Annual Certification for Tax Incentive for the Islamic Fund Management Industry
Frequently-Asked Questions (FAQs)
(Applicants must read these FAQs in conjunction with the Guidelines on Islamic Fund Management, guidelines for the various collective investment schemes issued by the SC, Income Tax (Exemption) (No.15) Order 2007, Income Tax (Exemption) (No.6) Order 2008 and any other relevant guidelines released by the SC)
| 1. |
What are the tax incentives available for the industry that require certification from the Securities Commission Malaysia (SC)? |
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The tax incentives available for the industry are as follows: |
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(i) |
Tax exemption from payment of income tax- |
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- in respect of the statutory income derived from a business of providing Islamic fund management services to foreign investors in Malaysia. "Foreign investors" is defined under the Income Tax (Exemption) (No.15) Order 2007 as:
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individuals who are not resident in Malaysia or not citizen of Malaysia; |
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b) |
companies where the entire issued share capital is beneficially owned, directly or indirectly by persons who are not resident in Malaysia and not citizen of Malaysia; and |
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c) |
trust funds where the entire interest in the fund is beneficially held, directly or indirectly by foreign investors, where- |
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the fund is created in Malaysia or outside Malaysia; and |
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the trustees of the fund are not resident in Malaysia and not citizens of Malaysia. |
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- commencing from the year of assessment 2007 until 2016.
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ii) |
Tax exemption from payment of income tax- |
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- in respect of statutory income derived from a business of providing Islamic fund management services to local investors in Malaysia. "Local investors" is defined under the Income Tax (Exemption) (No.6) Order 2008 as:
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individuals who are citizen of Malaysia and resident of Malaysia; |
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companies where the entire issued share capital is beneficially owned, directly or indirectly by any person who are citizen of Malaysia and resident of Malaysia; and |
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c) |
trust funds where the entire interest in the fund is beneficially held, directly or indirectly by any person who are citizen of Malaysia and resident in Malaysia and where- |
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the fund is created in Malaysia; and |
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the trustees of the fund are citizen of Malaysia and resident in Malaysia; |
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- commencing from the year of assessment 2008 until 2016.
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| 2. |
Who can apply for the tax incentives? |
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A fund management company: |
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(i) |
incorporated under the Companies Act 1965 and licensed by the SC to carry out the regulated activity of fund management under the Capital Markets and Services Act 2007 (CMSA); and |
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(ii) |
that manages the fund in accordance with Shariah principles and duly certified by the SC. |
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| 3. |
What is the procedure to apply for the certification? |
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All applications must be made to the SC by completing the application form entitled 'Application Form for Certification of Tax Incentive for Islamic Fund Management Industry', which can be downloaded here (pdf)
The application form submitted to the SC must be accompanied with the following documents: |
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(i) |
A written declaration to SC by the applicant that the fund management business is carried out in accordance with Shariah priciples similar to the one required under section 9.01 of the Islamic Fund Management Guidelines; and |
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(ii) |
A written confirmation from the appointed Shariah Adviser that the fund has been managed according to Shariah principles. |
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Please note that documents (i) and (ii) are not applicable to fund managers of unit trust funds/ close-end funds, exchange-traded funds and wholesale funds. |
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| 4. |
When can the application for certification be made? |
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Applicant can submit the application for certification at anytime before submitting the income tax return to the Inland Revenue Board.
The applicant must attach the SC's tax certification letter to its income tax return to the Inland Revenue Board to claim the tax incentives. |
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| 5. |
How long will it take, from the point of application, for SC to grant the certification? |
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If the information submitted is complete, the SC will inform the applicant within 14 working days from the date of submission. |
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| 6. |
Who do I submit my application to? |
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All application forms and documents must be submitted to the SC at the following address:
Head
Islamic Capital Market Department
Securities Comission Malaysia
No. 3 Persiaran Bukit Kiara
Bukit Kiara
50490 Kuala Lumpur
Tel: (603) 6204 8000
Fax: (603) 6201 5082 |
Please note that this certification is not a certification on the fees earned by the fund management company but is a certification to ensure Shariah compliance of the Islamic fund.
Should there be any inquiries, please contact Pn Dian Dannira Skymmar (tel: 03-20910739; or e-mail: diand@seccom.com.my)
