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August will see the Malaysia Digital Economy Corporation (MDEC) launch Malaysia Tech Month 2021 (MTM 2021). A month-long curation of the very best in digital and technology keynotes, workshops and discussion panels, this inaugural event will feature visionary leaders and insightful investors as they share why they chose to operate in Malaysia. This will also include a massive showcase of the country’s world-class innovations and digital platforms for the world to see.

A Showcase of Leaders and Innovators for Trade and Investment

MALAYSIA TECH MONTH 2021

November will see the Malaysia Digital Economy Corporation (MDEC) launch Malaysia Tech Month 2020 (MTM 2020). A month-long curation of the very best in digital and technology keynotes, workshops and discussion panels, this inaugural event will feature visionary leaders and insightful investors as they share why they chose to operate in Malaysia. This will also include a massive showcase of the country’s world-class innovations and digital platforms for the world to see.

MALAYSIA TECH MONTH 2020

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Daftar Sekarang

Date & Time: 22nd May (Saturday) from 2-5pm

ASDA 2021 Demo Day is open to the public via Zoom it’ll be a live session.

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<h2><strong><span style="font-size:14px">IMPORTANT ANNOUNCEMENT:</span></strong></h2>

<h2><strong><span style="font-size:14px">UPDATE ON MSC MALAYSIA STATUS TAX INCENTIVE:<br />
GUIDELINES FOR EXISTING MSC MALAYSIA STATUS COMPANIES (SERVICES)</span></strong></h2>

<p><span style="font-size:12px">Dear Esteemed Client,</span></p>

<p><span style="font-size:12px">We refer to all previous announcements issued by MDEC regarding the implementation of the international taxation standards under the Organisation for Economic Co-operation and Development (OECD), Base Erosion and Profit Shifting (BEPS) Action 5.</span></p>

<p><span style="font-size:12px">We are pleased to inform that a set of Guidelines has been approved by the Government for existing MSC Malaysia Status companies which are impacted by the aforesaid exercise.</span></p>

<p><span style="font-size:12px">Details of planned briefing sessions to be held in KL, Penang and Johor will be announced soon. We will share the information as soon as it is available.</span>​​​​​​​</p>

<p><span style="font-size:12px">Thank you.</span></p>

<p><span style="font-size:12px"><strong>Issued by Malaysia Digital Economy Corporation Sdn Bhd (MDEC)</strong></span></p>


UPDATE ON MSC MALAYSIA STATUS TAX INCENTIVE: GUIDELINES FOR EXISTING MSC MALAYSIA STATUS COMPANIES (SERVICES)

<p>We would like to bring your attention to the announcement by the Government of Malaysia on 12 June 2018 which can be accessed in here regarding Malaysia&rsquo;s participation in the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) taxation initiatives.</p>

<p>In order to address the issue of base erosion and profit shifting, the OECD and the G20 countries have introduced the BEPS Action Plan as international taxation standards. Malaysia in principal has committed to implement the aforesaid international standards. Under this commitment, Malaysia has joined the OECD Inclusive Framework on BEPS as an associate member for the global implementation of the aforesaid international standards. Pursuant thereto, the Government of Malaysia will be taking the necessary steps to streamline all relevant tax incentives of Malaysia to be consistent with the minimum standards under the BEPS Action 5.</p>

<p>Accordingly, the tax incentives granted under MSC Malaysia Bill of Guarantee No. 5 (BOG 5) will be amended to incorporate the minimum standards under the BEPS Action 5.</p>

<p>MSC Malaysia tax incentives currently exempt income deriving from the approved MSC Malaysia Qualifying Activities, which may comprise income deriving from intellectual property (IP income) and/or income deriving from non-intellectual property (non-IP income). Under the aforesaid international standards, a regime exempting IP income will have to adopt the nexus approach and a regime exempting non-IP income will have to adopt the substantial activity requirements.</p>

<p>The new legislation and guidelines for MSC Malaysia tax incentives are currently being reviewed by the Government and MDEC will be releasing further information on the new criteria/conditions in due course.</p>

