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Main Page FAQs By Division Tax Division Import/Export Duty Exemption
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1.Can a company apply for an export duties exemption on manufacturing waste (scrap)

In general, export duty exemption is not given to the export of scrap, however for manufacturing companies that exported copper scrap under the 7404.00 000 tariff code may be considered subject to the following conditions: -

(i) Possess a valid AP from MITI and endorsed by the Customs Department in the K2 Form for a valid period;

(ii) Copper scraps produced are from imported raw materials and must be returned back to companies that require these residues to be returned to the original supplier or any party authorired by the original supplier; and

(iii) Copper scraps produced that cannot or are not suitable to redeem usage by local companies.

2.Can a company obtain import duty/sales tax exemption for sub-contract work overseas?
 Application for an exemption of duty/tax for sub-contract work done overseas can be submitted directly to SMIDEC with a copy sent to the Tax Analysis Division, Ministry of Finance. Applications will be considered by the Ministry after an assessment from SMIDEC.
Can a company apply for  import duty and sales tax exemption on machinery/equipment not used directly in the production activities of the company?

 Duty/tax exemption is given only for raw materials/components and machinery/equipment used directly in manufacturing activities of the company.

In addition, the duty/tax exemption on the cleanroom equipment is also considered on the basis that although the device is not used directly in manufacturing, but it is necessary to guarantee the manufacturing area is free from dust and electrical emissions interference. The company can communicate directly with the Customs Department for a list of cleanroom equipment exempted from import duty/sales tax.

Can a LMW/FIZ status company obtain import duty exemption on the sale of completed products to the Principal Customs Area (PCA)?

(i) Sales of consumer goods and intermediate goods that are produced in the Principal Customs Area (PCA) is subjected to an import duty at a rate equivalent to the CEPT rate;

(ii) Sales of consumer goods and intermediate goods that are produced in the PCA, but with local materials valued exceeding 51% of and that the local materials were obtained from the Malaysian owned companies that are more than 51% are subject to import duty of 5% a.v. or the equivalent excise duty rate, whichever is higher (for products subjected to excise duty). For items with local content  that do not exceed 51% but with at least 40%, relaxation may be considered based on the merits of the case;

(iii) the sale of consumer goods not produced in the PCA are subjected to an import duty of 3% a.v.; and

(iv) the sale of intermediate goods that are not produced in the PCA are given full exemption from import duty or subjected to an import duty of 3% a.v. in accordance with applicable current policies on import duty exemption on raw materials/components and machinery/equipment for the manufacturing sector in the PCA.

Applications to pay the import duty under the CEPT rate, the company must fill out the PC (3) form in MIDA. Applications will be considered by the Treasury after receiving an assessment from MIDA. Applications to pay import duty on CEPT rate must be submitted directly to the Customs Department.

Last Updated on Friday, 23 March 2012 16:48

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