On 7 November 2023, the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Bill (“Bill“) was passed in Parliament. The Bill seeks to amend the Economic Expansion Incentives (Relief from Income Tax) Act 1967 (“Act“), with the most salient amendment being the replacement of the existing agreement-based Approved Royalty Incentive (“ARI“) scheme with a new activity-based ARI scheme.
Other amendments include:
- extending the period during which approvals may be given in respect of certain incentive schemes under the Act. Schemes applicable to (i) pioneer service companies; (ii) pioneer enterprises; (iii) development and expansion companies; (iv) foreign loans; and (v) investment allowances for certain types of projects have been extended by five years from 31 December 2023 to 31 December 2028;
- enhancing the powers of the Minister for Finance and the Minister for Trade and Industry in their administration of various incentive schemes under the Act; and
- making other miscellaneous and consequential amendments.
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