Section 60E — AKTA KEWANGAN 1990

(2)

The chargeable income in relation to the source consisting of the provision of qualifying services for a year of assessment shall be the statutory income from that source reduced by any deduction falling to be made pursuant to section 43 (2) relating to that source.

(3)

The chargeable income in relation to the source or sources other than the source consisting of the provision of qualifying services for a year of assessment shall be the statutory income from that source or the aggregate of the statutory income from each of those sources, as the case may be, reduced by any deductions falling to be made pursuant to sections 43 (2) and 44 (1):

Provided that in so making the deductions under sections 43 (2) and 44 (1), no regard shall be had to the adjusted loss, if any, from

KEWANGAN the source consisting of the provision of qualifying services.

(4)

Where it appears to the Director General that the chargeable income of an approved operational headquarters company in relation to a source consisting of the provision of qualifying services ought not to have been charged to tax at the rate specified under Part VII of Schedule 1 by reason of the withdrawal of the approval of the operational headquarters company, he may, at any time within twelve years after the expiration of the year of assessment for which that rate was applied, make such additional assessments upon that company as appear to him to be necessary in order to counteract any benefit obtained under Part VII of Schedule 1.

(5)

Dividends received by an approved operational headquarters company in the basis period for a year of assessment from a related company outside Malaysia shall be exempt from tax for that year of assessment:

Provided that the exemption—

(a)

shall apply for a period of ten years of assessment commencing from the year of assessment in the basis period in which the date of approval of the operational headquarters company falls; and

(b)

shall apply only to a company which is incorporated in Malaysia on or after the coming into force of this section.

(6)

Paragraphs 5 and 6 of Schedule 7A shall apply mutatis mutandis to income exempt under subsection (5).

(7)

For the purposes of this section—

"approved operational headquarters company" means a company—

(a)

the entire issued share capital of which is held—

(i)

by a foreign company or companies; or

(ii)

by an individual or individuals who are not citizens at any time in the basis year for a year of assessment; or

(iii)

by a foreign company or companies, and an individual or individuals who are not citizens at any time in the basis year for a year of assessment;

(b)

which carries on a business in Malaysia of providing qualifying services to its offices outside Malaysia or to its related companies outside Malaysia; and

(c)

which is approved by the Minister for the purposes of this section, but does not include a company which carries on a finance business or which provides professional services;

"foreign company" means a foreign company as defined under the Companies Act 1965;

"qualifying services" means—

(a)

services provided by an approved operational headquarters company to its offices outside Malaysia or to its related companies outside Malaysia in respect of—

(i)

general management and administration;

(ii)

business planning;

(iii)

procurement of raw materials and components for use in the business of its offices outside Malaysia or its related companies outside Malaysia;

(iv)

technical support;

(v)

marketing control and sales promotion planning;

(vi)

training and personnel management;

(b)

provision of credit facilities to its offices outside Malaysia or its related companies outside Malaysia where the funds for providing such facilities are obtained from financial institutions in Malaysia; and

(c)

research and development work carried out in Malaysia on behalf of its offices outside Malaysia or its related companies outside Malaysia;

"related company", in relation to an approved operational headquarters company, means a company—

(a)

the operations of which are or can be controlled, either directly or indirectly, by the approved operational headquarters company;

(b)

which controls or can control, either directly or indirectly, the operations of the approved operational headquarters company; or

(c)

the operations of which are or can be controlled, either directly or indirectly, by a person or persons who control or can control, either directly or indirectly, the operations of the approved operational headquarters company:

Provided that a company shall be deemed to be a related company in relation to an approved operational headquarters company if—

(i)

at least twenty per cent of its issued share capital is beneficially owned, either directly or indirectly, by the approved operational headquarters company; or

(ii)

at least twenty per cent of the issued share capital of the approved operational headquarters company is beneficially owned, either directly or indirectly, by the first-mentioned company.".