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How To Apply for Corporate Tax Deduction

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What you & your sponsors need to know:

Under subsection 34(6)(k) Income Tax Act 1967, companies providing sponsorship of domestic and foreign art, culture and heritage activities held locally and approved by the Ministry of Tourism and Culture Malaysia (MOTAC) are eligible for tax deductions.

From the year of assessment 2017, tax deduction to companies sponsoring artistic, cultural and heritage activities approved by MOTAC increased from RM500,000 to RM700,000 per year while deductions for sponsorship of foreign artistic, cultural and heritage activities increased from RM200,000 To RM300,000 per year. This increase is based on the announcement of Budget 2017 by YAB Dato’ Sri Mohd Najib Tun Abdul Razak Prime Minister of Malaysia on 21 October 2016.

Let’s say you’ve got a great show in store and a list of potential sponsors/corporate funders to contact, how do you make sponsoring your show “tax deductible” to appeal to them?

Step 1 – Check if your type of show/activity/programme is eligible and whether the sponsorship you are getting(or trying to get) fits the criteria accounted for tax deductions.

Step 2 – Submit an application to the Ministry of Tourism and Culture Malaysia (MOTAC) for their Letter of Support at least 30 days before your event, with this checklist:

  • Form DK/1-SSP
  • Your event/show Proposal paper
  • Supporting documents (photos, letters, etc)

Send your complete applications to :
Ketua Setiausaha Kementerian Pelancongan dan Kebudayaan Malaysia
Bahagian Dasar Kebudayaan, Aras 4, Menara 1,
No.2, Jalan P5/6, Presint 5, 62200 Putrajaya
(Attn To: Puan Haniah binti Hassan)

Once you receive the *Letter of Support from MOTAC, this would prove to the potential sponsors that your show is eligible to apply for the Authorization Letter for Tax Deduction Approval.

Step 3 – After your show is done, you need to apply for the Authorization Letter for Tax Deduction Approval from MOTAC. Make sure you submit this not more than 90 days after the date of your show, with this checklist:

  • Form DK/2-SPC
  • A copy of your Sponsorship Agreement stating what kind of sponsorship your show is getting and the amount
  • All receipts relevant to your event (equipment rental, props purchase receipts, payment vouchers for cash donations, etc)
  • A copy of the Letter of Support (from Step 1)
  • Programme book / Info Sheet
  • Supporting documents (flyers, photos, audience testimonials, etc)

Send your complete applications to :
Ketua Setiausaha Kementerian Pelancongan dan Kebudayaan Malaysia
Bahagian Dasar Kebudayaan, Aras 4, Menara 1,
No.2, Jalan P5/6, Presint 5, 62200 Putrajaya
(Attn To: Puan Haniah binti Hassan)

If your application is approved, MOTAC will send the Authorization Letter for Tax Deduction Approval directly to your sponsors (since you will have to had included their details in the form).

Step 4 – Send a thank you note to your sponsors with a reminder to submit the Authorization Letter for Tax Deduction Approval (which MOTAC will send directly to them) together when filing for their taxes.

Important notes
:

  • Forms (DK/1-SSP & DK/2-SPC) must be typed.
  • Forms (DK/1-SSP & DK/2-SPC) is free of charge.
  • Make sure your applications are complete to avoid getting them rejected.
  • *Please note that receiving the Letter of Support does not mean that your event sponsorship is tax deductible, you will still need to apply for the Authorization Letter for Tax Deduction Approval.
  • Once everything has been approved, MOTAC will send a copy of your Letter of Support and Authorization Letter for Tax Deduction Approval to the Inland Revenue Board of Malaysia (LHDN) so you don’t need to.

Both forms (DK/1-SSP & DK/2-SPC) will be available for download at MOTAC’s online portal in the near future.

For now, to request for the forms (and even get some free consultation and guidance on your applications) you may contact:

En. Mohd Yusri Firdaus Yaakub (Bahagian Dasar Kebudayaan)
T: 03 88917593
E: yusrifirdaus@motac.gov.my

Download the full information sheet from MOTAC (written in Bahasa Malaysia)  here.
For the English version, please click here.

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