Tax

(Tax Update) Mandatory Online Submission Form E-107D : 2% Tax Deduction For Commission to Agents, De

(Tax Update) Mandatory Online Submission Form E-107D : 2% Tax Deduction For Commission to Agents, Dealers or Distributors

Tax Latest Development

The Inland Revenue Board (IRB) has announced that, starting 1st January 2025, the electronic submission of the Section 107D Payment Form (e-107D) .

In a statement today, the IRB said that the submission of payment information to agents, dealers, or distributors (resident individuals) under Section 107D of the Income Tax Act 1967 was previously conducted manually.

In view of this mandatory implementation, taxpayers are required to submit Form CP 107D online using the e-107D method provided,” it said.

According to the IRB, Section 107D tax deduction payments must be made electronically using a bill number.

Payments can be completed either through the ByrHASiL platform at https://byrhasil.hasil.gov.my/HITS_EP/ or via the Financial Process Exchange (FPX) through the ByrHASiL link.

Key Salient Points of E-107D

• The WHT is not applicable on payment by way of credit note, contra-transaction and discount given to an agent, dealer or distributor.

• The payer company is required to apply the WHT even though the agent, dealer or distributor is subject to CP500 tax instalment payment.

• The category of individual includes sole proprietor and individual partner in a partnership. However, it excludes payment made to a partnership or a Limited Liability Partnership.

• The threshold amount of RM100,000 in the preceding year is to be determined each year. In determining the applicability of section 107D, the residency status of the agents, dealer or distributor in the immediate preceding year is irrelevant

• The preceding year RM100,000 threshold value is to be tested each year (not on a one-off basis) in order to determine whether withholding tax will apply for payment made in the current year.

• The agent, dealer or distributor must have an income tax reference number.

• The 2% WHT amount is to be reported in Form CP58.

• The 2% WHT will be considered as part of the payment for the balance of tax to be paid, upon submission of the income tax return form for the relevant YA by the agent, dealer or distributor.

• The WHT shall be remitted to the IRBM within 30 days after paying or crediting such payments to the agent, dealer or distributor. Remittance is to be made together with Form CP107D.

• If there is a failure to make the WHT payment to the IRBM within the stipulated time, a penalty of 10% would be imposed on the unpaid withholding tax. In addition, the tax deduction for the gross amount of the payment made to agent, dealer or distributor will be disallowed.

• Where a company is making payments to several agents, the company may complete the details of payment for each agents in the appendix [Lampiran CP107D(1)], which is to be attached together with the WHT remittance form [CP107D]. Each appendix could cater up to 20 recipients.

• The amended Form CP58 will include section to report the WHT deducted.

• The WHT remittance form and appendix as well as the updated Form CP58 have yet been released by the IRBM.

• The WHT can be made at the IRBM Service/Payment Counters.

Penalty

• 10% penalty if the payer fails to remit 2% to IRB within 30 days

• Commission is not allowed for tax deduction

Source

IRBM has issued a Frequently Asked Questions (FAQ) dated 28 February 2022 (only available in Bahasa Malaysia) on the application of the above Section 107D.

https://phl.hasil.gov.my/pdf/pdfam/Soalan_Lazim_Seksyen_107D_ACP_1967.pdf

(Tax Update) Tax Identification Number (TIN) search service

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(Tax Update) Tax Identification Number (TIN) search service

With the rollout of e-invoicing in Malaysia, some business owners have faced challenges obtaining the Tax Identification Number (TIN) when issuing e-invoices. To address this, the Lembaga Hasil Dalam Negeri Malaysia (LHDNM) has introduced new initiatives to ensure a smooth transition for taxpayers.

What’s New? Streamlined TIN Search Feature!

Starting 1 January 2025, searching for the TIN has never been easier, thanks to the new feature on the MyTax Portal!

📌 How to Search for TIN via MyTax Portal:

1. Log in to your MyTax account.

2. Use the ''Carian TIN'' function by scanning a QR code with the MyDigital ID App on your mobile device.

This new feature streamlines TIN retrieval for both individuals and businessess taxpayers:

For Individuals - Search using Identity Card (IC) number or passport number.
For Businesses - Search using Registration Number or company name.

📌 Integration with MyInvois and API

This new service integrates seamlessly with the MyInvois portal and Application Programming Interface (API), enabling businesses to prepare for the upcoming e-invoice implementation.

📌 Empowering Digital Identity:

Pair your tax management tools with MyDigital ID, Malaysia’s national digital identification platform. This secure and seamless system protects personal information while granting easy access to essential services, empowering users to transact confidently in the digital space.

Why It Matters:

These initiatives aim to:

Simplify tax compliance : Particularly with the e-invoice implementation, reducing administrative burdens for businesses and individuals.
Enhance security : Protect sensitive data with advanced digital identity verification.
Enable digital transformation : Support Malaysia’s transition to a digitally empowered economy with efficient and secure tools.

Let’s embrace a smarter, more secure way to manage our taxes and digital identity! Businesses should prepare to adapt to these changes by integrating their systems with LHDN’s platforms, ensuring they remain compliant and competitive in an increasingly digital economy.

These advancements are paving the way for a digitally empowered Malaysia, where convenience meets security. Together, we can confidently navigate the digital era with these innovative tools at our fingertips.

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An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

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How to Register for E-PCB Plus in MyTax—Employer, Representative, and PCB Administrator

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How to Register for E-PCB Plus in MyTax—Employer, Representative, and PCB Administrator

Employers must register for E-PCB Plus via the MyTax portal to manage their monthly tax deductions (PCB). Here’s a quick guide to get started:

1. Employer Role
1.1 Log in to MyTax Portal.
1.2 Go to Profile > Role Application.
1.3 Select New Application and choose your role (e.g., Employer or Business Owner).

2. Employer Representative Role
2.1 Log in as Employer.
2.2 Click Profile > Representative Appointment.
2.3 Enter the representative’s identification details and click Submit.

3. PCB Administrator Role
3.1 Log in as Employer/Representative.
3.2 Go to Profile > PCB Administrator.
3.3 Enter the PCB Administrator’s identification number and click Submit.

4. Appointing an Administrator Representative
4.1 Log in to MyTax and go to e-PCB Plus.
4.2 Click Employee > Administrator Representative List.
4.3 Define task scope, set access permissions, and save.
4.4 Select the representative from employees or external staff.

Read the full content with visual aids in our blog
https://www.ktp.com.my/blog/e-pcb-plus-registration-visual-aids/02jan2025

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Personal Tax Reliefs for YA 2025

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As the Year of Assessment (YA) 2025 approaches, it’s the perfect time to understand the available personal tax reliefs to help you reduce your taxable income. At KTP, we’ve broken down the key reliefs in a clear and simple way to help you maximise your savings.

1. Personal Relief

Self (Taxpayer): RM9,000

2. Medical Expenses

Medical Expenses for Parents: RM8,000 for medical treatments, check-ups, and vaccinations.
Own Medical Expenses: RM10,000 for serious diseases, full medical examinations, and mental health treatments.
Disabled Person’s Equipment: RM6,000 for supporting equipment for yourself, spouse, or children.

