𝐈𝐟 𝐲𝐨𝐮 𝐚𝐫𝐞 𝐥𝐨𝐠𝐢𝐬𝐭𝐢𝐜 𝐬𝐞𝐫𝐯𝐢𝐜𝐞𝐬 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐫, 𝐲𝐨𝐮 𝐜𝐚𝐧 𝐠𝐞𝐭 𝟓 𝐲𝐞𝐚𝐫𝐬 𝐭𝐚𝐱 𝐬𝐚𝐯𝐢𝐧𝐠 from MIDA

What is the Government Support for logistics services companies?

The Malaysian Investment Development Authority (MIDA) supports the growth of companies undertaking integrated logistics services (ILS) by offering tax incentives for 5 years as below：

1. Pioneer status (PS)

- Tax exemption of 70% of statutory income.

2. Investment tax allowance (ITA)

- 60% of qualifying capital expenditure*

*Qualifying capital expenditure means capital expenditure incurred on factory or any plant and machinery used in Malaysia in connection with and for the purposes of ILS.

Key takeaways:

You will understand: -

1. What is the integrated logistics services?

2. What are the qualifying criteria for ILS incentive?

3. How to apply?

Integrated logistics services (ILS)

ILS refers to a company that performs a variety of end-to-end logistics-related service activities like air, ocean, road and rail transportation, warehousing and other value-added services that make up a total logistics services package.

Main activities involved:

· Warehousing

· Transportation

· Freight Forwarding

· Distribution

· Other value added services (Example: break bulking, palletising, labelling, etc)

Qualifying criteria

1. Locally incorporated

i. Incorporated under Companies Act 2016 and resident in Malaysia; and

ii. 60% equity held by Malaysian.

2. Eligible services

Must undertakes 3 principal activities:

i. Freight forwarding

ii. Warehousing

iii. Transportation

and at least one of the following activities:

i. Distribution

ii. Supply chain management

iii. Other related and value-added services/activities

- Palletizing, product, assembly/installation, breaking bulk, consolidation, packaging/re-packaging, procurement, quality control, labelling/re-labelling, testing etc.

3. Minimum Infrastructure to be owned by applicant company

i. Commercial vehicles: 20 units

- Motor vehicle for the purpose of carrying goods.

ii. Warehousing facilities: 5,000 sq metres

- To provide various facilities and services covering small dock-off depots to large scale warehouses and distribution centers.

Procedure for application

1. Register an account under https://investmalaysia.mida.gov.my.

2. Submit the application online for MIDA approval.

3. Proceed to apply for tax incentive certificate after get approval from MIDA.

Reference

Guidebook of Integrated Logistics Services
https://www.mida.gov.my/wp-content/uploads/2020/07/20191220163458_BOOKLET-4-LOGISTICS-SERVICES.pdf
Guidelines for application for tax incentives for Integrated Logistics Services (ILS) (31.03.2021)
https://www.mida.gov.my/wp-content/uploads/2021/04/GD_ILS_31032021.pdf

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taxKtp KtpMay 6, 2021tax ince, mida, ILS, integrated logistic services, mida logistic