About Structured Internship Programme
The objectives of the SIP are to:
- Introduce students to the working world as early as possible
- Provide practical experience and emphasise the development of specific knowledge or skills for students of higher educational institutions
- Prepare graduates to become relevant to industries thus, generating more employable graduates to fill the current talent shortage in Malaysia
- Encourage companies/industries to make internship programmes more structured in terms of their competency development through the double tax deduction incentive
Benefits for students:
- Chance to experience working life and put theories learnt from university into practice
- Familiarise themselves with the working culture of preferred industry or company before embarking on their careers
- A platform to demonstrate knowledge, skills and abilities to be considered as a future employee
- Develop skill sets required by the industry through a structured internship
Benefits for companies:
- Enhance visibility of internship programme to undergraduates
- Access to a wider base of qualified talent pool
- Forge closer relationship with universities
- Double tax deduction incentive for monthly allowance and other relevant costs
Tax Incentive in SIP
A company that hires Malaysian full-time undergraduates from local IPTA and IPTS, to undergo its structured internship programme that is endorsed by TalentCorp, is eligible for double tax deduction incentive for related expenses incurred on the interns during the internship programme.
The following are definitions applicable to this SIP tax incentive.
- "higher educational institution" means any Institution in Malaysia, established under the Universities and University Colleges Act 1971 [Act 30], University Technology MARA Act 1976 [Act 173] or the Private Higher educational institutions Act 1996 [Act 555] and registered with the Ministry of Higher Education.
- "student" means an individual
- who is a Malaysian citizen,
- who is pursuing a bachelor degree programme, diploma and equivalent vocational certification on full-time basis in local institutions of higher learning
- who completes the approved internship programme before completion of the final semester of the student’s diploma/ degree (and equivalent) programme.
- "approved internship programme" means a structured internship programme that provides practical experience and emphasises the development of specific knowledge or skills for students of higher educational institution and that internship programme is approved by the Talent Corporation Malaysia Berhad, based on its guidelines;
Participating companies (includes partnerships such as legal and accounting firms) shall observe the following guidelines when submitting for endorsement application.
- The organisations shall meet the following criteria to be eligible for the proposed incentive.
- Partnership or companies with share capital of at least RM 2.5 million.
- A proven average revenue record of RM 21 million and more over the past 3 years
- For non-manufacturing companies - should at least have a minimum of 50 FTEs.
- For manufacturing companies - should at least have a minimum of 100 FTEs.
- Years of establishment - The Companies must at least have been established for 5 years and more. However, companies that meet the above (i), (ii), and (iii) but only have been established between 3 to 5 years may be considered.
- Participating companies shall only submit application online via / and attach the following documents, otherwise the application is deemed incomplete.
- The Company Search Results from SSM (dated within 14 days from the date of application).
- A write-up of the structured Internship programme to detail out the following:
- Objectives of the programme
- Programme framework
- Process and procedures
- Internal policy
- Assessment of the interns during the training
- Participating companies can only claim double deduction tax incentive on SIP only for the following intern/ student,
- who is a Malaysian citizen,
- who is pursuing a bachelor degree programme, diploma and *equivalent vocational certification on full-time basis in local institutions of higher learning
Note: * equivalent refers to any programme approved by MoHE/ MQA as equivalent to degree/diploma. i.e. ACCA, ICAEW Note: Please visit www.mqa.gov.my and select MQR to check whether the programme is equivalent to a degree/ diploma programme.
- who completes the approved internship programme before completion of the final semester of the student’s diploma/ degree (and equivalent) programme
- Participating companies shall claim the tax incentive for the internship programme for the year of assessment in which the endorsement is issued.
- Participating companies shall provide each intern with a minimum of cash, or/and cash equivalent of RM500 monthly allowance.
- Participating companies are also allowed to claim tax deduction on the following other direct expenses, limited to a maximum where the average total expenses is RM5,000 per student per year of assessment.
- Meals, transport and accommodation allowances.
- Training offered during the internship programme
- Payment to the Third Party/ Outsourced Party running or administering the programme
Note: In some cases, companies outsource a third party to develop and run the internship programmes or administering the interns.
- Participating companies shall include the profile of the outsourced party (if any) in the write-up of the structured internship programme.
- Participating companies shall submit its application for endorsement annually, at least one (1) month before its expiry date.
- Upon receiving endorsement from TalentCorp, companies must comply with the following:
- advertise internship opportunities in http://www.ready4work.my
- update the status of interns hired (filled positions number) to TalentCorp via Structured Internship Programme (SIP) Portal
- For operational efficiency, participating companies are encouraged to respond to students' applications for internship programme within two (2) to three (3) weeks.
The Structured Internship Programme
Participating Companies shall observe the following guidelines when designing its structured internship programme.
- Structured Internship Programme (SIP) is an internship programme that provides practical experience and emphasizes the development of specific knowledge or skills for students of higher educational institution
- The internship programme shall clearly state its objectives and learning outcomes. The objectives and the outcomes should be communicated to the interns during their introduction week.
- The programme shall cover a minimum of ten (10) weeks.
- This programme shall accommodate the compulsory and non-compulsory internships. For compulsory internship, the programme shall be in continuous minimum ten (10) weeks duration.
- The design of the programme shall be able to also accommodate staggered duration, in the case of non-compulsory internship. However, the interns shall complete the programme within twelve (12) months period to be eligible for the tax incentive.
- The programme offered must be relevant or similar to the students' field of study and should emphasize on the following skills and attributes:
Technical Competence Personal Competence Business Competence Technical/ functional knowledge and skills required substantially in the area of responsibility of the position. Personal attributes and skills that enhances individual's interactions and increase personal effectiveness. Professional attributes and skills required to enhance professional and business performance. Example:
• Specific technical knowledge/ skills
• Communication skills
• Presentation skills
• Personal effectiveness
• Business acumen
• Conflict resolution and negotiation
• Teamwork/ teambuilding
- The programme shall also define the monitoring and assessment mechanisms to keep track of the interns' progress
Sample of Structured Internship Programme Framework
Submission for Tax Deduction
Participating companies shall observe the following guidelines when filing for the double tax deduction.
- The Company shall attach the Letter of Endorsement from TalentCorp for the claimed structured internship programme.
- The Company shall file the following supporting documents for tax submission purposes. The list below is non-exhaustive.
- Proof of Attendance during the internship
- Proof of expenses incurred for the interns such as cash, meals, transport, and accommodation allowances, i.e. receipts, etc.
- Proof of Training incurred during the internship
- Proof of Payment to outsourced party developing, running or administering the programme
Note: Some companies outsource a third party to develop their internship programme, as well as run or administer the programme.
- The Company shall provide correct and accurate information and details about their structured internship programme when file for tax deduction.
The following flow chart shows the process of application and endorsement of structured internship programme.