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BRUNEI DARUSSALAM |
INDONESIA |
LAO PDR |
MALAYSIA |
MYANMAR |
PHILIPPINES |
SINGAPORE |
THAILAND |
VIETNAM |
| 1. Corporate Income Taxes |
| For pioneer projects:
* Up to $250,000
- 2 years
* Over $250,000 - $500,000
- 3 years
* Over $500,000 - $1million
- 4 years
* Over 1 million
- 5 years |
Certain industries which are considered as having significant contribution for national industrial development are exempted from income tax for the period of maximum of 10 years. |
* in highly unusual circumstances (e.g., for large hydroelectric projects) tax holidays may be negotiated on a case by case basis.
* The basic tax rate for foreign investment projects is 20% (compared to the standard tax rate of 35% domestic investors in non-promoted sectors). |
Pioneer Status
* Generally, a company granted Pioneer Status will enjoy partial exemption from the payment of income tax. It will only have to pay tax on 30% of its statutory income (The current corporate tax rate is 28%.). The period of tax exemption is five years, commencing from the production date as determined by the Minister of International Trade and Industry. Any unabsorbed losses cannot be carried forward to post pioneer period.
* In order to promote certain investment e.g. strategic projects, high tech industries, R&D activities, strengthening industrial linkages, and multimedia industries, full income tax exemption and /or a tax relief period of 5 to 10 years can be considered.
* As an added incentive, companies located in the states of Sabah and Sarawak in East Malaysia and the designated 'Eastern Corridor'1 of Peninsular Malaysia, will only have to pay tax on 15% of their statutory income during the tax exemption period of five years.
Investment Tax Allowance (ITA)
* As an alternative to Pioneer Status, a company may apply for Investment Tax Allowance. A company granted Investment Tax Allowance will be given an allowance of 60% in respect of qualifying capital expenditure incurred within five years from the date on which the first qualifying capital expenditure is inucrred. The allowance can be utilised to offset against 70% of the statutory income in the year of assessment. Any unutilised allowance can be carried forward to subsequent years until the whole amount has been used up. 30% of the statutory income will be taxed at the pre-vailing company tax rate.
* As an added incentive, companies located in the States of Sabah and Sarawak in East Malaysia and the desig-nated 'Eastern Corridor' of Peninsular Malaysia will be granted an allowance of 80% in respect of the qualifying capital expenditure incurred. The allowance can be utilised to offset against 85% of the statutory income in the year of assessment. |
* Foreign investors are granted a minimum of 3 year corporate income tax exemption, extendible on a case-by-case basis. |
Income tax holiday for newly registered pioneer projects for six years from the start of commercial operations.
A new non-pioneer project can receive a tax holiday of four year. An expansion project can receive a tax holiday for three years. All companies located in less developed regions in the Philippines can qualify for a tax holiday of 6 years (not including investment in mining and forestry or processing of minerals and forest products.) |
Pioneer projects will be granted exemption for 5-10 years. |
Zone1:
* 3 years exemption for projects that export at least 80% of total sales or that are located in industrial estates or promoted industrial zones. (Zone 1 consists of Bangkok and five surrounding provinces: Pathum Thani, Samut Prakan, Samut Sakhon, Nakhon Pathom, and Nonthaburi.)
Zone 2:
* 3 years exemption, extendable to 7 years for projects that locate in industrial estates or promoted industrial zones. (Zone 2 consists of the ten provinces surround Zone 1: Ayutthaya, Ang Thong, Chachoengsao, Chon Buri, Kanchanaburi, Nakhon Nayok, Ratchaburi, Samut Songkhram, Saraburi, and Suphan Buri)
Zone 3:
* 8 years exemption and 50% reduction for additional 5 years period after the exemption period.
* Priority activities: 8 years regardless of location. |
Profits Tax
* Enterprises with foreign-owned capital and foreign parties to business cooperation contracts shall be subject to profits tax at a rate of twenty five (25) per cent on the profits earned; where investment in encouraged, the rate of profits tax shall be twenty (20) per cent on the profits earned. Where the investment satisfies many investment promotion criteria, the rate of profits tax shall be fifteen (15) per cent on the profits earned. Where the investment is specially encouraged, the rate of profits tax shall be ten (10) per cent on the profits earned.
