Malaysia gazettes tax deduction on Stock Market Listing Expenses for technology based companies

The MoF recently gazetted P.U.(A) 235/2023 (“the Rules”) on the tax deduction of up to MYR 1.5 million on expenses incurred by technology-based companies in relation to listing on the: (i) Main Market; (ii) Access, Certainty, Efficiency (“ACE”) Market; and (iii) Leading Entrepreneur Accelerator Platform (“LEAP”) Market of Bursa Malaysia Securities Berhad (“Bursa”) from YA 2023 to 2025.

The Rules shall apply to technology-based companies which:

are involved in the design, development and manufacture, production or application in any of the fields and activities as specified in the Schedule;
certified by Bursa Malaysia Securities Berhad as the principal business activity of the technology based company; and
have applied for listing on the Main Market, ACE Market and LEAP Market.

Technology-based companies that are listed on the Main Market, ACE Market or LEAP Market may claim a deduction of up to MYR 1.5 million for the basis period in a YA on the following expenditures incurred:

Payment fees to Bursa and Securities Commission Malaysia as the authorities;
Payment for the following professional fees:

Advisory fee to the principal adviser, the sponsor and the approved adviser in relation to the listing;
Fee in relation to the listing exercise, fees to the solicitor, company secretary, tax adviser, reporting accountant, auditor, valuer, independent market researcher, issuing house and share registrar; and
Payment of fees for underwriting, placement and brokerage services.

The deduction must not exceed the adjusted income of the technology-based company for that basis period in the YA. The adjusted income must be ascertained before applying for such deduction.
Any excess deduction cannot be carried forward to the subsequent YA.

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