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Income tax exemption on medical tourism extended
A company that provides private healthcare services to health travelers (as defined) is eligible for a tax exemption on its income. The exemption is equivalent to an investment tax allowance of 100% on the qualifying capital expenditure incurred for a period of five (5) years. Pursuant to Income Tax (Exemption) (No. 2) Order 2020, the incentive applied to applications received by the Malaysian Investment Development Authority (MIDA) between 1 January 2018 and 31 December 2020 and was given to new private healthcare facilities as well as existing ones engaged in expansion, modernization or refurbishment, subject to conditions (see Tax Alert No. 7/2020).
Following the above, to continue promoting the export of private healthcare services in Malaysia, the Income Tax (Exemption) (No. 2) 2020 (Amendment) Order 2021 [P.U.(A) 245] was gazetted on 31 May 2021 to provide that the incentive would now apply to applications received by MIDA until 31 December 2022 (previously 31 December 2020).
The guidelines for this incentive are also available on the MIDA website [Forms & Guidelines - MIDA | Malaysian Investment Development Authority > Services sector> G) Private Health Care Facilities]