* Depending on the investment sector and region an enterprise with foreign owned capital and a foreign party to a business co-operation contract may be exempted from profits tax for a maximum period of two years commen-cing from the first profit-making year and may be entitled to a fifty (50) per cent reduction of profits tax for a maximum period of two successive years. Enterprise with foreign owned capital and foreign parties to business co-operation contract implementing a project which satisfies a high number of investment promotion criteria shall be exempted from profits tax for a maximum period of four years commencing from the first profit-making year and may be entitled to a fifty (50) per cent reduction of profits tax for a further maximum period of four (4) years. For cases where investment is specially encouraged, exemption from profits tax may be allowed for a maximum period of eight (8) years. |
| 2. Exemption from or reduction of taxes on imported capital goods |
| Exemption for pioneer project. |
Exemption/reduction of import duty:
* Main machinery: 100%
* Supplementary machinery: 50%
* Spare parts: 100% (up to 5% of main machinery) |
Foreign investments pay an import duty on equipment, means of production, spare parts and other materials used in the operation of their investment projects at a uniform flat rate of 1% and no turnover tax. |
Most machinery and equipment not produced locally are not subject to import duty and sales tax. However, machinery and equipment with import duty and sales tax can be considered for exemption if:
* they are used directly in the production process, and
* the equipment is used for controlling environmental pollution, recycling of material, product testing and quality control. |
The Union of Myanmar Foreign Investment Law 1998 grants exemption from customs duty and other internal taxes on imported capital equipment and materials during the construction, exploration and development period. |
Firms located outside the National Capital Region (NCR) and those engaging inactivities with long gestation periods (registered on or before December 31, 1994) shall be entitled to tax and duty free importation of capital equipment and accompanying spare parts until December 31, 1999. |
N.A. |
Zone1:
* 50% reduction for projects that export at least 80% of total sales, or locate in industrial estates or promoted industrial zones.
Zone 2:
* 50% reduction.
Zone 3:
100% exemption. |
An enterprise with foreign-owned capital and parties to business cooperation contracts shall be entitled to exemption from import duties in respect of the following:
* Equipment and machinery imported as part of the fixed assets of the enterprise or as part of the fixed assets for the implementation of the business co-operation contract.
* Specialised means of transport which form part of the technological process imported as part of the fixed assets of the enterprise or as part of the fixed assets for the implementation of the business co-operation contract, and means of transport used for transporting employees (automobiles of twenty four (24) or more seats and watercraft).
* Components, parts, spare parts, support structures, moulds and accessories of the above equipment, machinery, specialised means of transport and means of transport.
* The exemption of import duties applicable to the above equipment, machinery and means of transport shall also be applied in the case of expansion of a project and replacement or renewal of technology.
*In addition to the equipment, machinery, and specialised means of transport imported for the purpose of forming the fixed assets of an Enterprise which shall be exempted from import duties, Enterprises engaging in hotel industry, offices and apartments for lease, residential premises, commercial centres, technical services, supermarkets, gold courses, training, culture, finance, banking, insurance, auditing and consultancy services shall be permitted to once-off exemption from import duties in respect of equipment provided for in Appendix II.B attached Decree 10/1998/ND-CP. |
| 3. Exemption from or reduction of taxes on imported raw materials |
| Exemption for pioneer project. |
Two years exemption from the date of commercial production |
* Raw materials and intermediate components imported for the purpose of processing and then re-exported are exempt from import duties and turnover tax.
* Raw materials and intermediate components imported for the purpose of achieving import substitution are eligible for special duty reductions in accordance with the Government's applicable incentives policies. These tariff incentives are negotiated on a case by case basis with the FIMC, the Ministry of Finance, and the Prime Minister's Office. |
The level of exemption from import duty granted on raw materials/components depends on whether the finished products are sold in the domestic market or are exported.
Manufacture of goods for export
* In the case of companies manufacturing finished products for the export market, full exemption from import duty on direct raw materials are normally granted, provided the raw materials/components are not manufactured locally or, where they are manufactured locally, are not of acceptable quality and price.
Manufacture of Goods for the Domestic Market
* Partial exemption from import duty on direct raw materials and components that are not manufactured locally can be considered for any manufacturing company if it complies with the equity condition as stipulated in the manufacturing license. Until the year 2000, companies are given the waiver from compliance to the equity condition.
* Full exemption from import duty is normally given if:
- The finished product made from dutiable raw materials/components is not subject to any import duty
- The manufacturing company has complied with the government policy guidelines in terms of equity participation, management and employment structure in all categories.
- Companies are located in the States of Sabah and Sarawak and the designated 'Eastern Corridor' of Peninsular Malaysia.
In all other cases, (except for the assembly industry) partial exemption can be considered where manufacturers are normally required to pay import duty of 2% or 3% ad valorem. For raw materials which are subject to import duty of 3% or less, applications for exemption will not be considered.
