Double deduction on expenses incurred to conduct PROTÉGÉ–RTW Programme
Double deduction on expenses incurred to conduct Professional Training and Education for Growing Entrepreneurs - Ready to Work Programme
Currently, pursuant to the Income Tax (Deduction for Training Costs under Skim Latihan 1Malaysia for Unemployed Graduates) Rules 2013 [P.U.(A) 260/2013], a qualifying company is given a double deduction in respect of expenses incurred for conducting the 1Malaysia training scheme approved by the Economic Planning Unit (EPU) under the Prime Minister’s Department for a Malaysian unemployed graduate (see Tax Alert No. 17/2013].
In September 2019, the Skim Latihan 1Malaysia was rebranded to PROTÉGÉ, short for Professional Training and Education for Growing Entrepreneurs.
Following the above, the Income Tax (Deduction for Training Costs under the Professional Training and Education for Growing Enterpreneurs (sic) (PROTÉGÉ-Ready To Work (RTW)) Programme) Rules 2021 [P.U.(A) 228/2021] were gazetted on 11 May 2021 and are deemed to have come into operation on 11 September 2019.
The Rules provide that in ascertaining a qualifying company’s adjusted income from its business for a YA, a double deduction shall be given for outgoings and expenses incurred by the qualifying company during that basis period to conduct the PROTÉGÉ-Ready To Work Programme (Training Programme) approved by the Ministry of Entrepreneur Development and Cooperatives (MEDAC). The Training Programme is conducted for the trainees for eight (8) to 12 continuous months.
The double deduction is given for the following outgoings and expenses:
(a) Monthly training allowance of not less than RM1,000 paid to the trainees for a maximum period of 12 months
(b) Expenditure incurred for the provision of training
(c) Expenditure incurred for food, travelling and accommodation allowances for the trainees during the Training Programme
(d) Fees paid to the person appointed to conduct soft-skills training under the Training Programme
For items (b), (c) and (d), the total deductions allowable for each trainee shall not exceed RM5,000 for each Training Programme.
The following terms have also been defined in the Rules:
1. Qualifying company
A company:
(a) Incorporated in Malaysia under the Companies Act 2016, and
(b) Approved by MEDAC to participate in the Training Programme
2. Trainee
A Malaysian citizen graduate undergoing the Training Programme, who is:
(a) Unemployed, or
(b) Employed in a job which does not commensurate with his qualification
The qualifying company claiming the deduction will also be required to provide a confirmation from MEDAC specifying that:
(a) The Training Programme has been approved, and the date of approval is between 11 September 2019 and 31 December 2025, and
(b) The implementation of the Training Programme shall commence within 12 months from the date of approval of the Training Programme
With this, P.U.(A) 260/2013 is revoked. However, any approval which has been granted under P.U.(A) 260/2013 before 11 September 2019 will remain in place and shall be deemed to be granted under P.U.(A) 228/2021. In addition, any application for deduction made before 11 September 2019 which is pending approval shall be dealt with as if P.U.(A) 260/2013 has not been revoked.
