pr no 2 2022–Tax Incentive for Organizing Conferences in Malaysia

Public Ruling (PR) No. 2/2022 – Tax Incentive for Organizing Conferences in Malaysia

The IRB has recently issued PR No. 2/2022: Tax Incentive for Organizing Conferences in Malaysia, dated 29 July 2022. The new six-page PR comprises the following paragraphs and sets out three examples:

1.0          Objective

2.0          Relevant provisions of the law

3.0          Interpretation

4.0          Introduction

5.0          Tax incentive

6.0          Separate accounts

7.0          Submission of income tax return form

8.0          Disclaimer

Broadly, the PR explains the tax incentives available to:

(a)   Conference promoters promoting and organizing conferences in Malaysia as their main activity; and

(b)  A qualifying person whose main activity does not include promoting and organizing conferences in Malaysia

Some of the key points are outlined below. 

• The PR explains and provides two examples to demonstrate the tax incentive given pursuant to the Income Tax (Exemption) (No. 53) Order 2000 [P.U.(A) 500].

P.U.(A) 500 provides that a conference promoter, which is a resident company, association or organization whose main activities are promoting and organizing conferences in Malaysia, is exempted from tax on statutory income derived from organizing conferences held in Malaysia. The exemption, which took effect from the year of assessment (YA) 1997, is granted on condition that the conference promoter brings in at least 500 foreign participants in the YA.

• The PR also explains and provides an example to demonstrate the tax incentive given pursuant to the Income Tax (Exemption) (No. 4) Order 2021 [P.U.(A) 195] (see Tax Alert No. 9/2021).

P.U.(A) 195 provides that a qualifying person, which is a resident company, association or organization which carries on a business or activity other than the business or activity of promoting and organizing conferences, is exempted from the payment of income tax in respect of statutory income derived from organizing conferences held in Malaysia. Similar to P.U.(A) 500, the income tax exemption will apply only if the qualifying person brings in at least 500 foreign participants in the YA.

• The PR reiterates that the exemption granted under P.U.(A) 500 or P.U.(A) 195 does not absolve the conference promoter or qualifying person from any requirement to submit any return, statement of accounts or any other information as required under the ITA. A separate account will also need to be maintained for the income exempted under both Orders.