Tax Exemption for Intellectual Property derived income
In a long awaited decision to incentivise the creation of intellectual property, the Malaysian government through it's 2020 Budget has proposed tax exemption for ten years for companies that have put in effort to creating patents. This incentive will also include companies that have spent time in creating their own copy right software. As such, Patentagentip will endevour to help companies create their own patents such that they will be able to reduce their cost of production by way of a ten year tax exemption. Not only that, through budget 2020, the Finance Ministry has also allocated RM550 million for smart automation matching grants of up to RM 2 million per company for 1,000 manufacturing entities as well as 1,000 services companies to automate their business processes (by way of AI). This is in support of the country's Industry 4WRD readiness assessment of SMEs initiative for embracing Industry 4.0 elements.
According to MITI, the smart automation matching grants together with the expansion of Automation Capital Allowance (ACA) to the services sector for the first RM 2 million until 2023 is in line with the important role played by services sector in the development of the country's economy. The extension of ACA to 2023 will help SMEs to embrace Industry 4.0 elements. The tax exemtion of intellectual property as proposed in the budget 2020 will in a way encourage local and foreign companies to increase their investments in innovation which is also consistent with the minimum standards set under the OECD's BASE EROSION PROFIT SHIFTING (BEPS) ACTION 5 of which Malaysia is a signed partner. So for those who are interested in creating their own patents and copyrighted software, please contact us as soon as possible so that you will not miss that chance to enjoy tax exemption. For those who might not have a viable idea yet, let us work towards initiating a good comercial idea that is patentable in Malaysia. Although it is easier said than done, we believe we have the capabality to create fresh new patents in synegery with the technology that you own. We are proud to say that we are one of the handful of companies in the world that can do that and certainly the only one in ASIA with that capability.