Tax deduction on tithes
EFFECTIVE 2013, cash offerings to the church can be tax deductable if churches apply for approval. The amount claimable is up to a maximum of 7% on taxable income in line with provisions in the Income Tax Act. This incentive was first announced last year under the 2012 national budget. The application guidelines were recently finalised after a year of negotiations between the Inland Revenue Board (IRB) and the Christian Federation of Malaysia (CFM) with other religious groups.
The application will require each church to set up a separate account, called Tabung Pengurusan Rumah Ibadat or House of Worship Management Fund. The full guidelines by the IRB (dated 27/9/12) can be downloaded as follows:
1. Garis Panduan (Application Guidelines)
http://www.hasil.gov.my/pdf/pdfam/GP_TPRI_FINAL.pdf
2. Contoh Peraturan (House of Worship Fund Regulations)
http://www.hasil.gov.my/pdf/pdfam/PERATURAN_TPRI.pdf
Should your church wish to apply for this incentive, please follow the IRB guidelines. When the IRB approves an application, it will issue a number to each church. Churches can then issue official receipts bearing the number to members and donors. |