EXCEL FORCE MSC BERHAD Annual Report 2019

EXCEL FORCE MSC BERHAD - ANNUAL REPORT 2019 98 notes to the financial statements 31 december 2019 (cont’d) 28. Taxation Group Company 2019 2018 2019 2018 RM RM RM RM Tax expenses recognised in profit or loss Current tax provision 1,609,367 1,272,890 1,609,367 1,271,340 Under provision in prior years 209,293 41,697 209,292 41,697 1,818,660 1,314,587 1,818,659 1,313,037 Deferred tax: Over provision in prior years - (37,042) - (37,042) - (37,042) - (37,042) 1,818,660 1,277,545 1,818,659 1,275,995 The subsidiary company, Insage (MSC) Sdn. Bhd. (“Insage”) was awarded with the Multimedia Super Corridor (“MSC”) status by the Government of Malaysia. The financial incentive awarded to Insage under the MSC status is “Pioneer Status” under Section 4A of the Promotion of Investment Act 1986. Insage has been granted the Pioneer Status by the Ministry of International Trade and Industry for services under the Promotion Investment Act 1986 in which the statutory income is exempted from tax for a period of 5 years from 23 March 2014 to 22 March 2019. The salient terms of the Pioneer Status are as follows: (i) 100% tax exemption on business income; (ii) unabsorbed pioneer capital allowances can be carried forward to the post pioneer period and deducted against the post-pioneer income of a business relating to the same promoted activity or promoted product; and (iii) unabsorbed pioneer losses can be carried forward to the post pioneer period and deducted against the post- pioneer income of a business relating to the same promoted activity or promoted product. Malaysian income tax is calculated at the statutory tax rate of 24% (2018: 24%) of the estimated assessable profits for the financial year.

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