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Institutions/Organizations/Funds Primarily Is Not For Profit

Preparation for Applying for DGIR Approval

Institutions / Organisations / Funds Primarily Not for Profit Intending to Apply for Approval from the Director General of Inland Revenue (DGIR): What You Need to Know

  1. This note is intended to provide clarification on the matters that applicants from institutions / organisations / funds should understand before submitting an application for approval from the Director General of Inland Revenue (DGIR). It is hoped that this note will assist in providing better understanding and clarification to taxpayers, tax agents, IRBM officers, and the public regarding this matter.

  2. The purpose and objectives of the establishment refer to what the institution / organisation / fund aims to achieve and determine the types of activities to be carried out. To fulfil the approval requirements, the institution / organisation / fund must have purposes and objectives that include activities related to poverty alleviation, healthcare, education, welfare, or other ancillary activities as provided under Subsection 44(7) of the Income Tax Act 1967.

  3. In drafting the purposes and objectives, the institution / organisation / fund should consider the following questions:
    • What is the category of the institution / organisation / fund, and is it a legally established entity under any written law?
    • What is the primary intention behind the establishment of the institution / organisation / fund?
    • Apakah aktiviti utama institusi/organisasi/tabung anda?
    • What programmes or services will be provided?
    • Who are the target groups?
    • Who will benefit from the activities and programmes of the institution / organisation / fund?
    • Why is the institution / organisation / fund important to the public?
    • What is the expected operational duration of the institution / organisation / fund?
    • How will funds be generated to carry out the activities?
    • How will the structure of the institution / organisation / fund be established?

  4. Based on these considerations, the institution / organisation / fund will be able to assess its position and determine whether it qualifies to apply for approval from the DGIR under the provisions of Subsection 44(6).

Disclaimer :This note is intended solely to provide a general explanation of the issues raised. It cannot be used for technical reference purposes regarding factual and legal matters. Treatment of such situations should be in accordance with the provisions of the law and existing guidelines. This note only provides general guidance and explanation for the purpose of understanding as well as awareness.