<p>Moving forward, in order to adhere to the timelines imposed by the aforesaid international standards and to ease transition into the new regime:</p>

<ol>
	<li>No new approvals will be granted for applications for MSC Malaysia Status starting from 1 July 2018, including applications for extension of income tax exemption period or applications to add new MSC Malaysia Qualifying Activities.</li>
	<li>Existing MSC Malaysia Status companies with tax incentives will be given option:
	<ol>
		<li>To grandfather i.e. to continue to enjoy the income tax exemption granted for IP income and/or non-IP income under their existing MSC Malaysia Status Conditions of Grant&nbsp;<strong>until 30 June 2021</strong>; OR</li>
		<li>Subject to the new legislation and guidelines coming into force, to move into the new regime and to be subjected to the new criteria/conditions.</li>
	</ol>

	<p>However, for MSC Malaysia Status companies which have been granted approval&nbsp;<strong>on or after 17 October 2017 for non-IP income, if these companies would like to opt for grandfathering, the grandfathering period will end on 31 December 2018</strong>.</p>
	</li>
	<li>New approvals and extension of the income tax exemption period will only be considered once the new legislation and guidelines come into force, which is targeted to be by 31 December 2018.</li>
</ol>

<div>
<p>The details on the aforesaid international standards can be found at OECD, &ldquo;<a href="http://www.oecd.org/tax/countering-harmful-tax-practices-more-effectively-taking-into-account-transparency-and-substance-action-5-2015-final-report-9789264241190-en.htm"><em>Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5: 2015 Final Report</em>&nbsp;</a>&rdquo;, &ldquo;&nbsp;<a href="http://www.oecd.org/tax/beps/harmful-tax-practices-2017-progress-report-on-preferential-regimes-9789264283954-en.htm"><em>Harmful Tax Practices &ndash; 2017 Progress Report on Preferential Regimes: Inclusive Framework on BEPS: Action 5</em>&nbsp;</a>&rdquo;.</p>

<p>MDEC will be providing update on this matter from time to time. Once the new criteria/conditions have been approved by the Government, MDEC will engage the affected companies on the next steps.</p>

<h1><span style="font-size:14px"><strong>ANNOUNCEMENT ON MSC MALAYSIA BOG 5 CHANGES: Q&amp;A</strong></span></h1>

<h3><span style="font-size:14px"><strong>1. WHAT IS THIS ANNOUNCEMENT ABOUT?</strong></span></h3>

<p>This is to notify you on the upcoming changes to the MSC Malaysia Bill of Guarantee No. 5 (BOG5) arising from Malaysia&rsquo;s participation to implement the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) Action 5.</p>

<h3><strong><span style="font-size:14px">2. WHAT IS OECD BEPS?</span></strong></h3>

<p>BEPS is a project by OECD to address the worldwide problem of base erosion and profit shifting, i.e. tax avoidance strategies that exploit gaps in tax rules to artificially shift profits to low or no-tax locations. Under the Inclusive Framework of which Malaysia is an associate member, over 100 countries and jurisdictions are collaborating to implement the BEPS measures.</p>

<h3><span style="font-size:14px"><strong>3. WHAT ARE THE CHANGES?</strong></span></h3>

<p>The existing eligibility criteria and conditions for the financial incentives under BOG 5 will be amended to be consistent with the minimum standards of OECD BEPS Action 5. At the same time, the BOG5 will also be strategically revamped in order to bring higher value investment into Malaysia&rsquo;s digital economy.</p>

<h3><span style="font-size:14px"><strong>4.&nbsp;HOW DOES IT IMPACT MY ORGANIZATION?</strong></span></h3>

<p>If your company is an applicant for MSC Malaysia Status, extension of income tax exemption period or application to add new MSC Malaysia Qualifying Activities, kindly note that no new approvals will be granted starting from 1 July 2018.</p>

<p>If your company is currently enjoying income tax exemption under MSC Malaysia Status, such tax exemption will be impacted due to the changes in the conditions and the requirement to close off the existing BOG5 under the OECD BEPS Action 5, as stated in the announcement. However, your company will have an option of &ldquo;grandfathering&rdquo;.</p>

