Malaysia: Business Environment
As of March 1, 2024, the standard service tax rate rose from 6% to 8%. However, specific services such as food and beverage, telecommunication, parking, and logistics services remain subject to the 6% rate.
Gains from disposals of real property are subject to a real property gains tax (RPGT). The RPGT rate is tiered based on the timing of the property disposal. Disposals within three years of acquisition are subject to a 30% rate, while disposals in the fourth and fifth years are taxed at 20% and 15%, respectively. For disposals made in the sixth year and beyond, the rate is 10%. Companies incorporated outside of Malaysia are subject to a 30% rate for disposals made within five years and a 10% rate thereafter.
Petroleum income tax in Malaysia is levied at 38% on income from petroleum operations, while an effective rate of 25% applies to income from petroleum operations in marginal fields. No other taxes are imposed on income from petroleum operations.
A levy is imposed on crude palm oil and crude palm kernel oil when the price exceeds MYR 3,000 per ton in Peninsula Malaysia and MYR 3,500 per ton in Sabah and Sarawak. Additionally, the Construction Industry Development Board imposes a 0.125% levy on contract works with a contract sum above MYR 500,000 for every registered contractor.
Local companies are subject to an incorporation fee of MYR 1,000, while foreign companies pay a higher fee (from MYR 5,000 to MYR 70,000).
Stamp duty is levied at rates ranging from 1% to 4% of the value of property transfers, and at 0.3% on share transaction documents.
Malaysia | East Asia & Pacific | United States | Germany | |
Number of Payments of Taxes per Year | 9.0 | 23.4 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 174.0 | 195.1 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 38.7 | 33.8 | 36.6 | 48.8 |
Source: Doing Business, Latest available data.
Individual income tax (2024) | Progressive rates from 0% to 30% |
Up to MYR 5,000 | 0% |
MYR 5,000 - 20,000 | 1% |
MYR 20,001 - 35,000 | 3% |
MYR 35,001 - 50,000 | 6% |
MYR 50,001 - 70,000 | 11% |
MYR 70,001 - 100,000 | 19% |
MYR 100,001 - 400,000 | 25% |
MYR 400,001 - 600,000 | 26% |
MYR 600,001 - 2,000,000 | 28% |
Above 2,000,000 | 30% |
Qualified knowledge worker | 15% Applies to workers in the Iskandar Malaysia, from employment with a designated company engaged in a qualified activity (e.g. green technology, educational services, healthcare services, creative industries, financial advisory and consulting services, logistics services, tourism) |
Non-resident individuals | 30% flat rate on total taxable income |
Resident individual under the Returning Expert Programme | 15% for five years |
Non-citizen receiving a monthly salary of not less than MYR 25,000 and holding key positions/C-Suite positions | 15% for five years (limited to 5 non-resident individuals employed in each company that has been granted relocation tax incentive under PENJANA initiative) |
Several personal reliefs apply: a standard allowance of MYR 9,000, MYR 4,000 for a spouse (in case of joint assessment), MYR 2,000 for each child below 18 years of age, plus extra allowances for disabled persons.
Other deductions include medical expenses (MYR 8,000), pension/provident funds (MYR 4,000) and insurance premiums (MYR 3,000), education fees (MYR 8,000), certain childcare (MYR 7,000), contribution to SOCSO (MYR 350), etc. Click here for further info.
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Latest Update: November 2024