• Service: Tax, Global Indirect Tax, Global Mobility Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 10/28/2013

Malaysia - GST regime, income tax rates in 2014 budget 

October 28: Malaysia’s budget for 2014, as “tabled” on 25 October 2013, proposes a new goods and services tax (GST) to replace the existing sales tax and service tax regimes.

Once enacted, the GST would be effective 1 April 2015, and would be imposed at a rate of 6% (with some goods and services subject to GST at a rate of 0% or being designated as exempt from GST).

Other tax proposals

The 2014 budget also proposes:

  • Reductions of individual tax rates of 1% to 3% across various income bands
  • Reductions in income tax rates, from 25% to 24%, for companies, limited liability partnerships, trusts, and estates of individuals domiciled outside Malaysia at the time of their death
  • A reduction (1% to 2%) in the income tax rates for cooperatives on taxable income above RM 150,000
  • An extension of the 100% accelerated capital allowance on information technology and communication
  • An extension in the deadline (to the end of 2016) to apply for an income tax incentive for new investments made in certain hotels
  • Increased deductions for salaries, employee work-place benefits, and employee training provided by certain employers
  • Introduction of a “real property gains tax” at a rate of 0% to 30% for Malaysian citizens and permanent residents and at a rate of 5% to 30% for companies and non-Malaysian citizens

Read an October 2013 report [PDF 180 KB] prepared by the KPMG member firm in Malaysia: 2014 Budget Highlights

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