3. Relief for Disabled Individuals

Disabled Taxpayer: RM7,000
Disabled Spouse: RM6,000
Disabled Child (unmarried): RM6,000
Disabled Child Pursuing Higher Education: Additional RM8,000

4. Relief for Deduction for wife and payment of alimony or maintenance to former wife

Spouse (no income and combined assessment): RM4,000

5. Relief for Children

Child Below 18 Years: RM2,000
Child in Higher Education: RM8,000

6. Insurance and Education-Related Relief

Life Insurance RM3,000 and EPF Contributions RM4,000: Up to RM7,000.
Private Retirement Scheme (PRS): RM3,000
Insurance for Education or Medical Benefits: RM4,000
School/University Fees: RM7,000 for tertiary education, postgraduate studies, or professional courses.
SSPN (Skim Simpanan Pendidikan Nasional): RM8,000 for savings deposited for your child’s education.

7. Housing and Family Support

Interest on Housing Loans for first-time homeowners

House Price: No more than RM500,000: Tax Relief RM7,000
House price: Above RM500,000 to RM750,0000: Tax Relief RM5,000

Childcare Fees: RM3,000 for registered childcare centres or kindergartens.

8. Lifestyle Reliefs

Lifestyle Expenses: RM2,500 for purchases of books, magazines, broadband subscriptions, and self-skill enhancement courses.
Breastfeeding Equipment: RM1,000 for breastfeeding essentials (infants below two years old).
SOCSO Contribution: RM350
Sports Relief included parents: RM1,000 for purchasing sports equipment, rental or entry fees for sports facilities, and registration fees for sports competitions and gymnasium membership fee

9. Tax Incentives for EV Owners or food waste composting machine

Relief of up to RM2,500 for the use of electric vehicle (EV) charging facilities or purchasing food waste composting machines.

Plan Smart and Save More

Understanding these reliefs allows you to plan your finances and minimise your tax liabilities for YA 2025. Keep your receipts and proper records to ensure a smooth filing process.

Need help navigating your taxes?

The team at KTP is here to assist you. Contact us for personalised guidance and ensure you’re making the most of your tax reliefs.

(Tax Update) Tax Paid by Employers: Avoiding Costly Mistakes

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(Tax Update) Tax Paid by Employers: Avoiding Costly Mistakes

Many companies, particularly Sdn Bhds, include personal tax payments for directors or employees as part of their remuneration packages. While this may seem like a thoughtful benefit, it often leads to costly mistakes if not handled correctly.

Public Ruling No. 3/2024 by the Inland Revenue Board of Malaysia (IRBM) provides detailed guidance on the proper treatment of such arrangements and highlights common errors made by taxpayers. Understanding these nuances is essential to avoid penalties and ensure compliance.

Understanding Employer-Borne Tax as a Perquisite

When a company pays personal taxes on behalf of a director or employee, the payment is treated as a ''perquisite,'' becoming part of the employee's taxable income.

For example, if a director earns RM200,000 annually and the company pays RM40,000 in personal taxes, the director's total taxable income increases to RM240,000. This amount must be accurately reflected in the EA form.

Although employers may think paying these taxes eases the employee’s financial burden, failing to declare this benefit properly can create unintended tax liabilities for both parties.

Common Mistakes Made by Taxpayers

Mistake 1 : Assuming tax paid is tax deductibl ate the company level

One common error is treating personal taxes paid on behalf of directors or employees as a deductible business expense. This is not permitted under Malaysian tax law. IRBM considers these payments as non-deductible, and companies attempting to claim them may face significant tax liabilities and penalties during audits.

Mistake 2 : Failing to include tax borne as taxable benefits for employees

Another frequent mistake is not reporting taxes borne by the employer as part of the employee’s taxable benefits. This results in under-reporting the employee’s gross income, leading to penalties and additional taxes during IRBM reviews. This omission is especially prevalent among Sdn Bhds without proper tax policies.

How Mistakes Can Add Up

Scenario: XYZ Sdn Bhd pays RM20,000 in personal taxes for its director, whose annual salary is RM150,000.

Error 1: The company claims the RM20,000 as a deductible expense in its corporate tax filing. The IRBM disallows this claim, resulting in additional tax liabilities and penalties.
Error 2: The RM20,000 is not included in the director’s taxable income on the EA form, leading to under-reported income and personal tax penalties for the director.

What Does ''Tax Borne by Employer'' Mean?

When an employer covers an employee's income tax, the amount paid is added to the employee’s taxable income.

Example:
Hendrik, a foreign employee earning RM20,000 per month, has RM25,650 in taxes paid by his employer for 2023. This RM25,650 is treated as part of Hendrik’s 2024 taxable income and taxed accordingly. Accurate reporting is critical to avoid IRB penalties.

Why Is This Important?

Employers and employees must recognize that tax benefits come with obligations:

For Employers: Properly calculate, declare, and pay the tax liability to the IRB.
For Employees: Understand that such benefits increase taxable income and tax payable in the following year.

Your Next Steps

Keep detailed records of all employee benefits, including taxes paid.
Communicate transparently with employees about the tax implications of employer-borne taxes.
Seek professional advice to ensure compliance and avoid unnecessary penalties.

Final Thoughts

Managing employer-borne taxes correctly is essential for avoiding penalties and maintaining good standing with the IRBM. Mistakes in reporting or deductions can result in hefty fines and damage to your company’s reputation.

To learn more about managing these benefits effectively, contact our team at www.ktp.com.my. Together, we’ll help you navigate the complexities of Malaysian tax regulations.

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Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
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KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
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(Tax Update) Attention Employers: Prepare for the Transition to e-PCB Plus!

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(Tax Update) Attention Employers: Prepare for the Transition to e-PCB Plus!

The Inland Revenue Board of Malaysia (IRBM) is introducing a new e-PCB Plus system starting from the assessment year 2025. This system will replace the existing e-CP39, e-PCB, and e-Data PCB systems for the submission of PCB (Potongan Cukai Bulanan) statements and payments, including CP38 deductions.

To ensure a smooth transition, Phase 1 of the e-PCB Plus system has been available since 24 September 2024. Employers are strongly advised to complete the necessary registration steps on the MyTax Portal as soon as possible to avoid disruptions to their payroll compliance.

Key Actions You Must Take Now:

Register Key Roles on MyTax Portal
Employers must register roles such as Employer, Employer Representative, PCB Administrator, and Administrator Representative. This step is critical to gain access to the new e-PCB Plus system.
Update Employer and Employee Information
Once registered, you will need to update your details in the e-PCB Plus system itself. This ensures accurate calculations and compliance.
Act Now to Avoid Access Issues
Failure to complete the registration on the MyTax Portal will prevent you from using the e-PCB Plus system. This could lead to delays or errors in calculating PCB, submitting statements, and making payments for PCB or CP38 deductions.

We highly recommend completing the registration process without delay. The new e-PCB Plus system is designed to streamline payroll tax compliance, but preparation is key to leveraging its benefits effectively.

If you need assistance, feel free to contact our team at KTP for guidance. Stay ahead, stay compliant!