<h3><strong><span style="font-size:14px">5. WHAT DOES &ldquo;GRANDFATHERING&rdquo; MEAN?</span></strong></h3>

<p>Grandfathering in this context means an MSC Malaysia Status company which is currently enjoying income tax exemption can continue to enjoy such income tax exemption under the existing BOG 5, by complying with its existing MSC Malaysia Status Conditions of Grant (COG) and the existing legislations under which the tax exemption is granted, until certain end dates as specified in the announcement. The end dates are in accordance with the grandfathering period allowed under the OECD BEPS Action 5. Upon the expiry of such end dates, the tax exemption will have to cease.</p>

<h3><span style="font-size:14px"><strong>6. WHAT OTHER OPTIONS DO I HAVE?</strong></span></h3>

<p>Subject to the new legislation and guidelines for the new BOG5 coming into force, your company may be able to move into the new regime and to be subjected to the new criteria/conditions and continue to enjoy the tax exemption for the remaining years.</p>

<h3><span style="font-size:14px"><strong>7. WHAT ARE THE NEW CRITERIA/CONDITIONS AND WHEN WILL THE SAME BE ANNOUNCED?</strong></span></h3>

<p>The new criteria/conditions will adopt the international standards as specified under the OECD BEPS Action 5. The details can be found at OECD, &ldquo;<a href="http://www.oecd.org/tax/countering-harmful-tax-practices-more-effectively-taking-into-account-transparency-and-substance-action-5-2015-final-report-9789264241190-en.htm"><em>Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5: 2015 Final Report</em>&nbsp;</a>&rdquo;, and &ldquo;<a href="http://www.oecd.org/tax/beps/harmful-tax-practices-2017-progress-report-on-preferential-regimes-9789264283954-en.htm"><em>Harmful Tax Practices &ndash; 2017 Progress Report on Preferential Regimes: Inclusive Framework on BEPS: Action 5</em>&nbsp;</a>&rdquo;.</p>

<p>The guidelines on the new criteria/conditions is currently under review by the Government of Malaysia and MDEC will be releasing information on the new criteria/conditions once it receives necessary approvals from the Government of Malaysia.</p>

<p>You may also refer to the announcement made by the Ministry of Finance in this regard&nbsp;<a href="http://www.treasury.gov.my/index.php/en/tax/item/3959-malaysia-s-commitment-in-international-tax-standard.html">here</a>.</p>

<h3><strong><span style="font-size:14px">8. WHILE WAITING FOR THE NEW CRITERIA/CONDITIONS, DO I NEED TO COMPLY WITH EXISTING MSC MALAYSIA STATUS COG?</span></strong></h3>

<p>Yes. The tax exemption that your company enjoys currently until the expiry of the grandfathering period is subject to the compliance by your company of the existing COG.</p>

<h3><span style="font-size:14px"><strong>9. IF I DO NOT WISH TO GRANDFATHER BUT INSTEAD WISH TO CONTINUE THE INCOME TAX EXEMPTION UNDER THE NEW CRITERIA/CONDITIONS, DO I NEED TO RE-APPLY FOR MSC MALAYSIA STATUS OR MY APPLICATION WILL BE AUTOMATICALLY CONVERTED ONCE THE NEW GUIDELINES AND LEGISLATION COME INTO FORCE?</strong></span></h3>

<p>At this juncture, since the new criteria/conditions and the new legislation are still under review, we are unable to advise on the implementation details on the migration of existing companies. We hope to release more information about this soon.</p>

<h3><strong><span style="font-size:14px">10.&nbsp;WHAT HAPPENS TO MY APPLICATION WHICH IS COMPLETED AND SUBMITTED TO MDEC BUT HAS YET TO BE PRESENTED TO AND APPROVED BY THE APPROVAL COMMITTEE?</span></strong></h3>

<p>You may choose to withdraw your company&rsquo;s application and wait for the new criteria/conditions to be announced.</p>

