| # Partial Exemption Partial Exemption involves apportioning of the amount of residual input tax claim by the mixed supplier and exempt supplies. The input tax claimed is provisional and has to be adjusted annually or at the end of a longer period. When a mixed supplier incurs residual input tax, the supplier cannot claim the full amount of the residual input tax, unless the amount of exempt supply is within the limit which is specified by the De Minimis rule. De Minimis Rule states that a taxable person can treat the exempt input tax as input tax attributable to taxable supplies if the total value of the exempt supplies excluding incidental exempt financial supplies does not exceed: an average of RM5,000 per month, and an amount equal to 5 percent of the total value of all taxable and exempt supplies made in that period. Partial exemption can be provided if: Company has to make both taxable and exempt supplies during the period. The exempt supply limit is in line with the De Minimis Rule Input tax is levied for Residual services on the purchases / expenses Partial Exemption amount = x % * Residual input Tax for the period Annual partial exemption amount = (Annual amount as per IRR * Total of RE Tax amount) – (Total of monthly Partial exemption amount) |