Some notable points from Budget 2023, which you may be interested to know:
The government does not intend to introduce the GST at the moment.
The government plans to introduce a Luxury Goods Tax on items such as luxury watches and luxury fashion items.
A 2% decrease in income tax rates for resident individuals at income band between RM 35,001 to RM 100,000.
A 0.5%-2% increase in income tax rates for resident individuals at income band between RM 100,001 to RM 1,000,000.
The government would conduct a study to introduce a low-rate capital gains tax for the disposal of unlisted shares by companies from 2024. The government would engage with relevant parties to examine the details of this proposal.
Tax incentives would be revised under the New Industrial Master Plan 2030, so that the reduced tax rates on offer would be scaled based on factors such as the creation of high-value jobs and the deepening of supply chains with local firms.
The cost of listing on the ACE and LEAP markets and the cost of listing technology-based companies on the Bursa Main Market would qualify for tax deduction of up to RM1.5m until year of assessment (YA) 2025.
Refinancing agreements executed between a borrower and a financial institution would continue to qualify for stamp duty exemption until 31 December 2024.
The existing accelerated capital allowance for automation equipment would be enhanced and expanded to cover the agriculture sector, with the scope of automation to also include the adaption of Industry 4.0 elements. This applies to applications received between 1 January 2023 and 31 December 2027.
For BioNexus status companies, income tax exemption on statutory income would be increased from 70% to 100% for applications received between 1 January 2023 and 31 December 2024.
Existing tax incentive offerings for the aerospace industry would continue to be made available until 31 December 2025.
Existing tax incentive offerings for companies undertaking ship building and ship repairing activities in Malaysia would continue to be made available until 31 December 2027.
Existing tax incentive offerings for manufacturing companies in the electrical and electronics sector which relocate to Malaysia would continue to be made available until 2024.
The scope of the existing tax incentives for food production projects would be widened to include agricultural projects based on Controlled Environment Agriculture, with the application period for the tax incentives to be extended to 31 December 2025.
Income tax exemption and investment allowance would be granted to manufacturers of charging equipment for electric vehicles in relation to applications received between 25 February 2023 and 31 December 2025.
A string of tax incentives have also been proposed for companies undertaking activities related to the use of carbon capture and storage technology until 2027.
Tax incentives offerings would be restructured under the New Industrial Master Plan 2030, with tiered tax rates that are tied to output, such as creation of high-value jobs, deepening of local supply chains and development of new industrial clusters.
Compiled by :
William Wong
Partner – Tax & Revenue
Direct Line : +603-2632 9905
Email : williamwong@rdl.com.my
Michael Fork
Associate – Tax & Revenue
Direct Line : +603-2632 9962
Email : michaelfork@rdl.com.my