s 9
The principal Act is amended by inserting, after Now sedioe. section 6uc, the following sections: "Venture 60D. (1) Where a venture capital company capital receives an amount in respect of gains from companies. the disposal of shares in a venture company in the basis period for a year of assessment such amount shall be exempt from tax for that year of assessment: Provided that where the disposal of shares in a venture company takes place two years after the date on which the shares in the venture company are listed for quotation in the official list of a stock exchange in Malaysia, the gains from such disposal shall not be exempt from tax. (2) Paragraphs 5 and 6 of Schedule 7A shall apply mutatis mutandis to the amount exempt under subsection (1). (3) Where a venture capital company incurs a loss in respect of a disposal of shares in a venture company in the basis period for a year of assessment, there shall not be made any deduction under section 43 (2) or 44 (2) in respect of such loss in computing the aggregate income or total income of the venture capital company, as the case may be. A X B 4C' where A is the total of the permitted expenses incurred for that basis period; B is the gross income consisting of dividend, interest and rent chargeable to tax for that basis period; and C is the aggregate of the gross income consisting of dividend (whether exempt or not), interest and rent, and gains made from the disposal of shares in a venture company (whether chargeable to tax or not) for that basis period: Provided that where, by reason of an absence or insufficiency of aggregate income for that year of assessment, effect cannot be given or cannot be given in full to any deduction falling to be made to the •venture capital company under this section for that year, that deduction which has not been so nade shall not be made to the company fo ıny subsequent vear of assessment (5) In this section— "permitted expenses" means expenses incurred by the venture capital company in respect ot- (a) directors' fees; (b) wages, salary, allowances; (c) management and advisory fees paid to fund managers; (d) secretarial, audit and accounting fees, telephone charges, printing and stationery costs and postage; an (e) rent and other expenses incidental to the maintenance of an office, which are not deductible under section 33 (1); "venture capital company" means a company, incorporated in Malaysia, which- (a) is resident in Malaysia for the basis year for a year of assessment; (b) holds shares exclusively in a venture Listed for quheationes ithe orficares tot a stock exchange in Malaysia at the time of acquisition of such shares by that venture capital company; and (c) is approved by the Minister for the purposes of this section; "venture company" means a company incorporated in Malaysia which- (a) is resident in Malaysia for the basis year for a year of assessment; and (b) is involved in any high-risk venture o1 new technology in relation to a product or activity which the Minister is satisfied would promote or enhance the economic or technological development of Malaysia. Approved 60E. (1) Where an approved operational hparational headquarters company carries on a business in quarters Malaysia of providing qualifying services, and company. a business or businesses in Malaysia other than that of providing qualifying services, the business of providing such qualifying services shall be treated as a separate and distinct business and source of that company. (2) Thee harsiabie ofo the in relition to shall binhe statuto yoncome arof asatsuent 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 qualitying 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 the source consisting of the provision of aualifving 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 Paltsd con pang detse Manyre sitl 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 inminorate fore o ysis oe crotter the (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— nyipreaed o porational headduarters com- (a) th heldire issued share capital of which (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 Act 125. (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 () he perpoes or tl ecete finiser for 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 (() gencirastration; management and (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; [Cap. II, S. 91 (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 (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 neans a company- (a) the operations of which are or can be controlled, either directly or indirectly, by the approved operational head- (b) which controls or can control, either (c) the operations of which are or can be controlled, either directly or indirectly, Ne opontng oralir aproed operational headquarters company: Provided that a company shall be deemed to be a related company in relation to an approved operational headduarters company (1) at least twenty per cent of its issuec hare capita is beneticially owned ither directly or indirectly, by th company operational headquatters [Cap. II, S. 9-10] (ii) at least twenty per cent of the issued operational headquarters company is beneficially owned, either directly or by the first-mentioned Amendment 10. Section 61 of the principal Act is amendedsection 61. (a) in subsection (1), by substituting for the semicolon at the end of paragraph (b) a colon; (b) in subsection (1), by inserting, below paragraph (b), the following proviso: "Provided that in the case of a unit trust, gains arising from the realisation of investments shall not be treated as income of the trust body of the trust;"; (c) by inserting, after subsection (1), the following subsection: "(1A) Notwithstanding subsection (1) (c) and (d), a unit holder of a unit trust shall be assessed and charged to tax in respect of income equivalent to an amount ascertained by reference to his share of the total income of the unit trust tor a year ot assessment, distributed to him by the unit trust in the basis year for that year of assessment: Provided that the unit holder shall not be assessed and charged to tax in respect of any amount distributed by the unit trust out of exempt income or the gains reterred to in the proviso to section 61 (1) (b).". [Cap. II, S. 11]