If LHDN (Lembaga Hasil Dalam Negeri) is requesting an approval letter from the Ministry of Finance (MOF) for your tax claim, it is likely due to a common confusion between the Angel Tax Incentive (ATI) and the Equity Crowdfunding (ECF) Tax Incentive.
While the Angel Tax Incentive requires an approval letter from MOF (via MBAN), the ECF Tax Incentive does not. Here is how you should handle this with your LHDN officer:
1. Clarify the Tax Order
Inform the LHDN officer that you are claiming the ECF Tax Incentive, which is governed by specific gazetted orders. You are NOT claiming under the Angel Tax Incentive (ATIO).
Cite the following legal orders to the officer:
- Income Tax (Exemption) (No. 4) Order 2022 [P.U.(A) 142] (“Tax Exemption Order”)
-
Income Tax (Exemption) (No. 4) Order 2022 (Amendment) Order 2024 (“Amendment Order”)
2. Explain the Filing Form Confusion
Explain to the officer that because there is no dedicated separate section for the "ECF Tax Incentive" on the current tax filing forms, LHDN (through the Securities Commission) have instructed investors to file their claims in the same section as the MBAN/Angel Tax Incentive.
This shared field is the primary reason why officers may mistakenly expect an MOF approval letter.
3. Provide Supporting Evidence
To verify your claim, you can provide the following to LHDN:
Annual Certification of Investment: This is the document provided to you by pitchIN (after verification by the Securities Commission). This serves as your proof of investment.
Reference the SC FAQ: Advise the officer to refer to the Securities Commission Malaysia’s official FAQ on ECF Tax Exemption, which details these procedures.