In Oct 2013, Malaysia Government outlined in recent Budget announcement with major key points for 2014 Malaysia Income Tax Rate as follows:
For Individual Tax:
- Reduction of individual tax rates of 1% to 3% across various income bands for resident individual (foreigners/Malaysians) with the maximum tax rate is reduced from 26% to 25%, with the 25% rate applying to income in excess of RM400,000. For non-resident individual for foreigners, the tax rate will be flat at 26%. The new assessment 2014 tax effect with Year of Assessment 2015.
- Relief of RM2,000 is given to tax residents earning up to RM8,000 per month with an aggregate income of up to RM96,000 a year.
- Individuals who have been subjected to monthly tax deductions are not required to file tax returns if such monthly tax deductions constitute their final tax. [Check out 2014 - Personal Tax Relief for Resident for Expatriate]
For Corporate Tax:
- Companies with paid up share capital of up to RM2.5 million are taxed at a reduced rate of 19% on the first RM500,000 of chargeable income. The excess is taxed at a reduced rate of 24%
- 100% accelerated capital allowance on information technology and communication (ICT) equipment is extended to YA 2016
- The application deadline for income tax incentive for new investments in 4 and 5 star hotels be extended to 31 December 2016
- Double deduction is given to small and medium enterprises on the difference between the original salary and the minimum wages paid in calendar year 2014
- Companies with Flexible Working Arrangement (FWA) status will be given a double deduction on expenses incurred in the training of employees and payment of consultancy fees to design an appropriate FWA
- Company secretarial fees of up to RM5,000 and tax filing fees of up to RM10,000 deductible
- Expenses incurred on the training of employees in the area of accounting and ICT for GST purposes are entitled to a double deduction.
- Imposition of Real Property Gains Tax of 0% to 30% for Malaysian citizens and permanent residents for first 5 years
- For foreigners and companies, property gain tax will be 30% for first 5 years and thereafter rate of 5% each year
- Propose GST of 6% implementation from 1st April 2015. GST will replace Sales Tax and Service Tax
Complete info on Malaysia Tax can be found at Malaysia Inland Revenue webiste www.hasil.gov.my. The service of tax guidance is available during consultation of your new business’s options to set-up. Let us know of your objectives by calling us at +603-2181 2828 or email us at firstname.lastname@example.org