The tax incentive granted by the Malaysian Government for investments in a BioNexus status company under the Income Tax (Deduction for Investment in a BioNexus Status Company) Rules 2016 [P.U.(A) 306/2016], as amended and extended by the Income Tax (Deduction for Investment in a BioNexus Status Company) (Amendment) Rules 2022 [P.U.(A) 212/2022] (collectively ‘Principal Rules’) has been further extended pursuant to the Income Tax (Deduction for Investment in a BioNexus Status Company) (Amendment) Rules 2024 [P.U.(A) 23/2024] (‘2024 Amendment Rules’).
 
The Principal Rules, inter alia, allow a qualifying person to deduct in a basis period for a year of assessment, an amount equal to the value, as approved by the Minister of Finance, of investment made by such person in a BioNexus status company, for the purpose of ascertaining the adjusted income of the qualifying person from its business. Under the Principal Rules, the incentive applied to qualifying investments made on or after 1 January 2021 but not later than 31 December 2022.
 
The 2024 Amendment Rules , which are deemed to have come into operation on 1 January 2023, have extended the incentive to qualifying investments made from 1 January 2023 to 31 December 2024.
 
It is to be noted that the conditions set out in the Principal Rules must be satisfied in order to qualify for this tax incentive, including a requirement that the investment by the qualifying person in a BioNexus status company must be approved by the Minister of Finance pursuant to an application submitted through the Malaysian Bioeconomy Development Corporation Sdn Bhd. The Principal Rules, as amended by the 2024 Amendment Rules, require the aforesaid application to be submitted on or after 1 January 2023 but not later than 31 December 2024.
 
Alert by Faith Chan (Associate) of the Corporate Practice of Skrine.