(1) Where an approved operational headquarters company carries on a business in Malaysia of providing qualifying services, and a business or businesses in Malaysia other than that of providing qualifying services, the business of providing such qualifying services shall be treated as a separate and distinct business and source of that company.
(2) The chargeable income in relation to the source consisting of the provision of qualifying services for a year of assessment shall be the statutory income from that source reduced by any deduction falling to be made pursuant to subsection 43(2) relating to that source.
(3) The chargeable income in relation to the source or sources other than the source consisting of the provision of qualifying services for a year of assessment shall be the statutory income from that source or the aggregate of the statutory income from each of those sources, as the case may be, reduced by any deductions falling to be made pursuant to subsections 43 (2) and 44 (l):
Provided that in so making the deductions under subsections 43 (2) and 44 (1), no regard shall be had to the adjusted loss, if any, from the source consisting of the provision of qualifying services.
(4) Where it appears to the Director General that the chargeable income of an approved operational headquarters company in relation to a source consisting of the provision of qualifying services ought not to have been charged to tax at the rate specified under Part VII of Schedule 1 by reason of the withdrawal of the approval of the operational headquarters company, he may, at any time within six years after the expiration of the year of assessment for which that rate was applied, make such additional assessments upon that company as appear to him to be necessary in order to counteract any benefit obtained under Part VII of Schedule 1.
[Am. Act 578:s.14]
(4A) The chargeable income of an approved operational headquarters company, resident in Malaysia for the basis year for a year of assessment, in relation to the source consisting of the provision of qualifying services, after deduction of the tax thereon, shall be credited to an account to be kept by the company (that account and that company being referred to as the "exempt account" and the "relevant company" respectively).
[Ins. Act 476:s.15]
(5) (Repealed by Act 531:s.14).
(6) Paragraphs 5 and 6 of Schedule 7A shall apply as if any reference in those paragraphs to any income exempted or which has become exempt under paragraph 3 were reference to income credited to the exempt account under subsection (4A).
[Am. Act 476:s.15,Am. Act 531:s.14]
(7) For the purposes of this section-
"approved operational headquarters company" means a company-
[Subs. Act 531:s.14]
(a) which carries on a business in Malaysia of providing qualifying services to its offices outside Malaysia or to its related companies outside Malaysia; and
(b) which is approved by the Minister for the purposes of this section;
[Subs. Act 531:s.14]
"qualifying services" means-
(a) services provided by an approved operational headquarters company to its offices outside Malaysia or to its related companies outside Malaysia in respect of-
(i) general management and administration;
(ii) business planning;
(iii) procurement of raw materials, components and finished products, for use in the business of its offices outside Malaysia or its related companies outside Malaysia;
(iv) technical support;
(v) marketing control and sales promotion planning;
(vi) training and personnel management;
(b) provision of treasury and fund management services to its offices outside Malaysia or its related companies outside Malaysia and, where such services include the provision of credit facilities, the funds for providing such facilities can be obtained from outside Malaysia or within Malaysia and where such funds are obtained from within Malaysia the amount shall not exceed ten million ringgit; and
[Subs. Act 544:s.11]
(c) research and development work carried out in Malaysia on behalf of its offices outside Malaysia or its related companies outside Malaysia;
"related company", in relation to an approved operational headquarters company, means a company-
(a) the operations of which are or can be controlled, either directly or indirectly, by the approved operational headquarters company;
(b) which controls or can control, either directly or indirectly, the operations of the approved operational headquarters company; or
(c) the operations of which are or can be controlled, either directly or indirectly, by a person or persons who control or can control, either directly or indirectly, the operations of the approved operational headquarters company.
