The Inland Revenue Board of Malaysia has issued Public Ruling No. 2/2016 (PR 2/2016) on 9 May 2016 regarding tax incentives in relation to the venture capital industry in Malaysia.
A venture capital company (VCC) that invests in a venture company is eligible for a full income tax exemption on all sources except for interest arising from savings or fixed deposits and profits from syariah-based deposits (subject to conditions). On the other hand, a resident company (including a VCC) or individual is eligible for a deduction on investment in a venture company. The tax exemption and deduction are mutually exclusive; therefore, a company that has applied for one incentive is not entitled to apply for the other.