<h3><strong>11.&nbsp;CAN MY COMPANY GET A REFUND OF THE APPLICATION FEE?</strong></h3>

<p>Yes.</p>

<h3><strong>12.&nbsp;WHAT HAPPENS TO MY APPLICATION IF I DECIDED NOT TO WITHDRAW MY APPLICATION?&nbsp;</strong></h3>

<p>Your application will not be processed now and will be re-evaluated later based on the new criteria/conditions.</p>

<h3><strong>13.&nbsp;WOULD I BE ABLE TO RETRIEVE OR AMEND THE EXISTING APPLICATION WHILE WAITING FOR THE NEW CRITERIA/CONDITIONS TO BE ANNOUNCED?</strong></h3>

<p>You will not be able to access or amend your existing application. The submitted value proposition plan will remain as is in our record.</p>

<h3><strong>14.&nbsp;IF MY COMPANY HAS BEEN GRANTED MSC MALAYSIA STATUS AND HAS YET TO ACTIVATE THE INCOME TAX EXEMPTION, CAN I PROCEED TO ACTIVATE THE INCOME TAX EXEMPTION NOW?</strong></h3>

<p>Yes, you may proceed to activate the tax exemption now (subject to the compliance by your company of the existing COG and in accordance with the provisions of the existing legislation under which your tax exemption is granted). If you choose to activate the tax exemption now, the tax exemption can only continue until the relevant end date of the grandfathering period. After such period, the tax exemption will be subjected to the new criteria/conditions and the new legislation. You may also choose to not activate and surrender the tax exemption now.</p>

<h3><strong>15.&nbsp;IF MY COMPANY IS APPLYING FOR EXTENSION OF INCOME TAX EXEMPTION, DOES MY COMPANY NEED TO PAY TAX DURING THIS WAITING PERIOD?</strong></h3>

<p>Yes, since no extension of income tax exemption period has been granted you need to pay tax during this period.</p>

<h3><strong>16.&nbsp;CAN MY COMPANY APPLY FOR FOREIGN KNOWLEDGE WORKER (FKW) PASSES FOR NEW ACTIVITIES WHICH HAVE YET TO BE APPROVED AS MSC MALAYSIA QUALIFYING ACTIVITIES?</strong></h3>

<p>No, the new activities have to be approved as MSC Malaysia Qualifying Activities first before the benefits under MSC Malaysia BOG2 relating to FKW can be provided to the company.</p>

<h3><strong>17.&nbsp;WHAT IS IP INCOME AND NON-IP INCOME?</strong></h3>

<p>Generally, IP income is income deriving from exploitation of an intellectual property (IP), of which your company is the owner or the licensee. Examples of IP income are royalty or license fee received as consideration for the exploitation of an IP. Non-IP income is income which is not derived from an IP.</p>

<h3><strong>18.&nbsp;WHAT SHOULD I DO NOW?</strong></h3>

<p>You may wish to be familiarized with or seek professional advice on the minimum standards of the OECD BEPS Action 5, since the new criteria/conditions of the new BOG5 will be designed based on such standards.</p>
</div>


IMPORTANT UPDATE AND CHANGES ON MSC MALAYSIA BOG 5

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<h4>MDEC Celebrates Silver Jubilee &ndash; 25 Years of Driving Digital Transformation of Malaysia</h4>


MDEC Celebrates Silver Jubilee – 25 Years of Driving Digital Transformation of Malaysia

<h4>Week One of Malaysia Tech Month 2021 Promises Deep, Engaging Insights into Malaysia as the Heart of Digital Investments</h4>


Week One of Malaysia Tech Month 2021 Promises Deep, Engaging Insights into Malaysia as the Heart of Digital Investments

<h4>(BM) Minggu Pertama Malaysia Tech Month 2021 janjikan perbincangan mendalam, sekaligus menjadikan Malaysia sebagai Nadi Pelaburan Digital</h4>


(BM) Minggu Pertama Malaysia Tech Month 2021 janjikan perbincangan mendalam, sekaligus menjadikan Malaysia sebagai Nadi Pelaburan Digital