To encourage the manufacture of local components for the assembly industry, imports of components which attract import duty of 5% ad valorem and above will be required to pay an import duty of at least 5% ad valorem. |
During the first three years of commercial production and operational periods, exemption from customs duty and other internal taxes on imported raw materials is granted. |
Tax credits for and duties on raw material used in the manufacture, processing or production of exports. |
N.A |
One year exemption will be provided for raw or essential material used in export products for projects exporting at least 30% of total sales for projects located in Zone 1 and 3.
Five year exemption for projected located in Zone 3. Moreover, the promoted project in Zone 3 will also be granted 75% reduction of import duties for five years on raw or essential materials used for domestic sales (except Laem Chabang Industrial Estate). |
* Raw materials and supplies imported for the implementation of BOT, BTO and BT projects.
* Species of plants and animals or specialised agricultural chemicals permitted to be imported for the implementation of agricultural, forestry and fishery projects.
* Construction materials imported for the purpose of forming the fixed assets which have not been produced locally.
* Raw and other materials imported for manufacturing machinery and equipment used in a technological process, or for manufacturing components, parts, spare parts, support structures, appliances, moulds and accessories accompanying the above equipment and machinery.
* Other goods and materials required for projects in which investment is specially encouraged as determined by the Prime Minister.
* The above mentioned exemption from import duties in respect of raw and other materials shall also be applied in the case of expansion of a project and replacement or renewal of technology.
Investment projects included in the List of projects where investment is specially encouraged and investment projects in mountainous, remote or distant regions as stipulated in Appendix I attached to Decree 10/1998/ND-CP shall be exempted from import duties in respect of raw materials used for production for a period of five (5) years from the commencement of production. |
| 4. Other Incentives |
|
N.A |
N.A |
Other incentives:
* All exported finished products are exempted from export duties.
* For products located in the plains areas, but outside major cities, the incentive profit tax rate is 15%. For projects located in remote and mountainous regions, the incentive tax rate is 10%. |
Other Incentives:
* Reinvestment Allowance
* Incentives for Strategic Projects
* Incentives for Small-Scale Companies
* Incentives for High Technology Industries
* Incentives for Industrial Adjustment
* Incentives for Training
* Incentives for R&D
* Incentives for Operational Headquarters
* Incentives for Multimedia Super Corridor and Software Development
* Incentives for Export
* Incentives to Strengthen Industrial Linkages
* Incentives for Promoting Malaysian Brand Names
* Incentives for International Procurement Centres
* Incentives for Storage, Treatment and Disposal of Toxic and Hazardous Wastes
* Incentives for the Agricultural Sector
* Incentives for the Tourism Industry
Please refer to MIDA's publication 'Malaysia: Investment in the Manufacturing Sector - Policies, Incentives and Facilities,' or see MIDA's Internet Homepage: HYPERLINK http://www.mida.
gov.my
|
Other incentives are also provided such as:
* Exemption or relief from income tax on profits which are maintained in a reserved fund and re-invested within one year.
* Right to accelerate depreciation.
* Relief from income tax up to 50% per cent on the profits accrued from exports.
* Right to pay income tax on behalf of the foreigners employed and to deduct the same from the assessable income of the enterprise.
* Right to pay income tax of the foreign employees at the rates applicable to the citizens of Myanmar.
* Right to deduct the expenditures for research and development carried out within the State.
* Right to carry forward and set off losses up to 3 consecutive years, from the year the loss is sustained. |
N.A |
N.A |
N.A |
* During business operation, the Enterprise with foreign-owned capital shall be permitted to carry forward losses incurred in any tax year to the following tax year and set off against the profits of subsequent years for a maximum of five (5) years.
* Where reinvestment is made in encouraged investment projects, the total or a part of the profits tax paid in respect of the reinvested profits shall be refunded. |
| 5. Foreign Loan |
| There is a 20% withholding tax for interest paid to non-resident lenders. However, the government may grant tax exemption for any 'Approved foreign loan' if the loan is utilized for the purchase of productive equipment, the credit facilities are obtained through financial agreement with the foreign lending company; and the amount of the loan is at least B$200,000. |
N.A |
N.A |
N.A |
There is a 15% withholding tax for interest paid to non-resident lender. However, MIC may grant tax exemption on case-by-case basis. |
N.A |
There is a 15% withholding tax for interest paid to non-resident lenders. However, the government may grant tax exemption for any 'Approved foreign loan' if the loan is utilised for the purchase of productive equipment. |
N.A |
N.A |
