1. Basis of Taxation
Income is taxed on a current year basis. All taxpayers are required to submit tax returns on a self assessment basis. Income tax for resident and non-resident is imposed on income accruing in or derived from Malaysia.
2. Corporate Tax
Company resident in Malaysia which has a paid-up capital (PUC) of RM2.5m and more at the beginning of the basis period is subject to corporate tax at 25% on its chargeable income (CI).
However, for SMEs, a lower corporate tax rate at 20% is applicable on the first RM500,000 of CI. CI in excess of RM500,000 will be subject to the normal corporate tax rate at 25%.
A SME is a company resident in Malaysia with a paid up capital of ordinary shares of RM2.5m or less at the beginning of the basis period of a year of assessment whereby such company does not control or is controlled directly or indirectly by another company which has a paid up capital of more than RM2.5m in respect of ordinary shares.
3. Withholding tax rate (non-treaty)
|
Non-resident person including a company, a body of persons and corporation |
Dividends |
Nil |
Interest |
15% |
Royalties/know-how |
10% |
Rents (for moveable property) |
10% |
Technical fees |
10% |
Section 4(f) income (see note below) |
10% |
Director fee |
26% |
Note: Section 4(f) income refers to gains and profits not specifically provided for under section 4 of the Income Tax Act 1967. Such income includes commissions and guarantee fees.
4. Residential individual tax rates
| Chargeable income |
RM |
Rate of Income Tax (%) |
| For every ringgit of the first |
2,500 |
0 |
| For every ringgit of the next |
2,500 |
1 |
| For every ringgit of the next |
15,000 |
3 |
| For every ringgit of the next |
15,000 |
7 |
| For every ringgit of the next |
15,000 |
12 |
| For every ringgit of the next |
20,000 |
19 |
| For every ringgit of the next |
30,000 |
24 |
| For every ringgit exceeding |
100,000 |
26 |
5. Non-residential individual tax rate 26%
6. Indirect Taxes
a) Services tax rate 5%
Applicable to any person provides taxable services, under the Service Tax Act 1975.
b) Sales tax rate 10%
Applicable to any person manufactures taxable goods locally or imported, under the Sales Tax Act 1972.
c) Good and Service Tax (GST) 4%
The proposed GST to be implemented by the 3rd quarter of 2011 has been deferred until further notice.
7. Estate duty
Had been abolished since I November 1991.
8. Stamp duty
For share transfer at RM3 per RM1,000 or part thereof.
For conveyance, assignment or transfer of properties:
On the first RM100,000 1%
On the next RM400,000 2%
Thereafter 3%
9. Real Property Gains Tax (RPGT)
The Minister exempts any person from RPGT in respect of any disposal of chargeable assets between 1/4/2007 to 31/12/2009. Any disposal of chargeable assets made after 31/12/2009 is liable to RPGT at a fixed rate of 5% if the disposal is made within 5 years from the date of acquisition of such chargeable assets. Any disposal of chargeable assets made after 5 years from the date of acquisition is exempt from RPGT.
10. Income tax filing deadlines
Types of Form |
|
Deadlines |
Form BE
Form B |
Residential individual |
30 April of following year
30 June of following year |
Form M |
Non-residential individual |
30 April of following year |
Form C |
Companies |
7 months from date of closing accounts |
Form P |
Partnerships |
30 June of following year |
11. Double Tax Agreements.
Country |
Royalties
% |
Interest
% |
Dividends
% |
Albania, Republic
Argentina *
Australia
Austria
Bahrain
Bangladesh
Belgium
Bosnia & Herzegovina**
Canada
Chile **
China,People’s Republic
Croatia
Czech Republic
Denmark
Egypt
Fiji
Finland
France
Germany
Hungary
India
Indonesia #
Ireland
Islamic Republic of Iran**
Italy
Japan
Jordan
Kazakhstan**
Korea,Republic
Kuwait
Kyrgyz,Republic
Lebanon
Luxembourg
Malta
Mauritius
Mongolia
Morocco
Myanmar**
Namibia
Netherlands
New Zealand
Norway
Pakistan
Papua New Guinea
Philippines
Poland
Qatar
Romania
Russia
Saudi Arabia
Seychelles
Singapore
South Africa
Spain
Sri Lanka
Sudan
Sweden
Switzerland
Syria
Taiwan
Thailand
Turkey
Turkmenistan**
United Arab Emirates
United Kingdom
United States of America*
Uzbekistan
Venezuela**
Vietnam
Zimbabwe** |
10
10
Nil or 10
10
8
Nil or 10
10
8
Nil or 10
10
Nil or 10
Nil or 10
10
Nil or 10
10
10
Nil or 10
Nil or 10
Nil or 10
10
Nil or 10
10
8
Nil or 10
Nil or 10
10
10
10
Nil or 10
10
10
Nil or 8
Nil or 8
10
10
10
Nil or 10
10
5
Nil or 8
Nil or 10
Nil or 10
Nil or 10
10
Nil or 10
Nil or 10
8
Nil or 10
10
8
10
8
5
7
10
10
Nil or 8
Nil or 10
10
10
Nil or 10
10
10
10
8
10
10
10
10
10 |
Nil or 10
15
Nil or 15
Nil or 15
Nil or 5
Nil or 15
Nil or 10
10
Nil or 15
Nil or15
Nil or 10
Nil or 10
Nil or 12
Nil or 15
Nil or 15
Nil or 15
Nil or 15
Nil or 15
Nil or 15
Nil or 15
Nil or 10
Nil or 15
Nil or 10
Nil or 15
Nil or 15
Nil or 10
Nil or 15
10
Nil or 15
Nil or 10
Nil or 10
Nil or 10
Nil or 10
Nil or 15
Nil or 15
Nil or 10
Nil or 10
Nil or 10
Nil or 10
Nil or 10
Nil or 15
Nil or 15
Nil or 15
Nil or 15
Nil or 15
Nil or 15
Nil or 5
Nil or 15
Nil or 15
Nil or 5
10
Nil or 10
10
Nil or 10
Nil or 10
Nil or 10
Nil or 10
Nil or 10
10
10
Nil or 15
Nil or 15
Nil or 10
Nil or 5
Nil or 10
15
Nil or 10
15
Nil or 10
Nil or 10 |
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil |
- Approved industrial royalties and interest on approved loans (as defined in each double tax agreement) to non-residents are usually tax exempt.
- For Taiwan, double tax relief was given to the Taipei Economic and Cultural Office in Malaysia by way of exemption orders.
* Limited double tax treaty.
** Gazetted DTAs; not yet entered into force.
# protocol has been gazetted but not entered into force.
This publication has been prepared for the purpose of quick information dissemination to our counterparts in other Countries. Its contents should not be used as a basis for advice or formulating decisions under any circumstances. |