<h4>MDEC Launches Malaysia Tech Month 2021 to Assert Malaysia as the Heart of Digital ASEAN</h4>


MDEC Launches Malaysia Tech Month 2021 to Assert Malaysia as the Heart of Digital ASEAN

<h4>(BM) MDEC Lancar Malaysia Tech Month 2021, kukuhkan Malaysia sebagai Nadi Digital ASEAN</h4>


(BM) MDEC Lancar Malaysia Tech Month 2021, kukuhkan Malaysia sebagai Nadi Digital ASEAN

<h4>MDEC brings back &lsquo;Let&rsquo;s Learn Digital&rsquo;, kicking off with Facebook, Google and LinkedIn partnership</h4>


MDEC brings back ‘Let’s Learn Digital’, kicking off with Facebook, Google and LinkedIn partnership

<h4>(BM) MDEC lancar semula program &lsquo;Let&rsquo;s Learn Digital&rsquo; dengan pengumuman kerjasama di antara Facebook, Google dan LinkedIn</h4>


(BM) MDEC lancar semula program ‘Let’s Learn Digital’ dengan pengumuman kerjasama di antara Facebook, Google dan LinkedIn

<h4>Malaysia Tech Month 2021 Set to Establish Malaysia as the Heart of Digital ASEAN</h4>


Malaysia Tech Month 2021 Set to Establish Malaysia as the Heart of Digital ASEAN

<h4>(BM) Malaysia Tech Month 2021 bakal jadikan Malaysia Nadi Digital ASEAN</h4>


(BM) Malaysia Tech Month 2021 bakal jadikan Malaysia Nadi Digital ASEAN

<h4>(BM) MDEC memperkasakan perniagaan tempatan berteraskan Data menerusi Program DDE</h4>


(BM) MDEC memperkasakan perniagaan tempatan berteraskan Data menerusi Program DDE

<h4>MDEC Moves Forward With &lsquo;Digital Investments Future5&rsquo; Strategy</h4>


MDEC Moves Forward With ‘Digital Investments Future5’ Strategy

<h4>(BM) MDEC Melangkah ke Hadapan Dengan Lancarkan Strategi Pelaburan Future5</h4>


(BM) MDEC Melangkah ke Hadapan Dengan Lancarkan Strategi Pelaburan Future5

<h4>MDEC Announces Appointment of Mohamad Zakkuan Talib, Head of MACC Negeri Sembilan, as Director, Integrity &amp; Governance (Certified Integrity Officer)</h4>


MDEC Announces Appointment of Mohamad Zakkuan Talib, Head of MACC Negeri Sembilan, as Director, Integrity & Governance (Certified Integrity Officer)

<h4>MDEC&rsquo;s Creative Content Streaming Programme 2021 equips Malaysian content creators with the skills to thrive in the digital content frontier</h4>


MDEC’s Creative Content Streaming Programme 2021 equips Malaysian content creators with the skills to thrive in the digital content frontier

<h4>(BM) Program Penstriman Kandungan Kreatif MDEC 2021 mempersiapkan pencipta kandungan Malaysia dengan kemahiran yang diperlukan untuk berjaya dalam industri kandungan digital</h4>


(BM) Program Penstriman Kandungan Kreatif MDEC 2021 mempersiapkan pencipta kandungan Malaysia dengan kemahiran yang diperlukan untuk berjaya dalam industri kandungan digital

<h4>MDEC supports employees with COVID-19 vaccination programme</h4>


MDEC supports employees with COVID-19 vaccination programme

<h4>(BM) MDEC sokong kakitangan sertai program vaksin COVID-19</h4>


(BM) MDEC sokong kakitangan sertai program vaksin COVID-19

<h4>MDEC Welcomes National 4IR Policy; Fully Focused on Digitalisation Efforts</h4>


MDEC Welcomes National 4IR Policy; Fully Focused on Digitalisation Efforts

<h4>(BM) MDEC Mengalu-alukan Pelancaran Dasar 4IR, fokus sepenuhkan kepada usaha pendigitalan</h4>
