IRB SETS 10-YEAR MAXIMUM APPROVAL PERIOD FOR TAX EXEMPTION INCENTIVES FOR IOT

PUTRAJAYA, Dec 2 (Bernama) -- The maximum approval period for tax exemption incentives granted to institutions, organisations and funds (IOT) under subsection 44(6) of the Income Tax Act 1967 has been set at 10 years, effective 27 Nov 2025, according to the Inland Revenue Board (IRB).

In a statement today, IRB said the decision covered the approval of tax benefits related to IOT.

It said that the benefits included tax deductions on donations or contributions made to IOTs, capped at 10 per cent of the aggregate income of individuals or companies, as well as exemptions on all income received by IOTs throughout the approval period.

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“IRB will issue a new notification letter to any IOT with an approval period set to expire on Dec 31 to explain the application of the 10-year approval period.

“For any IOT granted a new or extended approval by IRB before Nov 27, 2025, the period stated in the approval will remain in force, and the new 10-year period will only take effect once the current approval period ends,” the statement said.

RB said it would conduct a comprehensive review of compliance with approval conditions from time to time, in accordance with the requirements of the Act, taking into account the document retention period and the time limits provided under the Income Tax Act 1967.

For that purpose, the board said IOT must ensure full compliance at all times with all approval conditions as stipulated in the guidelines in force.

However, if there is a violation of the approval conditions, the IOT approval under subsection 44(6) of the Income Tax Act 1967 may be withdrawn, and the IOT’s income may be taxed in accordance with subparagraph 13(1)(a) of Schedule 6 of the Act.

-- BERNAMA