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Investment Tax Incentive Package for Sabah Development Corridor (SDC)
 

GUIDELINES/ CRITERIA FOR APPLICATION FOR SDC TAX INCENTIVE

TOURISM PROJECTS

A. Hotels & Resorts
  1. Companies undertaking new investments in 4-5 star hotels and resorts within the Kinabalu Gold Coast Enclave (KGCE) are eligible to apply for:
    • Full tax exemption on statutory income for a period of 10 years; or Investment Tax Allowance of 100% on qualifying capital expenditure incurred within a period of 5 years. The allowance can be used to offset against 100% of statutory income for each year of assessment.
    • Exemption on import duty and sales tax subject to current policy; and
    • Stamp duty exemption on land acquired for development.
  2. The hotel/ resort must be registered and certified by the Ministry of Tourism Malaysia (MoTour).
  3. The hotel/ resort must obtain approval for establishment from MoTour before submission of application to SEDIA.
  4. The incentives are applicable for applications received by SEDIA from 1 January 2013 until 31 December 2020.
  5. Applications for item 1.i. and iii. should be submitted using Form SDC_KGCE-H&T. Form SDC_ID&ST should be used for item 1.ii.
  6. Applications including supporting documents for item 2. & 3. should be submitted to SEDIA.


B. Creative Cluster

  1. Companies undertaking new investments in creative art and design institutions within the KGCE are eligible to apply for:
    • Full tax exemption on statutory income for a period of 5 years; or Investment Tax Allowance of 100% on qualifying capital expenditure incurred within a period of 5 years. The allowance can be offset against 100% of statutory income for each year of assessment; and
    • Full exemption on import duty and sales tax exemption subject to current policy.
  2. Definition of art and design academy:
    • Art/ design academy is a school dedicated for studies intended to provide technical knowledge and intellectual skills in design and creative arts, taught by professional designers. The school provides facilities such as design studios for fashion design and other design related activities.
    • School of Performing Arts is an institution for arts education including dance, theatre, musical theatre, design and production (technical theatre) etc, taught by professional artists. The school features facilities such as dance studios, music labs, and dedicated space for theatre, art programmes.
  3. Companies operating the school must be incorporated in Malaysia under the Companies Act, 1965.
  4. The school must be registered and accredited by Ministry of Higher Education (MOHE).
  5. The school must obtain approval for establishment from MOHE before submission of application to SEDIA.
  6. Applications for item i. and ii. should be made by using the SDC_KGCE-CC Form and SDC_ID&ST Form, respectively.
  7. Applications including supporting documents for item 5. should be submitted to SEDIA.

PRIVATE LEARNING INSTITUTE & SKILL TRAINING CENTRES

  1. Companies undertaking new investments in private higher learning institutions as well as training centres located within the Sandakan Education Hub (SEH) are eligible to apply for:
    • Full tax exemption on statutory income for a period of 10 years; or Investment Tax Allowance of 100% on qualifying capital expenditure within a period of 5 years. The allowance can be offset against 100% of statutory income for each year of assessment; and
    • Exemption on import duty and sales tax exemption on equipments and machinery used, subject to current policy.
  2. Definition of private higher learning institution:
    Private higher learning institution means not a government university, or college, or campus, or any other autonomous institution that offers a level of academic education and professional training that leads to full academic and or professional qualifications and competence.
  3. Companies operating the school must be incorporated in Malaysia under the Companies Act, 1965.
  4. The school must be registered by Ministry of Higher Education (MOHE).
  5. The school must obtain approval for establishment from MOHE before submission of application to SEDIA.
  6. The incentives are applicable for applications received by SEDIA from 1 January 2013 until 31 December 2020.
  7. Applications for private learning institutions and skill training centres should be made by using the SDC_SEH-IPSCU Form and SDC_SEH-STC Form, respectively.
  8. Application for item ii. should be made using the SDC_ID&ST Form.
  9. Applications including supporting documents for item 5. should be submitted to SEDIA.

 
DOWNSTREAM MANUFACTURING ACTIVITIES IN SPECIFIC CLUSTER

  1. The Industrial Coordination Act, 1975 requires companies engaging in any manufacturing activity with shareholders’ funds of RM2.5million and above or employing 75 or more full-time paid employees to obtain a Manufacturing Licence.
  2. The Promotion of Investments Act, 1986 provides for companies proposing to manufacture promoted products or engage in promoted activities to apply for Pioneer Status or Investment Tax Allowance.
  3. The incentives are only applicable for companies engaged in specific qualifying activities, located in the designated SDA, as set out in the above table.
  4. The incentives are applicable for applications received by SEDIA from 1 January 2013 until 31 December 2020.
  5. Applications for tax exemption and investment tax allowance should be made using SDC_MP-SDA Form.
  6. Applications for exemption on import duty and sales tax should be made using SDC_ID&ST Form.
  7. To be eligible for the incentives, companies must commence operations by one year from the date of approval.

Applications received by 31 December 2020 are eligible for these incentives. All applications should be submitted to SEDIA.
 

 
Incentive Package for SDC
Incentive Process Flow
Required Documents
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