CTOS Digital has announced that its wholly owned major subsidiary CTOS Data Systems Sdn Bhd has received approval in principle from the Ministry of Finance via Malaysia Digital Economy Corporation Sdn Bhd on the extension of income tax exemption under Section 127(3)(b) of the Income Tax Act 1967.
The approval in principle is applicable until the amendment of provisions for the extension of the second five-year period is approved and gazetted.
With this approval, CDS will enjoy tax exemption for further 5 years, effective from 9 November 2021 until 8 November 2026. This translates to an estimated effective tax rate of approximately 4% for CDS and 7% for CTOS Digital group. The total incremental tax provision from 9 November 2021 to 30 June 2022 is approximately RM7.8 million and will be written back once it is approved and gazetted.
