On 4 October 2023, the Inland Revenue Board of Malaysia (IRBM) released Public Ruling No. 2/2023, which outlines the tax incentives offered to an investor who has invested in a BioNexus status company in Malaysia.

The tax incentive granted to an investor is a deduction from its business source in ascertaining the adjusted business income. The deduction allowed in the basis period for a year of assessment (YA) is an amount equal to the actual value of the investment made by the investor in the basis period in a company approved by the Minister of Finance as a BSC.

Public Ruling No. 2/2023 replaces and updates Public Ruling No.10/2018 dated 4 December 2018.  The revised ruling introduces several changes, including:

• The relevant subsidiary legislation has been updated to incorporate the Income Tax (Deduction for Investment in BioNexus Status Companies) (Amendment) Rules 2022, effective 1 January 2021. 
• Paragraph 5 has been updated regarding the criteria for investors. According to the new ruling, applications to invest in a BSC must be submitted to the Minister of Finance for approval between 1 January 2021 and 31 December 2022. This contrasts the previous requirement, which stated that applications must be submitted on or after 1 January 2016.
• Paragraph 6 of the tax incentive has been updated to specify that the investment must be made between 1 January 2021 and 31 December 2022. Previously, the investment was required to be made between 1 January 2016 and 31 December 2020.

In order to qualify for the tax incentive, all prospective investors are required to submit an application to the Malaysian Bioeconomy Development Corporation Sdn. Bhd. (Bioeconomy Corporation) to ensure that the eligibility criteria are met and certified as approved investors.