11. promotion of export of services by service & uility sector

~ revenue expense yg berkaitan to the promotion of export of services

12. avertising on Malaysian brand name goods

~ >70% Malaysian owned
~ registered in Malaysia @ outside Malaysia
~ mus be achived export quality standard

13. freight charges incurred for the export of rattan & wood based products
~ the person claiming must engaged in manufacture of rattan & woods based produ

14. ship freight charges for shipping goods from Sabah & Sarawak to Peninsul
~ incurred by manufacturer & used ports in Peninsular Mas

15. registration of patent, trademarks, & product licensing in overseas (2006)

~ for the purpose of promoting the export of goods, agricultural products manufactu
produced,processed, graded @ sorted & assembled in Malaysia

16. quality Standard & halal certification (2005)

(-) Revenue expenses capitalized

 ~ wholly & exclusively, s33
~ wages, insurance, lease

(-) Capital expenditure

1. properietary right (available to manufacturing comp.)
~ must 70% owned by Malaysia
~ proprieatry mean patents, design, trademark
~ 20% deduction for every year for 5 years
~ cost include - purchase of consideration of proprietary rights
- consultancy fees
- legal fees
- stamp duties

2. RosettaNet
~ 60% Malaysian owned
~ Rossanet Malaysia Berhad
~ Cost of new computer, hardware n software & networking device
~ cost of new office equipment
~ basic salary of employees not more than 3 years
~ basic salary of employees on secondment from a qualifying comp. to a local
manufacturer for a period 2-6 months
~ cost relating to - fees
- travelling expenses
- accomodation of trainers
- rental of facilities
for the provision of training to the employees of a local manufacturer (x) > RM100,000
~ verified by SMIDEC
~ Qualifying comp. member of Rosetta Net Malaysia Berhad

3. Cost of developing website

~ 20% of each year for 5 years

4. Acquisition of foreign owned comp.

~ 20% of each year for 5 years
~ 60% ownership by Malaysia
~ listed comp. in Bursa Saham
~ tax deduction - value of shares acquired
- professional fees paid to bankers-valuers-auditors-acc.-tax agents
- cost of transfer + stamp duties
- travelling & accomodation expenses incurred for the purpose of th
acquisition

5. Invitation to potential comp.

~ respect of hotel accomodation > 3 night, >RM300 per day
~ respect of sustenance > 3 nights, > RM150 per day
~ verified by MATRADE

6.Information technology related expenses (2000)

~ improvement of management @ production
 ADJUSTED BUSINESS INCOME
(+) Balancing charge/ Balancing allowance
(-) Capital allowance (LIMITED TO ADJUSTED INCOME, KALO > CARRY FORWARD)
~ PPE
~ IBA
STATUTORY INCOME 1
STATUTORY INCOME 2
STATUTORY BUSINESS INCOME FROM PARTERNSHIP
AGGREGATE STATUTORY INCOME FROM BUSINESS
(-) PREVIOUS business loss
(+) STATUTORY INCOME FROM OTHER SOURCES (S4c, d, f-NR WT)
AGGREGATE INCOME
(-) CURRENT year business loss
(-) Pre-operational business expenditure
~ RM400 per day for accomodation & sustenance
(-) Proportion of permitted expense for IHC
(-) Income exempted by Ministry under S127
(-) Trust annuity
(-) Approved donation
~ Gift of money to Government/ local authorities
~ Gift of money to approved instituition @ org.
~ Gift of money@ in kind to any approved sports activity/body RESTRICTED
~ Gift of money@in kind to any approved sport body@act. 10% OF AI
~ Gift of money @ in kind for any project of national interest approved by MOF
~ Gift of artifacts, manuscripts @ paintings
~ Gifts of money for the provision of library facilities @ to libraries
~ Gifts of painting to the National Art Gallery @ any state art gallery
(-) Business zakat - restricted 2.5% of AI
(-) Group Relief
(-) Carry back losses
TOTAL INCOME
(+) dividends deemed as total income
CHARGEABLE INCOME
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