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Extension of the application period for investment deduction in BioNexus companies
The Income Tax (Deduction for Investment in a BioNexus Status Company) Rules 2016 provide that a qualifying person will be given a tax deduction equivalent to the actual value of investment made in a BioNexus Status company. The qualifying investment must be made between 1 January 2016 and 31 December 2020. The qualifying person must submit an application to the Minister of Finance (MoF) through Malaysia Bioeconomy Development Corporation Sdn. Bhd. (Bioeconomy Corporation) for approval to invest in a BioNexus Status company on or after 1 January 2016, and obtain the necessary approval, in order to claim the tax deduction. The incentive is also subject to other conditions (see Tax Alert No. 27/2016).
In Budget 2021, it was proposed that the application period for several incentives, including the BioNexus Status incentive, be extended to 31 December 2022 (see Take 5: Malaysia Budget 2021).
To legislate the above proposal, the Income Tax (Deduction for Investment in a BioNexus Status Company) (Amendment) Rules 2022 [P.U.(A) 212] were gazetted on 22 June 2022. The Amendment Rules provide that the incentive will also apply to:
(a) qualifying investments made, and
(b) applications submitted to the Minister through Bioeconomy Corporation
between 1 January 2021 and 31 December 2022.
The Amendment Rules are deemed to have come into operation on 1 January 2021.