What is an approved organisation?
An approved organisation is an organisation that the income will qualify for tax exemption under subsection 44(6) of the Income Tax Act 1967. Normally this organisation is establish in Malaysia, have clear objectives that is meant for charity, education and welfare to all races and religion in Malaysia. At the application stage, the applicant must comply with a minimum of two-year active operations, two-year recent audit reports as well as supporting letters from related government departments and ministries and any other registration documents. The process is very stringent and most of the time not all organisation have patient to wait and fulfil the requirements.
In MyFundAction, we managed to be an approved organisation under “Tabung Kebajikan dan Pendidikan MyFundAction” in the year 2021 for the period of five years until 2025. The qualification is given to the Tabung level, not the organisation level we have many objectives in place. Other than charity, we also focus on entrepreneurship and leadership as well.
Benefits of collaborating with MyFundAction
The best part of getting this qualification is that we manage to attract more supporters collaborating with our impactful programs and at the same time minimising their tax burden. This is because any donations contributed to this organisation will qualify for a tax deduction in arriving at their chargeable income. Our supporters need to remember that the number of donations is restricted to 10% of their aggregate income for the year of assessment. We are not responsible for the excess amount of donations that the taxpayers cannot claim later on, as the responsibility is on the taxpayers, not the organisation.
Who can get this tax deduction?
Any individuals, organisation, and companies who declared their income in Malaysia are able to enjoy this tax deductions benefit. The new guidelines by the Inland Revenue Board of Malaysia dated 5 September 2019, required the supporters to provide their full name, ID number/Registration number, and full address. Failure to provide the above information, no tax deduction receipts will be issued. Our supporters will be receiving their hardcopy receipt for the collaboration made (no electronic receipt at the moment) as required by the Inland Revenue Board of Malaysia. Our supporters can always check the validity of the receipt at IRBM websites anytime.
Type of program that qualify for tax deductions
Tax deductions only apply for programs organise within Malaysia meanwhile programs outside Malaysia cannot qualify for tax deductions. These are the rules from IRBM under subsection 44(6) of the Income Tax Act 1967. However, we will try our best to get approval from IRBM to qualify the tax deductions for the program outside Malaysia in the future.
by: Umi Fathin Atia Misban, CFO MyFundAction