28 Oct 2016
MALAYSIA: More Profit, Less Tax Package Unveiled for 2017 and 2018 Assessment Years
Companies becoming more profitable in Malaysia are set to pay a lower level of tax under a new initiative unveiled as part of the country’s National Budget. From 1 January 2017 – the start of the new assessment year - any companies registering a year-on-year rise in income will be eligible to pay a reduced rate of income tax on the increased amount.
With the reduced amount payable calculated on a sliding scale, the proposed tax cuts are:
|Increase in chargeable income||Income tax reduction|
|5 to <10%||1%|
|10 to <15%||2%|
|15 to <20%||3%|
In an additional incentive for SMEs, the tax rate on their first RM500,000 (US$120,222) worth of income will be reduced from 19% to 18% as of the start of the new assessment year. Both incentive packages will also apply in 2018.