Double Tax Deduction for PROTÉGÉ
18 May 2021
The Income Tax (Deduction for Training Costs under the Professional Training and Education for Growing Entrepreneurs (PROTÉGÉ-Ready to Work (RTW) Programme) Rules 2021
”) were gazetted on 11 May 2021 and are deemed to have come into operation on 11 September 2019.
The Rules, inter alia
, provide for double tax deduction on certain expenses incurred under the Professional Training and Education for Growing Entrepreneurs (PROTÉGÉ-Ready to Work (RTW) Programme) approved by the Ministry of Entrepreneur Development and Cooperatives (“Training Programme
The Rules allow a company incorporated under the Companies Act 2016 which is approved by the Ministry of Entrepreneur Development and Cooperatives to participate in the Training Programme (“qualified company
”) to claim a double tax deduction
on the following expenditure incurred on a trainee (i.e. a Malaysian citizen graduate who is unemployed or under an employment which does not commensurate with his qualification) who is undergoing the Training Programme:
- monthly training allowance (at least RM1,000.00 paid to the trainees for a maximum period of 12 months);
- expenditure incurred for the training provided to the trainees;
- trainees’ food, travelling and accommodation allowances during the Training Programme; and
- fees paid to a person appointed to conduct soft-skills training under the Training Programme.
It is to be noted that the total amount that can be deducted for the expenditure described in paragraphs 2 to 4 above is restricted to RM5,000.00 for each trainee for each Training Programme.
A qualified company which seeks to claim any deduction under the Rules must provide a confirmation from the Ministry of Entrepreneur Development and Cooperatives specifying that:
- the Training Programme has been approved and the approval date begins from 11 September 2019 until 31 December 2025; and
- the Training Programme is to commence within 12 months from the date of approval.
The Rules encourage companies (by way of a double tax deduction) to participate in the Training Programme to equip unemployed or under-employed Malaysian graduates with the necessary skills and knowledge to be more employable in the current job market.
Alert prepared by Desmond Liew (Associate) of the Tax Practice Group of Skrine.