2013 changes in Corporate Tax Rate for Malaysian Company
It is advisable for all foreigners to take note the 2013 changes in corporate tax rate and schedule for their Malaysian Company Sdn Bhd. These changes applied to all companies – resident or non-resident controlled companies.
Corporate Tax rate remains unchanged as follows:-
Net profit of MYR1- MYR 500,000 – chargeable rate is 20%
For every MYR 1 of net profit above MYR500,000 – chargeable rate is 25%
2013 changes in Corporate Tax Rate for Malaysian Company- What are the changes?
However there will be some changes with effect from 1st Jan 2013 for Year of Assessment 2013 for the following items:-
1) INTEREST INCOME TREATED AS BUSINESS INCOME
Presently, interest income such as interest income charged for late payments by debtors, may be treated as business income. Under the proposed amended Section 24(5) such interest income shall be treated as business income if the debenture, mortgage or other source to which the interest relates forms part of the stock in trade of a business of a person or the interest is receivable by a person from the business of lending money and that business is one, which is licensed under any written law.
Effective: 1st Jan 2013
2) TIME BAR FOR INCOME TAX ASSESSMENT
The time bar for the Director General to raise an assessment or additional assessment has been reduced from six years after the expiration of a year of assessment to five years. The time bar is not applicable in the case of fraud, willful default or negligence.
Effective Date: 1 January 2014
3) DOUBLE DEDUCTION FOR 1MALAYSIA TRAINING SCHEME
Double deduction be given on training expenses incurred by companies that participate in the 1Malaysia Training Scheme Programme to provide soft skills training and on-the-job-training to unemployed graduates. Applications for the approval of the training scheme have to be made to the Ministry of Finance. The types of qualifying training expenditure are:
a) Payment of monthly allowance at a minimum of MYR1,000 for each trainee for a maximum period of 12 months
b) Expenses incurred to provide soft skills training to the trainees; and
c) Fees paid to training providers to conduct soft skills programmes to enhance skills and to increase employability of the trainees.
Total training expenses for items (b) and (c) that qualify for double deduction are restricted to MYR5,000 for each trainee per annum of assessment
Effective Date: Applications between 1st June 2012 to 31st Dec 2016.
[Reference on more information on corporate taxation at Malaysia Inland Revenue Department website]
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