Past Blog on E-PCB Plus

5/9/24 LHDN’s New E-PCB PLUS System Part 1 https://www.ktp.com.my/blog/lhdns-new-e-pcb-plus-system/05sept2024
26/9/24 LHDN’s New E-PCB PLUS System Part 2 https://www.ktp.com.my/blog/lhdns-new-e-pcb-plus-system/26sept2024
5/9/24 LHDN 推出的新 E-PCB PLUS 系统

https://www.ktp.com.my/chineseblog/irb-epcb-plus-system/05sept2024

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Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
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KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

KTP Lifestyle

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(Tax Update) Dividend Income in Malaysia: What Changed and What It Means for You (Part 2)

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(Tax Update) Dividend Income in Malaysia: What Changed and What It Means for You (Part 2)

The Malaysian government introduced notable changes to the taxation of dividend income in Budget 2025, presented on October 18, 2024. Let’s break down these changes and explore how they impact individual taxpayers and entrepreneurs.

New Dividend Tax Structure

Starting from the 2025 assessment year, a 2% tax will apply to annual dividend income exceeding RM100,000. Importantly, this tax will only apply to the amount above the RM100,000 threshold (see the example for illustration)

Example:

Employment Income is RM300,000.
Dividend Income from companies in Malaysia is RM250,000. From this, RM100,000 is exempted from tax, leaving RM150,000 as the Statutory Dividend Income.
Aggregate Income is the total of Employment Income and Statutory Dividend Income, resulting in RM450,000.
After deducting Relief of RM9,000, the Total Chargeable Income is RM441,000.
To calculate the Chargeable Dividend Income, they take the Statutory Dividend Income (RM150,000), divide it by the Aggregate Income (RM450,000), and then multiply by the Total Chargeable Income (RM441,000). This results in a Chargeable Dividend Income of RM147,000.
Finally, the tax on this Chargeable Dividend Income is calculated at a 2% rate, giving a tax amount of RM2,940.

Exemption

The exemptions listed for taxation on dividend income for individuals are as follows:

Dividend income from sources outside Malaysia (Foreign Source Income) until the Year of Assessment (YA) 2036.
Dividends from the profits of companies with pioneer status (under the Promotion of Investments Act) and reinvestment allowance.
Dividends from the profits of shipping companies (under Section 54A of the Income Tax Act 1967).
Dividend income distributed by cooperatives (under Paragraph 12A, Schedule 6 of the Income Tax Act 1967).
Dividends distributed by closed-end funds (under Section 60H of the Income Tax Act 1967).
Dividends from domestic companies paid from dividends of Labuan entities.
Profit distribution by EPF (Employees Provident Fund), KWAP (Retirement Fund), LTAT (Armed Forces Fund Board), ASNB (Amanah Saham Nasional Berhad), or unit trusts.
Any exemption granted on dividend income in the hands of individuals as determined by the Minister.

Scope of Taxation

The scope of taxation for dividend income includes the following categories:

Resident and non-resident individuals – This means that both Malaysian residents and foreigners receiving dividends in Malaysia are subject to this tax.
Individuals holding shares through a nominee – Individuals who hold shares via a nominee (another person or entity holding the shares on behalf of the actual owner) are included in the scope.
Dividend income distributed by companies in Malaysia – Only dividends distributed by Malaysian companies fall within this scope, making locally-sourced dividend income taxable.

Key Unresolved Questions

Key issues requiring clarification by the Inland Revenue Board (IRB) regarding the taxation of dividend income include:

Taxable Individuals: Are both resident and non-resident shareholders, including those holding shares through nominees, liable to this tax?
Timing of Taxation: Should the tax be imposed when the dividend is declared, or only when it is paid or credited?
Non-Resident Exemptions: Are non-resident individuals eligible for the RM100,000 exemption on dividend income?
Withholding Tax: Will a withholding tax system be introduced for dividend income?
Deductions and Reliefs: Will shareholders be allowed deductions or reliefs, such as those related to interest on loans for acquiring shares or approved donations?
Application to LLPs and Partnerships: Will limited liability partnerships (LLPs) and partnership income distributions fall under the scope of this tax?
Dividend Voucher Details: Are companies and company secretaries required to specify dividends derived from tax-incentivized profits, like those from pioneer status or reinvestment allowances, on dividend vouchers?

Past blog on 2% Dividend Tax

17 Oct 2024 https://www.ktp.com.my/blog/2percent-tax-dividend-income-above-rm100k/17oct2024

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An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

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(Tax Update) Malaysia Budget 2025: Key Tax Updates for Corporate | KTP Tax Advisory

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(Tax Update) Malaysia Budget 2025: Key Tax Updates for Corporate | KTP Tax Advisory

Stay informed with KTP as we break down Budget 2025 and the major changes impacting Malaysian companies, employers, and taxpayers.

This comprehensive video covers the latest tax deductions, incentives, and allowances available to support businesses in Malaysia.

We focus on practical tax benefits designed to encourage flexible working, childcare, eldercare, and the hiring of returning women workers, plus accelerated allowances on tech investments.

Dive into the new tax incentives, including Smart Logistics Complex (SLC) qualifications, export benefits, and upcoming carbon taxes.

Key Highlights Include:

A) Companies & Business Deductions

Childcare & Eldercare Allowances: Employers can claim deductions for both childcare and eldercare expenses from YA 2025.
Flexible Working Arrangements (FWA): Companies implementing FWA may claim a 50% additional deduction on costs up to RM500,000.
Care Leave Provisions: 50% extra deduction for paid leave to employees caring for sick family members.
Support for Women Returning to Work: 50% additional deduction for employment expenses on hiring women back to the workforce.
ICT Equipment Allowance: Accelerated Capital Allowance (ACA) now reduced to two years with 20% Initial and 40% Annual Allowances for ICT-related investments.

B) Tax Incentives

Smart Logistics Complex (SLC): Investment Tax Allowance (ITA) up to 60% on CAPEX, aiming to boost Industry 4.0 integration in logistics with automation, AI, IoT, and blockchain.
Increased Exports: Enhanced scope for Integrated Circuit (IC) Design services, aligning with Malaysia’s goal to become an advanced tech hub.

C) Indirect Tax Updates

Sales & Service Tax: Adjusted exemptions and increased rates for non-essential goods starting May 2025.
Excise Duty on Sugary Drinks: Increased phased rates effective January 2025.
Carbon Tax: Introducing Malaysia's first Carbon Tax targeting energy, iron, and steel sectors by 2026.

YouTube Video
Watch our Budget 2025 Webinar for Individuals on YouTube : https://youtu.be/t2rFOCnrVLI

📌 Watch now to get the details and learn how these changes can impact your business!
📌 Visit www.ktp.com.my for more accounting insights and updates.
📌 Subscribe to KTP for more tax, finance, and business strategies tailored for Malaysia.

Past Update on Budget 2025

Dividend Income : https://www.ktp.com.my/blog/2percent-tax-dividend-income-above-rm100k/17oct2024
HR : https://www.ktp.com.my/blog/malaysia-budget-2025-hr/23oct2024
Companies : https://www.ktp.com.my/blog/malaysia-budget-2025-companies/24oct2024
Individual : https://www.ktp.com.my/blog/malaysia-budget-2025-individual/25oct2024
Tax Incentives : https://www.ktp.com.my/blog/malaysia-budget-2025-new-tax-incentives/30oct2024
Indirect Tax : https://www.ktp.com.my/blog/malaysia-budget-2025-indirect-tax/1nov2024

Visit Us

Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancies in Johor Bahru for interns, graduates & experienced candidates.

Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o

#Thk

#KTP

(Tax Update) Malaysia Budget 2025: Key Tax Updates & Reliefs for Individuals | KTP Tax Advisory

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(Tax Update) Malaysia Budget 2025: Key Tax Updates & Reliefs for Individuals | KTP Tax Advisory

In this video, KTP (www.ktp.com.my) dives into the major highlights of Malaysia's Budget 2025, especially focusing on updates that will impact individual taxpayers.

From new dividend tax regulations and foreign income exemptions to expanded reliefs for child and elderly care, we break down everything you need to know in simple terms.

Key Highlights Covered :

1. Dividend Tax on Individual Shareholders

A 2% tax rate on annual dividend income above RM100,000, with exemptions for certain funds like KWSP and LTAT.

2. Foreign Source Income (FSI)

Extended tax exemption on FSI received in Malaysia, as long as it’s taxed at the source country, valid until December 2036.

3. Expanded Child and Elderly Care Allowances

Up to RM3,000 exemption for child and elderly care, providing additional support for taxpayers.

4. Medical Expenses Reliefs

Expanded coverage for mental health consultations, self-test kits, diagnostic tests, and rehabilitation treatments for children with learning disabilities, with increased limits.

5. Disability Benefits

Higher relief amounts for disabled individuals and their families.

6. Reliefs on Elderly Care and Sports Activities

Expanded to include elderly care expenses and sports activities for parents and grandparents.

7. Deferred Annuity and PRS

Extended relief for deferred annuities and Private Retirement Schemes until YA 2030.

8. Education and Medical Insurance

Increased limit from RM3,000 to RM4,000 for education and medical insurance.

9. Housing Loan Interest Relief

Tiered relief for first-time home buyers, with specific conditions based on home value.

10. Electric Vehicle and Eco-Friendly Expenses

Relief for EV charging facilities and food waste composting machines to promote sustainable living.

These updates are effective from YA 2025, helping individuals and families optimize tax reliefs in areas like healthcare, elderly care, education, and environmental sustainability. Watch to stay informed and understand how Budget 2025 can impact you.

YouTube Video
Watch our Budget 2025 Webinar for Individuals on YouTube : https://youtu.be/MY9NtYHgOMU

Past Update on Budget 2025

Dividend Income : https://www.ktp.com.my/blog/2percent-tax-dividend-income-above-rm100k/17oct2024
HR : https://www.ktp.com.my/blog/malaysia-budget-2025-hr/23oct2024
Companies : https://www.ktp.com.my/blog/malaysia-budget-2025-companies/24oct2024
Individual : https://www.ktp.com.my/blog/malaysia-budget-2025-individual/25oct2024
Tax Incentives : https://www.ktp.com.my/blog/malaysia-budget-2025-new-tax-incentives/30oct2024
Indirect Tax : https://www.ktp.com.my/blog/malaysia-budget-2025-indirect-tax/1nov2024

Visit Us

Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancies in Johor Bahru for interns, graduates & experienced candidates.

Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o

#Thk

#KTP

(Tax Update) Malaysia Budget 2025 - Indirect Tax

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(Tax Update) Malaysia Budget 2025 - Indirect Tax

The recent Tax Budget 2025 introduces several key changes to indirect taxes, directly impacting businesses in Malaysia. From expanded service tax coverage to phased excise duty hikes, these updates are designed to balance economic growth with public well-being.

If you run a business or are involved in tax planning, understanding these changes is crucial for smooth compliance. Here’s a breakdown of the major changes that will come into effect in 2024 and 2025, especially those relevant to Malaysia SMEs.

1. Sales and Service Tax (SST)

Sales Tax Updates

Exemption for Basic Food Items : The government reaffirms its commitment to ensure that essential food items remain free from sales tax, minimizing the impact on the rakyat.
Higher Sales Tax for Non-Essentials : Non-essential and luxury imported items will face increased sales tax rates to curb excessive consumption.

Service Tax Expansion

New B2B Transactions Under Service Tax : A broader range of business-to-business (B2B) services will now be taxed. This change ensures better coverage of commercial activities and encourages fairness across industries.
Effective Date: 1 May 2025

2. Sales Tax Exemption for Mastectomy Bras

Supporting breast cancer patients, the government has announced a sales tax exemption for mastectomy bras.
Applicable Tax: Current 10% sales tax waived.
Application Period: Exemption applications open from 1 November 2024 to 31 December 2027, administered through the Ministry of Finance (MoF).

3. Phased Excise Duty Increase on Sugary Beverages

New Rate: RM0.40 per liter
Purpose: To promote healthier choices and curb excessive sugar consumption.
Effective Date: 1 January 2025

4. Export Duty Changes for Crude Palm Oil (CPO)

Expanded Duty Rate: From 8% to 10%
Condition: Applies when CPO market price exceeds RM3,451 per metric tonne.
Effective Date: 1 November 2024

5. Windfall Profit Levy (WPL) Threshold Increase

The government has revised the threshold price for Crude Palm Oil (CPO), aligning it with market realities.
Peninsular Malaysia: RM3,000 → RM3,150
Sabah and Sarawak: RM3,500 → RM3,650
Effective Date: 1 November 2024

6. Carbon Tax Coming in 2026

In a move toward environmental sustainability, the government has announced the introduction of a Carbon Tax targeting high-emission industries.
Industries Impacted: Iron, steel, and energy sectors.
Implementation Timeline: By 2026

Conclusion

The changes outlined in the Tax Budget 2025 are aimed at fostering sustainable growth while addressing public health and environmental concerns. As some of these measures come into effect in early 2025, businesses must act promptly to adjust their operations and tax planning strategies.

At KTP, we are committed to keeping you informed and ready for these updates. Stay ahead of these changes by visiting our blog regularly and reaching out to us for personalized tax planning services. Let’s ensure compliance and optimize your tax strategy together!

Past Update on Budget 2025

Dividend Income : https://www.ktp.com.my/blog/2percent-tax-dividend-income-above-rm100k/17oct2024
HR : https://www.ktp.com.my/blog/malaysia-budget-2025-hr/23oct2024
Companies : https://www.ktp.com.my/blog/malaysia-budget-2025-companies/24oct2024
Individual : https://www.ktp.com.my/blog/malaysia-budget-2025-individual/25oct2024
Tax Incentives : https://www.ktp.com.my/blog/malaysia-budget-2025-new-tax-incentives/30oct2024

PS : Authored by Ms Lim Nguan Lian, our head of client relationship, on her personal LinkedIn.

Visit Us

Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancies in Johor Bahru for interns, graduates & experienced candidates.

Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o

#Thk

#KTP

【税务】2025年马来西亚预算案：新的税务激励措施

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【税务】2025年马来西亚预算案：新的税务激励措施

如何利用马来西亚的新税务激励来帮助您实现现代化和扩展

您准备好利用马来西亚2025年预算中的新税务激励措施吗？政府正在推出一些计划，可以让准备采用最新技术和扩大市场的投资者和企业受益。这些措施包括为智慧物流综合体 (SLC) 提供的激励以及对提升出口能力，尤其是在集成电路 (IC) 设计方面的新福利。如果您的公司准备在物流效率上进行投资或扩大出口，这些激励措施可能就是您下一个重大的机会。

1. 智慧物流综合体 (SLC) 激励：提升供应链效率

物流激励范围从单纯的综合物流服务 (ILS) 扩展到智慧物流综合体 (SLC)，目的是通过采用先进技术来提高供应链效率。对于希望将运营带入工业4.0 (IR4.0) 时代的物流投资者和运营商来说，这是一个绝佳的机会。

根据智慧物流综合体 (SLC) 激励，符合条件的公司可以在5年内对符合条件的资本开支 (CAPEX) 申请60%的投资税务减免 (ITA)。此减免可用于抵扣每个评估年度 (YA) 高达公司法定收入 (SI) 的70%。

谁可以享受这项激励？

要符合SLC的ITA资格，以下标准适用：

SLC公司：包括参与建设智慧仓库的投资者和运营商，或那些长期租赁（至少10年）智慧仓库的运营商。
合格的物流服务：涵盖区域配送中心、综合物流服务、危险品储存和冷链物流。
仓库要求：仓库的面积至少要有30,000平方米。
工业4.0采用：公司必须采用至少三种工业4.0 (IR4.0) 技术，例如人工智能 (AI)、物联网 (IoT) 或区块链。

此激励措施适用于2025年1月1日至2027年12月31日期间马来西亚投资发展局 (MIDA) 接受的申请。对于想要将先进技术引入物流运营的企业来说，这是获得巨大税务优惠的绝好机会。

2. 提升出口激励：让马来西亚成为IC设计中心

根据新的工业主计划2030 (NIMP)，提升出口激励的范围现在扩展到覆盖集成电路 (IC) 设计服务。这旨在将马来西亚打造成为先进IC设计技术和解决方案的中心。从评估年度 (YA) 2025起生效，这项激励旨在吸引更多高科技领域的投资，与国家成为IC设计领导者的愿景相一致。

如果您的企业涉及IC设计或计划扩展到该领域，这项激励就是您加入马来西亚推动先进技术和提高全球竞争力的好机会。

准备好利用这些激励措施了吗？

这些新的税务激励不仅仅是省钱；它们是关于将您的业务定位于马来西亚技术和工业发展的前沿。如果您有兴趣充分利用这些机会，请联系KTP团队。我们随时准备帮助您处理申请流程，并最大限度地提高您的利益。

PS: 由我们客户关系总监Ms Lim Nguan Lian于其个人LinkedIn撰写。

(Tax Update) Malaysia Budget 2025 - New Tax Incentives

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(Tax Update) Malaysia Budget 2025 - New Tax Incentives

Are you ready to take advantage of Malaysia's new tax incentives under Budget 2025? The government is rolling out initiatives that can benefit investors and businesses ready to adopt the latest technologies and expand their market reach.

This includes the introduction of incentives for Smart Logistics Complex (SLC) development and new benefits for businesses that boost exports, especially in Integrated Circuit (IC) Design. If your company is ready to invest in logistics efficiency or expand exports, these incentives might be your next big opportunity.

Smart Logistics Complex (SLC) Incentive: Boosting Supply Chain Efficiency

The scope for logistics incentives has expanded from just Integrated Logistic Services (ILS) to the Smart Logistics Complex (SLC), designed to enhance supply chain efficiency by adopting advanced technology. This is a fantastic opportunity for logistics investors and operators who want to bring their operations into the age of Industry 4.0 (IR4.0).

Under the Smart Logistics Complex (SLC) incentive, qualified companies can claim an Investment Tax Allowance (ITA) of 60% on eligible Capital Expenditure (CAPEX) over a period of 5 years. This allowance can be applied against up to 70% of the company's Statutory Income (SI) for each year of assessment (YA).

Who Is Eligible for This Incentive?

To qualify for the ITA under SLC, the following criteria apply:

SLC Companies: This includes investors and operators involved in the construction of smart warehouses or those leasing these smart warehouses on long-term leases (minimum of 10 years).
Qualified Logistics Services: The services covered include regional distribution centres, integrated logistics services, storage of hazardous goods, and cold chain logistics.
Warehouse Requirements: The warehouse must have a minimum size of 30,000 square meters.
Industry 4.0 Adoption: Companies must adopt at least three Industry 4.0 (IR4.0) technologies, such as Artificial Intelligence (AI), Internet of Things (IoT), or blockchain.

This incentive is applicable for applications accepted by the Malaysian Investment Development Authority (MIDA) from 1 January 2025 to 31 December 2027.

Increased Export Incentives: Making Malaysia a Hub for IC Design

In line with the New Industrial Master Plan 2030 (NIMP), the scope for increased export incentives has now been expanded to cover Integrated Circuit (IC) Design services. This aims to establish Malaysia as a hub for advanced IC Design Technology and Solutions.

Effective from YA 2025, this incentive is designed to encourage more investments into the high-tech sector, aligning with the country’s vision to become a leader in IC Design.

If your business is into IC Design or planning to expand into this field, this incentive is your ticket to becoming part of Malaysia's push towards advanced technology and greater global competitiveness.

Need help navigating these updates? Our team at KTP is here to guide you. Feel free to contact us with any questions or for further assistance in planning your taxes.

Past Update on Budget 2025

Dividend Income : https://www.ktp.com.my/blog/2percent-tax-dividend-income-above-rm100k/17oct2024
HR : https://www.ktp.com.my/blog/malaysia-budget-2025-hr/23oct2024
Companies : https://www.ktp.com.my/blog/malaysia-budget-2025-companies/24oct2024
Individual : https://www.ktp.com.my/blog/malaysia-budget-2025-individual/25oct2024

PS : Authored by Ms Lim Nguan Lian, our head of client relationship, on her personal LinkedIn.

Visit Us

Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancies in Johor Bahru for interns, graduates & experienced candidates.

Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o

#Thk

#KTP

(Tax Update) Malaysia Budget 2025 - Individual

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(Tax Update) Malaysia Budget 2025 - Individual

The Budget 2025 has brought several changes to individual tax reliefs and exemptions, designed to support personal well-being, family care, and sustainable practices.

Let’s walk you through the highlights of what’s changing for you and how these updates might benefit your personal financial planning. From expanded childcare reliefs to foreign income exemptions, here are the key points at a glance.

1. Dividend Tax on Individual Shareholders

Tax Rate: 2% on annual dividend income exceeding RM100,000.
Exemptions: Dividends from KWSP, LTAT, ASNB, or any unit trust.
Effective: Year of Assessment (YA) 2025.

2. Foreign Source Income (FSI) Exemption

Extension: FSI received by individuals in Malaysia remains tax-exempt until 31 December 2036, as long as it is taxed in the source country.

3. Child and Elderly Care Allowance

Relief: Up to RM3,000 per year.
New Inclusion: Now extends to elderly care for parents and grandparents.
Effective: YA 2025.

4. Expanded Medical Reliefs for Families

Scope Increase: RM6,000 limit (previously RM4,000) for medical expenses and treatments, covering:
- Diagnostic tests (e.g., blood tests, ultrasounds, mammograms).
- Mental health consultations and complete medical exams.
- Self-monitoring tools (e.g., glucometers, pulse oximeters).
- Self-test kits for illnesses like influenza.
Children with Learning Disabilities: Relief increased to RM6,000, covering diagnostic and rehabilitation expenses.
Effective: YA 2025.

