# Angel Investor Tax Incentive — the Gazetted Deadline Passed on 31 December 2023

> What the angel investor exemption gives, the investor and investee conditions, the two-year holding rule — and why the operative gazette order still closes applications at 31 December 2023.

- Category: taxation
- Language: en
- Status: published
- Updated: 2026-07-20
- Canonical: https://negaraku.md/en/taxation/angel-investor-tax-incentive

---

Every startup deck that mentions the angel tax incentive says it runs to 2026. The gazette says otherwise. The operative instrument is the Income Tax (Exemption) (No. 3) Order 2014, P.U.(A) 167/2014, made under s.127(3)(b) of the Income Tax Act 1967 and deemed in operation from 1 January 2013. Its paragraph 5(a)(ii) requires the investor to have applied to the Minister **not later than a fixed date**, and that date has moved exactly twice.

## What the operative rule actually says

| Instrument | Gazetted | Effect on paragraph 5(a)(ii) |
| --- | --- | --- |
| P.U.(A) 167/2014 | 20 June 2014 | Applications from 1 January 2013 to **31 December 2017** |
| P.U.(A) 411/2017 | 27 December 2017 | Substituted **31 December 2020** |
| P.U.(A) 399/2019 | 31 December 2019 | Substituted **31 December 2023** |

A sweep of the AGC subsidiary legislation database on 20 July 2026, searching the Order's title in both languages, returned no further amendment. **As the gazetted law stands, applications closed on 31 December 2023.** Public Ruling 12/2020 agrees at paragraph 5(iv).

The commonly repeated extension to 31 December 2026 traces to a Budget 2024 announcement, not to an instrument. An announcement without a gazette order gives a taxpayer nothing to cite when the exemption is queried. The AGC status field still shows P.U.(A) 167/2014 as `PRINCIPAL`, but that field is an instrument type rather than an in-force flag, so it is no evidence either way.

Cradle Fund Sdn Bhd, the Ministry of Finance agency housing the Angel Tax Incentive Office, still publishes 31 December 2017 as the qualifying window on its own incentive page — two gazetted extensions out of date. Do not read agency web copy as a statement of the law in either direction.

## What the relief gives

Paragraph 3(1) exempts the angel investor's aggregate income for a basis period from income tax **in the second year of assessment following the year of assessment in which the investment was made**. Paragraph 3(2) sets the exempt amount at the amount of the investment.

Paragraph 3(3) is the limit most summaries omit: where the investment exceeds aggregate income for that year, the excess is not refunded and cannot be used as a credit for that or any later year of assessment. The relief is use-it-or-lose-it in a single year.

Public Ruling 12/2020 at paragraph 7.3(b) records the sizing condition, which lives in the Minister's approval letter rather than in the Order: the investment for a one-year period must be **not less than RM5,000 and not more than RM500,000**.

## The conditions on each side

**The investor** must be resident in Malaysia with income not derived solely from business; must invest solely to finance activities the Minister has approved; must not hold **more than 30 per cent** of the investee's total paid-up share capital; and must have no parent or parent-in-law, child including a stepchild or adopted child, sibling, grandparent, grandchild or spouse who makes any investment in the same investee company. Paragraph 6 excludes an investor who has claimed a deduction under the Income Tax (Deduction for Investment in a Venture Company) Rules 2005, P.U.(A) 76/2005.

**The investee** must be incorporated in Malaysia and resident here — the Order still cites the Companies Act 1965, which Public Ruling 12/2020 reads as the Companies Act 2016 — must have at least **51 per cent** of its issued ordinary share capital directly held by citizen shareholders other than the prospective angel, and must carry on activities approved by the Minister.

**The holding period** is in paragraph 3(4)(a): the investment must not be disposed of, in full or in part, within **two years** of the date it was made. Paragraph 4 lets the Minister withdraw the exemption for any breach of the approval letter.

The Malaysian Business Angel Network accredits the investor; the Angel Tax Incentive Office, a unit under Cradle Fund Sdn Bhd, certifies the investee.

## Common mistakes

- **Selling the incentive as open.** No gazette order extends the deadline past 31 December 2023. Say that before it reaches a term sheet.
- **Treating it as a deduction against the investment.** It exempts aggregate income, and only in the second year of assessment after the investment.
- **Forgetting the excess is dead.** RM500,000 invested against RM200,000 of aggregate income exempts RM200,000. The rest is gone.
- **Investing alongside a relative.** Any investment in the same investee by a listed relative disqualifies the angel entirely — Example 1 of Public Ruling 12/2020.
- **Exiting early.** A partial disposal inside two years breaches paragraph 3(4)(a).

## What's next

If you hold an approval letter for an investment made on or before 31 December 2023, the exemption still runs — identify the correct year of assessment, keep the approval letter and shareholding evidence, and check the two-year holding date before any secondary sale. For a new investment, ask Cradle whether ATIO is still processing applications, and treat any answer as administrative practice until an amending order appears in the gazette.

## Sources

- Income Tax (Exemption) (No. 3) Order 2014, P.U.(A) 167/2014 — https://lom.agc.gov.my/ilims/upload/portal/akta/outputp/pua_20140620_P.U.%20(A)%20167-Perintah%20Cukai%20Pendapatan%20(Pengecualian)%20(No.%203)%202014.pdf (Attorney General's Chambers)
- Income Tax (Exemption) (No. 3) 2014 (Amendment) Order 2017, P.U.(A) 411/2017 — https://lom.agc.gov.my/ilims/upload/portal/akta/outputp/pua_20171227_P.U.%20(A)%20411.pdf (Attorney General's Chambers)
- Income Tax (Exemption) (No. 3) 2014 (Amendment) Order 2019, P.U.(A) 399/2019 — https://lom.agc.gov.my/ilims/upload/portal/akta/outputp/pua_20191231_PUA399.pdf (Attorney General's Chambers)
- Ketetapan Umum No. 12/2020 — Insentif Cukai bagi Pelabur Mangkin — https://www.hasil.gov.my/wp-content/uploads/KU_12_2020.pdf (LHDN)

---
Source of truth: https://github.com/negaraku-md/NegaraKu.md
License: CC BY-SA 4.0