Tax Incentives for Travel Agencies

Guidelines

Application for Tax Incentives by Tourism Operating Companies
(Travel Agencies)
for the Years of Assessment 2026–2027 (Foreign Tourists)


1 Introduction
1.1
To encourage and stimulate tourism activities in conjunction with the Visit Malaysia 2026 Campaign (VM2026), tourism operating companies that organise tourism packages bringing foreign tourists into Malaysia and meet the prescribed number of tourists within the basis period for a year of assessment may apply for a tax exemption. Applications may be submitted to the Ministry of Tourism, Arts and Culture (MOTAC) for verification of the number of tourists for a 100% tax exemption on the value of increased business income under the Income Tax Act 1967.
2 Terms and Conditions
2.1
The tourism operating company must provide tourism packages to Malaysia (inbound) or to any destination within Malaysia for foreign tourists, including air, land or sea transportation and accommodation.
2.2
The company must bring in no fewer than 1,000 foreign tourists within the basis period for a year of assessment. Tourism operating companies are REQUIRED to submit the passport numbers of foreign tourists to the Ministry for assessment purposes.
2.3
The value of increased income means the difference between the business income derived from operating tourism packages within Malaysia for foreign tourists during the relevant basis period and the business income derived during the immediately preceding period.
2.4

An example of the calculation of increased income is as follows:

VMY2026 Sdn. Bhd. brought in 1,200 foreign tourists, thereby meeting the minimum requirement of 1,000 tourists, in 2026.

The income derived from tourism packages within Malaysia was RM800,000 for the year of assessment 2026, while the income for the year of assessment 2025 was RM500,000.

The value of increased income eligible for income tax exemption is RM300,000 [RM800,000 (2026) − RM500,000 (2025)].

2.5
Applications to MOTAC for verification of the total number of foreign tourists for tax exemption purposes apply to the years of assessment 2026 and 2027. Applications must be submitted no later than six (6) months after the end of the company’s financial year.
2.6
Where requested, the certified public auditor or the company must submit supporting documents such as bills, receipts, invoices and itineraries relating to the claim for review by the Ministry. The documents must be provided in Malay or English.
2.7
Tourism operating companies applying for the tax exemption must maintain a separate account for income derived from activities eligible for the exemption.
2.8
A verification letter from the Ministry of Tourism, Arts and Culture will only be issued to the tourism operating company after the Ministry is satisfied with the verification provided by the certified public auditor or the company.
3 Application Procedure
3.1
The completed application form must be submitted to:
Secretary-General
Ministry of Tourism, Arts and Culture Malaysia
Industry Development Division
Level 14, Tower 1
No. 2, Jalan P5/6, Precinct 5
62200 Putrajaya
3.2
Failure to submit complete documents in accordance with the checklist may result in the application being rejected.
3.3
The Ministry of Tourism, Arts and Culture is not obliged to provide the reasons for the rejection of an application.
3.4
Applications verified for tax relief purposes remain subject to all provisions under the Income Tax Act 1967 and audit review by the Inland Revenue Board of Malaysia.
3.5
The Tax Incentive Application Form is provided free of charge and does not involve any registration fee.
3.6
The Tax Incentive Application Form must be typed.

Application Flowchart

Tax Incentive Application for
Tourism Operating Companies

Application received by MOTAC Document review and verification of the company’s status Complete Yes No Query on incomplete information Company resubmits documents or additional information Verification letter issued by MOTAC

Applications must be submitted within six (6) months after the end of the company’s financial year.

Documents to Be Submitted
  1. Official application letter from the company.
  2. A completed and typed Tax Incentive Application Form.
  3. The company’s Memorandum and Articles of Association.
  4. A valid Tourism Operating Business Licence issued by the Ministry of Tourism, Arts and Culture.
  5. Latest SSM e-Info.
  6. List of foreign tourists containing their names and passport numbers.
  7. Complete itinerary information for the tourism packages concerned.
Download Documents