5. Reliefs for Disabled Individuals and Their Families

Increased Limits:
- RM7,000 (up from RM6,000) for disabled taxpayers.
- RM6,000 (up from RM5,000) for taxpayers with a disabled spouse.
- RM8,000 (up from RM6,000) for taxpayers with a disabled, unmarried child.
Effective: YA 2025.

6. Expanded Reliefs for Sports and Elderly Care

What’s New:
- Sports activities now include participation with parents.
- Vaccination costs added to complete medical examinations for parents (limited to RM1,000).
- Expenses for medical treatment and special needs now extend to grandparents.
Effective: YA 2025.

7. Deferred Annuity and PRS Relief

Extension: Available until YA 2030.

8. Education and Medical Insurance

Increased Limit: RM4,000 (previously RM3,000).
Effective: YA 2025.

9. SSPN Contributions

Extension: Tax relief continues until YA 2027, subject to new conditions.

10. Relief on Housing Loan Interest

Two-Tier Relief:
1. RM7,000 for houses priced up to RM500,000.
2. RM5,000 for houses priced between RM500,001 and RM750,000.
Conditions: Applicable to the first residential home loan, provided the house generates no rental income. The sale and purchase agreement (SPA) must be executed between 1 January 2025 and 31 December 2027.

11. Childcare Fees Relief

Limit: RM3,000 annually for fees paid to registered childcare centres or kindergartens.
Effective: YA 2025 to YA 2027.

12. Electric Vehicle Charging and Food Waste Solutions

Relief: Up to RM2,500 for EV charging facilities and newly added food waste composting machines for household use.
Effective: YA 2025 to YA 2027.

These changes reflect a more family-focused and environmentally conscious approach to individual tax planning. Make sure to take full advantage of these enhanced reliefs and exemptions in your 2025 tax filings.

Need help navigating these updates? Our team at KTP is here to guide you. Feel free to contact us with any questions or for further assistance in planning your taxes.

Past Update on Budget 2025

Dividend Income : https://www.ktp.com.my/blog/2percent-tax-dividend-income-above-rm100k/17oct2024
HR : https://www.ktp.com.my/blog/malaysia-budget-2025-hr/23oct2024
Companies : https://www.ktp.com.my/blog/malaysia-budget-2025-companies/24oct2024

PS : Authored by Ms Lim Nguan Lian, our head of client relationship, on her personal LinkedIn.

Visit Us

Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancies in Johor Bahru for interns, graduates & experienced candidates.

Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o

#Thk

#KTP

(Tax Update) Malaysia Budget 2025 - Companies (What SMEs Need to Know)

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(Tax Update) Malaysia Budget 2025 - Companies (What SMEs Need to Know)

Dear Valued Clients,

The latest tax updates offer fresh opportunities for businesses to maximize savings. If you’re planning your 2025 budget or strategizing future business expenses, this is the perfect time to explore the new and extended deductions and allowances.

Here’s a breakdown of the latest tax changes you shouldn’t miss:

1. Childcare & Elderly Care Allowance for Employees

What’s New? The current childcare allowance is now extended to cover elderly care for parents or grandparents.
When? Starting from YA 2025.

2. Smart AI-Driven Reverse Vending Machine (RVM)

What’s New? Sponsorship or contributions towards these smart recycling machines are now tax-deductible for an additional 2 years.
Effective Period: 1 January 2025 – 31 December 2026.

3. Encouraging Flexible Working Arrangements (FWA)

Additional Deduction: Enjoy 50% extra deduction on capacity-building costs and software acquisition for FWA.
How Much? Up to RM500,000, applicable as a one-off deduction.
Who Qualifies? Your application must be acknowledged by Talent Corporation Malaysia Berhad.
When to Apply: Between 1 January 2025 and 31 December 2027.

4. Care Leave for Employees

Tax Relief: Employers offering up to 12 months of additional paid leave to employees caring for sick or disabled family members will enjoy 50% additional deduction.
When to Apply: Submit applications to Talent Corporation Malaysia Berhad from 1 January 2025 to 31 December 2027.

5. Hiring Women Returning to Work

Incentive: A 50% additional deduction on employment costs for hiring women re-entering the workforce.
Eligibility Period: 12 months.
When to Apply: Applications open from 1 January 2025 to 31 December 2027 via Talent Corporation Malaysia Berhad.

6. Developing New Courses at Private Educational Institutions

Faster Deduction: Now you can deduct the full cost of developing new courses in the same year of assessment, instead of spreading it over 3 years.
Who Benefits? Private education institutions and TVET training institutes.
When? Effective from YA 2025 until YA 2030.

7. Accelerated Capital Allowance (ACA) for ICT Investments

Shorter Deduction Period: You can now claim ACA over 2 years instead of 3.
Allowances: 20% Initial Allowance (IA) and 40% Annual Allowance (AA).
When?
- YA 2024 to YA 2025
- YA 2025 to YA 2027

These incentives reflect the government’s support for sustainable business practices, inclusive hiring, and workplace flexibility. We encourage you to plan ahead to take advantage of these savings and apply on time where necessary.

If you need further guidance on how these incentives could benefit your business or help with TalentCorp applications, our team is ready to assist. Contact us today to start planning your tax strategy for 2025.

Past Update on Budget 2025

Dividend Income : https://www.ktp.com.my/blog/2percent-tax-dividend-income-above-rm100k/17oct2024
HR : https://www.ktp.com.my/blog/malaysia-budget-2025-hr/23oct2024

PS : Authored by Ms Lim Nguan Lian, our head of client relationship, on her personal LinkedIn.

Best regards
KTP Team
www.ktp.com.my

Visit Us

Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancies in Johor Bahru for interns, graduates & experienced candidates.

Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o

#Thk

#KTP

(Tax Update) Malaysia Budget 2025 - HR

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(Tax Update) Malaysia Budget 2025 - HR

The 2025 Budget introduces several key changes that encourage inclusivity and employee support. However, businesses will need to assess whether these reforms align with their financial capacity and long-term strategy.

While the incentives aim to foster positive workplace policies, they may also increase labor costs and affect hiring decisions.

Below is a summary of these changes, along with my perspective on their practical impact.

Expanded Tax Relief for Caregiving
Employers will now enjoy expanded tax deductions on allowances provided not just for childcare but also for elderly care. Individual tax relief of up to RM3,000 will apply to such allowances, helping employees support aging family members.

While this initiative promotes work-life balance, some businesses might hesitate to implement it broadly due to concerns about the associated administrative burden and the limited financial relief it offers.

Raising the Minimum Wage
From 1 February 2025, the minimum wage will increase to RM1,700 per month, with a grace period until 1 August 2025 for businesses employing fewer than five people. This move will improve living standards but could put financial strain on smaller businesses, particularly in sectors with tight profit margins.

Companies need to plan ahead to accommodate these wage hikes without compromising operational efficiency.

Flexible Work Arrangements
Employers investing in flexible work models will receive a 50% tax deduction on relevant expenses, capped at RM500,000 in a single claim.

This incentive encourages businesses to modernize their work culture, though smaller firms may find the initial investment in software and training a significant barrier to entry.

Support for Caregiver Leave
A 50% tax deduction will apply to employers offering extended paid leave—up to 12 months—for employees caring for children or family members with disabilities.

