Certification of Islamic Funds  in Respect of 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, Income Tax Order (Exemption) Order 2014 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)?
The tax incentives available for the industry are income tax exemption in respect of its statutory income derived from a business of providing fund management services to funds, business trusts or real estate investment trusts (REITS) in Malaysia which is managed in accordance with Shariah principles.
2. Who can apply for the tax incentives?
A fund management company which:

  • is incorporated under the Companies Act 1965 [Act 125];
  • is resident in Malaysia;
  • holds a Capital Markets Services License under the Capital Markets and Services Act 2007 [Act 671] to carry on the business of providing fund management services; and
  •  manages the fund in accordance with Shariah principles and duly certified by the SC.
3. What is the procedure to apply for the certification?
All applications must be made to the SC by completing the application form entitled ‘Application Form for Certification of Islamic Funds in respect of Tax Incentive for the Islamic Fund Management Industry’, which can be downloaded here (pdf).The application form must be submitted to the SC together with the following documents:

  • A written declaration to SC by the applicant that the fund management business is carried out in accordance with Shariah principles similar to the one required under section 9.01 of the Islamic Fund Management Guidelines; and
  • A written confirmation from the appointed Shariah Adviser that the fund has been managed according to Shariah principles.

Please note that documents (i) and (ii) are not applicable to fund managers of unit trust funds/close-end funds, exchange-traded funds, wholesale funds, REIT managers of Islamic REITS and trustee-managers of Islamic business trusts.

4. When can the application for certification be made?
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.
5. How long will it take, from the point of application, for SC to grant the certification?
If the information submitted is complete, the SC will issue the letter to the applicant within 14 working days from the date of submission.
6. Who do I submit my application to?
All application forms and documents must be submitted to the SC as follows:

Executive Director
Islamic Capital Market Business Group
Securities Commission 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: