Confused over tax treatment on WSP?
Confused over tax treatment on WSP?

Confused over tax treatment on WSP?

Tax Treatment for WSP received:

  • The WSP received are not taxable in the gross income, which are exempted from tax under Income Tax (Exemption) (No.22) Order 2006 [P.U.(A) 207/2006]

 Tax Treatment for Salary:

  • The salary expenditure which financed by the subsidies are not allowed for deduction under Section 33(1) of the ITA 1967

Reference

Income Tax (Exemption) (No.22) Order 2006 [P.U.(A) 207/2006

  • With effective from year of assessment 2006, the subsidies and grants received are exempt from tax

Revenue expenditure and capital expenditure

  • The revenue expenditure which financed by the subsidies and grants are not eligible for a deduction under Section 33(1) of the ITA 1967 such as staff salaries

  • The capital expenditure which financed by the subsidies and grants are not eligible to claim capital allowance under Schedule 3(1) of ITA 1967

 Public Ruling No1/2006 Agriculture Allowances

  • the subsidies or grants received from the government for the purpose of reducing the burden of capital expenditure in carrying on agricultural or plantation activities

  • So that, the grant received is not taxable; and

  • The expenses financed from the grant are not eligible for any tax deduction or any allowances under Schedule 3 to the ITA.

Sources:

Income Tax (Exemption) (No.22) Order 2006 [P.U.(A) 207/2006

Public Ruling No1/2006 Agriculture Allowances

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