While this promotes employee wellbeing, it may create workforce management challenges for smaller teams, especially in industries reliant on consistent staffing levels.

Hiring Women Returning to Work
Employers hiring women after a two-year career break will qualify for a 50% tax deduction for 12 months.

This initiative aims to promote gender diversity, but businesses must be ready to invest in re-skilling programs to ensure smooth reintegration into the workforce.

EPF Changes for Foreign Workers
Mandatory EPF contributions will apply to new foreign workers, with gradual increases for existing foreign employees until their rates match those of locals.

While this promotes fair employment practices, companies relying on foreign labor will need to manage higher costs strategically.

SOCSO Incentives for Vulnerable Groups
Employers hiring individuals with disabilities or former convicts will receive RM600 per month for three months under SOCSO.

This initiative encourages inclusive hiring, but businesses must ensure proper workplace support to accommodate these employees effectively.

HRD Corp Allocation for Skills Development
The increased allocation for HRD Corp will enhance skill training programs, offering businesses more opportunities to upskill their workforce.

Employers should actively leverage these resources to remain competitive in an evolving market.

In conclusion, while these reforms open doors to more inclusive policies, they also require careful financial planning. For many businesses, the long-term costs of adopting these changes may outweigh the short-term incentives, raising questions about their overall sustainability.

Visit Us

Wisma KTP, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma THK, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

KTP Lifestyle

An internal community for our colleagues on work and leisure.

KTP Career

An external job community on vacancies in Johor Bahru for interns, graduates & experienced candidates.

Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o

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(Tax Update) Dividend Income in Malaysia: What Changed and What It Means for You

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(Tax Update) Dividend Income in Malaysia: What Changed and What It Means for You

New Dividend Tax Structure

Example:
If you receive RM120,000 in dividends, only RM20,000 will be subject to the 2% tax, resulting in RM400 in additional tax.

Although the Prime Minister mentioned that this tax would be introduced “progressively,” it’s not yet clear if this means different tax rates for higher amounts or whether the 2% rate will apply uniformly.

Pre-2008: The Imputation System – A Taxpayer’s Sweet Deal

Before 2008, Malaysia operated under an imputation system. Companies paid corporate tax on their profits, and when dividends were distributed, shareholders received tax credits for the tax already paid by the company.

Example:
If Company A paid 24% corporate tax and distributed RM1,000 in dividends to you, the corporate tax was credited against your personal tax. If your personal tax rate was 15%, you got a refund on the excess tax paid.

2008 Onwards: Introduction of the Single-Tier Tax System

In 2008, Malaysia adopted the single-tier tax system, simplifying dividend taxation. Under this system, companies continued to pay corporate tax, but shareholders no longer received tax credits. However, dividends were fully exempted from personal income tax.

Example:
You received RM1,000 in dividends from Company B in 2015, and the entire amount was tax-free, with no further tax obligations on your end.

2025 Onwards: A New 2% Dividend Tax for High Earners

From 2025, a new 2% tax will apply to the portion of dividend income exceeding RM100,000. This change aims to target high-income earners.

Example:
If your total dividend income for the year is RM150,000, you will be taxed 2% on the RM50,000 exceeding the RM100,000 threshold. That translates to RM1,000 in additional tax.

Double Taxation: A Concern for Entrepreneurs and Investors

A key concern is the issue of double taxation. Malaysian companies already pay 24% corporate tax on their net profits before distributing dividends. With dividends currently tax-free for shareholders, the practice has been perceived as fair.

However, the new 2% dividend tax introduces an extra layer of taxation, particularly affecting high-income individuals.

Impact on Competitiveness:
This tax may make Malaysia less attractive to entrepreneurs and investors. When compared with countries offering lower corporate tax rates or tax-free dividends, Malaysian companies could appear less competitive. Entrepreneurs may be inclined to relocate their operations or explore jurisdictions with more tax-efficient regimes.

Conclusion

While the new dividend tax aims to boost government revenue, it raises concerns about double taxation and could affect Malaysia’s attractiveness to individual entrepreneurs and investors. As the rules take effect in 2025, it’s crucial to stay updated and explore tax planning strategies to manage these changes efficiently.

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An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

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(Tax Update) New e-Invoicing Rules in Malaysia: Are You Ready?

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(Tax Update) New e-Invoicing Rules in Malaysia: Are You Ready?

The Malaysian government has introduced the Income Tax (Issuance of Electronic Invoice) Rules 2024, published on 30 September 2024, and effective from 1 October 2024. Here’s everything you need to know to stay ahead in the game.

1. Purpose of the Rules

These new rules establish the legal framework and requirements for electronic invoicing (e-invoicing) in Malaysia, ensuring businesses transition smoothly into the digital tax era.

2. Implementation Timeline

Key dates for businesses based on their annual sales:

Over RM100 million: Implementation starts 1 October 2024
Between RM25 million – RM100 million: 1 January 2025
Below RM25 million: 1 July 2025

3. How to Determine Annual Sales

Based on the 2022 financial year audited statements or tax returns.
If there was a change in the accounting period in 2022, a specific formula must be used.

4. E-Invoice Requirements

The rules outline mandatory and optional fields for e-invoices:

Mandatory Details:
- Seller and Buyer Information
- Invoice Number and Date
- Product/Service Description and Quantity
- Tax-related Information
Optional Details: Payment information or other buyer-seller-specific data.

5. Who is Exempted?

The following are not required to issue e-invoices:

Foreign diplomatic offices
Individuals not engaged in business
Certain transactions by statutory bodies, local authorities, and international organizations until 1 July 2025.

6. Special Provisions to Note

Businesses involved in import/export must follow additional e-invoicing requirements.
If your company had a change in the financial year during 2022, you must adjust annual sales calculations accordingly.

7. Key Takeaways – Important Update on Timeline Discrepancy

The Income Tax (Issuance of Electronic Invoice) Rules 2024 (P.U. (A) 265) differ slightly from earlier e-invoicing guidelines:

Previous Guideline: Start date for businesses with over RM100 million annual sales was 1 August 2024.
Official Rules: Now set the start date as 1 October 2024.

What This Means for Business :

Legally Binding Date: 1 October 2024 is the official deadline.
Additional Time: Businesses in the first batch now have two extra months (August and September) to fine-tune their e-invoice systems.
Action Required:
- Use this time to ensure compliance with all mandatory e-invoice requirements.
- Review internal systems and processes to avoid non-compliance penalties.

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Unlocking Opportunities in the Forest City Special Financial Zone (FCSFZ)

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(Tax Update) Unlocking Opportunities in the Forest City Special Financial Zone (FCSFZ)

The Rise of a New Financial Hub in Johor

In a major boost to Malaysia's financial landscape, the Forest City Special Financial Zone (FCSFZ) has officially been introduced, offering an exciting array of incentives for businesses and individuals. Positioned on Pulau Satu, just off the coast of Johor, the FCSFZ aims to attract both local and global investors, making it a prime destination for financial services, technology, and high-end business operations.

If you're considering expanding or establishing your operations, this might just be the opportunity you've been waiting for.

What is the FCSFZ?

The FCSFZ is a newly established special financial zone located within Forest City, a large-scale development between Malaysia and Singapore. This zone, aimed at turning the region into a business hub, provides significant tax and regulatory incentives.

