TAX 490, DEC 2015, Q2C

2c. With respect to the Pioneer Status and Investment Tax allowance:

i. State the benefits obtained by Detrichem Sdn Bhd if the manufacturing

business is to be located in Sabah instead of Selangor.
(2 marks)

ii. State two types of industries (other than manufacturing) that are eligible to
apply for the above incentives.
(2 marks)

iii. State one example of capital expenditure which do not qualify for the
investment tax allowance.
(1 mark)

Solution 2(C)

(i) If the manufacturing business is to be relocated in Sabah instead of Selangor, the benefits
are:

Pioneer status Investment Tax Allowance

100% exemption on its statutory 100% exemption on its statutory income from
income from business business. 
ITA is available 100% on its QCE
(4 x ½ mark = 2 marks)

(ii) Two types of industries (other than manufacturing) that are eligible to apply for the pioneer
status and investment tax allowances are:

- Agriculture Any 2 x 1 mark = 2marks

- Hotel
- Tourism

(iii) On example of capital expenditure which do not qualify for the investment tax allowance:
- Building used as living accommodation for administrative staff
- Plant and machinery used by the administrative staff

Any 1x 1 mark = 1 mark