PETALING JAYA: Malaysia wants to be a global centre for the aerospace industry as well as a preferred location for business expansion and strategic partnerships in the Asia-Pacific region.
In a statement, the Ministry of Finance said to further promote the growth of the aerospace industry in Malaysia and to attract more foreign direct investments, a comprehensive tax incentive package had been provided.
This package focuses on four main groupings in the aerospace industry, consisting of design, manufacturing and assembly; operator; support and regulatory.
The design, manufacturng and assembly group consists of activities such as research, design and development, systems integration, manufacturing and assembly, and would qualify for income tax exemption for five years, subject to evaluation in terms of investment level, value-added technology and other criteria.
The operator group, consisting of general aviation, will qualify for investment tax allowance of 100% on the qualifying capital expenditure incurred within 10 years, subject to evaluation in terms of investment in fixed assets over RM150mil within five years.
The support group, consisting of maintenance, repair and overhaul (MRO) and aerospace training, will qualify for income tax exemption of 100% of statutory income for up to 10 years for companies that provide MRO and services related to MRO of aerospace end-products, such as aircraft, spacecraft, missile/rocket, communication and navigation systems, simulator, including equipment, component, accessories, etc.
The group will also qualify for income tax exemption of 100% of statutory income for up to 15 years for companies involved in conversion uprade and refurbishment or re-manufacture of aerospace end-products.
An investment tax allowance of 60% on the qualifying capital expenditure will be incurred within five years for MRO companies currently operating in Malaysia and undertaking expansion, modernisation or automation of existing business or diversifying existing business into any realted product within the same industry.
Furthermore, double deduction on expenses will be incurred by the employers in training their employees in pilot conversion and instructor pilot training.
The regulatory group, consisting of companies undertaking aerospace-related certification, standard development, testing and evaluation and licensing activities, will qualify for investment tax allowance of 100% of statutory income for a period of five years or exemption of statutory income equivalent to 60% of the qualifying capital expenditure incurred within five years.
The above incentive package by the Malaysian Industrial Development Authority will be effective for applications received from Jan 1, 2010 to Dec 31, 2014.
This post has been edited by hack3line: Dec 25 2009, 10:14 AM