On 25 September 2024, the amendments to various financial regulations were gazetted, solidifying its status as a duty-free area. With the Malaysian government behind it, FCSFZ promises to be a game-changer in attracting foreign investment and boosting local economic growth.

Key Incentives and Benefits

Here’s a quick breakdown of what makes the FCSFZ attractive:

0% to 5% Corporate Tax Rate: Companies operating in global financial services, fintech, and other eligible sectors can enjoy corporate tax rates as low as 0%. This presents a significant opportunity for businesses looking to maximize their earnings.
15% Income Tax for Knowledge Workers: If you're a professional in the knowledge sector, you can take advantage of a flat 15% income tax rate, a major incentive compared to regular rates in Malaysia.
SFO Scheme for Wealthy Families: The Single-Family Office (SFO) Scheme allows family offices to benefit from a 0% tax rate on eligible investments for up to 20 years. This scheme is designed for wealthy families to manage their investments while operating from Pulau Satu in Forest City.
Special Financial Services Incentives: Banking institutions, insurance companies, and capital market intermediaries can benefit from additional deductions and exemptions. For example, there are special deductions on relocation costs and enhanced allowances for industrial buildings.

Single-Family Office (SFO) Scheme Requirements :

Establish a Family Office and Family Office Vehicle (SFOV): A Single-Family Office (SFO) and its related entity, the Single-Family Office Vehicle (SFOV), must be set up to manage family investments.
Location: Both the SFO and SFOV must establish and operate out of Pulau Satu within the FCSFZ.
Pre-Registration with Securities Commission (SC): The SFOV must be pre-registered with the SC to be eligible for the tax incentives.
Physical Office and Staffing Requirements: At least one investment professional with a minimum salary of RM10,000 must be employed.
Minimum Asset Under Management (AUM): The SFOV must manage a minimum AUM of RM30 million for the first 10 years, increasing to RM50 million for the extended 10-year period.
Local Investment Requirement: A minimum of 10% of the AUM or RM10 million must be invested locally.
Annual Operating Expenditure: The SFOV must incur a minimum local operating expenditure of RM500,000 in the initial period, which increases to RM650,000 in the extended period.

Strategic Location and Future Growth

Located strategically close to Singapore, the FCSFZ provides easy access to one of the world’s busiest financial hubs. This proximity not only enhances business connectivity but also offers firms in the zone a unique advantage—operating in a low-cost jurisdiction while enjoying access to global markets.

Is the FCSFZ Right for You?

If you're in sectors like fintech, financial services, or if you’re looking to establish a family office, the FCSFZ offers a wealth of opportunities. The incentives alone could provide substantial tax savings and operational flexibility, allowing businesses to thrive in this burgeoning hub.

Whether you're an entrepreneur, an investor, or a corporate leader, this is the time to explore the potential of this new financial zone.

Conclusion

The Forest City Special Financial Zone represents a fresh chapter in Malaysia's economic development. With its generous incentives and prime location, it’s a must-consider for businesses aiming to expand or relocate their operations.

If you're interested in learning more about how the FCSFZ can benefit you or your business, feel free to reach out to our KTP team. We’re here to guide you through the process and help you seize these opportunities.

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KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

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A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

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(Tax Update) GST 2.0 Is Coming?

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(Tax Update) GST 2.0 Is Coming?

According to Nanyang Siang Pau, the government is preparing to reintroduce GST (Goods and Services Tax) in the 2025 Budget, with the mechanism and exemption list already finalized, ready for announcement.

The implementation is expected by 2026 to help improve the country’s financial position ahead of the 2027 general election.

Early market suggestions indicate a proposed 4% rate.

When the Goods and Services Tax (GST) 1.0 was introduced in Malaysia, there was a widespread belief that auditors and tax agents were the biggest winners.

Many are now echoing the same sentiment with the talks of GST 2.0.

But let me tell you, as someone who has been through GST 1.0 – this couldn’t be further from the truth.

Firstly, GST 1.0 was highly politicized.

While it was meant to create a more transparent taxation system, it faced challenges, especially around reimbursement delays for tax credits.

Businesses had to wait for months to receive their rightful claims, causing cash flow issues for many.

Secondly, let’s compare GST and SST. Under the Sales and Services Tax (SST), businesses only pay tax at the end of the supply chain, whereas GST taxes each stage of the supply chain.

Yes, GST allows input tax credits, but these credits are only useful if they are reimbursed promptly. The delays we faced during GST 1.0 caused more headaches

Let me set the record straight—we’re just trying to help businesses navigate these complex systems while ensuring compliance.

PS : Authored by Mr Koh Teck Peng, the Group Principal, in his personal LinkedIn post https://bit.ly/4ezf81g

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An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

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A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

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(Tax Update) Socso Salary Ceiling Raised to RM6,000—What Employers Need to Know

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(Tax Update) Socso Salary Ceiling Raised to RM6,000—What Employers Need to Know

Effective October 1, 2024, the Social Security Organisation (Socso) in Malaysia will increase the insured salary ceiling from RM5,000 to RM6,000. This change, introduced through amendments to the Employees' Social Security Act 1969 and the Employment Insurance System Act 2017, is part of the government's efforts to enhance social protection for employees.

What Does This Mean for Employers?

The increase in the salary ceiling directly impacts employer contributions, especially for those with employees earning between RM5,000 and RM6,000 per month. As of October 1, 2024, employers will need to adjust their payroll systems to comply with the new contribution rates.

Here’s a breakdown of the changes:

Impact on Employer Contributions:

Higher contributions

Employers will need to contribute more for employees whose salaries fall between the new RM5,000 and RM6,000 threshold.

Expanded coverage

This adjustment affects both local and foreign workers, impacting around 1.5 million employees or 15.5% of Socso contributors nationwide.

Immediate compliance

Employers must start making contributions according to the new salary ceiling from October 1, 2024.

Employer Responsibilities:

Update payroll systems

Employers are required to ensure their payroll systems reflect the new contribution rates for affected employees.

Maintain accurate records

Contributions must be clearly reflected in employees’ pay statements for compliance and audit purposes.

Adhere to regulations

Non-compliance could result in penalties or legal consequences, making it crucial to follow the updated rules from the start.

Benefits and Implications for Employers and Employees:

Enhanced employee benefits

Employees earning above RM5,000 will benefit from improved disability, pension, and job search allowances, with up to a 20.2% increase in interest payments.

Strengthened social protection

This move will enhance overall social protection under the Employee Social Security Act and the Employment Insurance System Act, providing workers with better security.

Cost implications for employers

While this reform benefits employees, employers—especially SMEs—should be prepared for higher contribution costs, which may impact their operational budgets.

Conclusion

Although the increased salary ceiling means higher contributions for employers, it is a step towards strengthening the nation's labor market and ensuring better social protection for workers. Employers must act now to update their payroll systems, keep accurate records, and ensure compliance to avoid penalties.

This change presents both opportunities and challenges for businesses, but it ultimately aligns with the government's broader aim to improve the social safety net for all workers in Malaysia.

We look forward to helping you navigate these changes smoothly.

Warm regards,

KTP Team

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KTP (Audit, Tax, Advisory)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

THK (Secretarial, Bookkeeping, Payroll, Advisory)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsourcing bookkeeping, and payroll services to clients

Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs

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