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MALAYSIA TAX BUDGET 2010: TOP PERSONAL TAX RATE REDUCED BY 1%

slang — Wed, 28 Oct 2009 10:39:39 +0000

Beginning from year of assessment 2010, under the proposed legislation, the top personal tax rate has reduced by 1% (i.e. from 27% in YA 2009 to 26% effective from YA 2010). This means that, in respect of chargeable income above RM100,000, for every RM1,000 a person earns, he will be paying RM10 less in taxes.

Related posts:MALAYSIA TAX BUDGET 2010: PERSONAL INCOME TAX INCENTIVES FOR THOSE WORKING IN THE ISKANDAR REGION. MALAYSIA TAX BUDGET 2010: PERSONAL TAX INCENTIVE FOR BROADBAND EXPENSES MALAYSIA TAX BUDGET 2010: EXPENSES INCURRED ON THE REGISTRATION OF TRADEMARKS IN MALAYSIA WILL BE ALLOWED AS TAX DEDUCTION FOR PURPOSES OF INCOME TAX COMPUTATION. MALAYSIA TAX BUDGET 2010: ENHANCED TAX INCENTIVES FOR HEALTHCARE COMPANY. MALAYSIA TAX BUDGET 2010 BUSINESS HIGHLIGHTS MALAYSIA TAX BUDGET 2010: TAX INCENTIVE IN RELATION TO THE GREEN BUILDING INDEX (GBI) MALAYSIA TAX BUDGET 2010: EXEMPTION FROM STAMP DUTY ON THE PURCHASE OF BUILDING THAT INCORPORATE WITH “GREEN TECHNOLOGY”

MALAYSIA TAX BUDGET 2010: PERSONAL TAX INCENTIVE FOR BROADBAND EXPENSES

slang — Wed, 28 Oct 2009 10:38:16 +0000

An individual can claim a maximum of RM500 of the monthly Internet broadband bills issued under his name in his tax return.

In the current self-assessment taxation system, he will be required to maintain receipts for such expenses paid for up to seven years in the event of an audit by the Inland Revenue Board.

In the event that the broadband expense was reimbursed by the employer, this is an exempt employment income hence not taxable on the employee income. Therefore he is not eligible to claim the tax relief in his annual personal tax return.

MALAYSIA TAX BUDGET 2010: ENHANCED TAX INCENTIVES FOR HEALTHCARE COMPANY.

slang — Wed, 28 Oct 2009 10:36:53 +0000

It is proposed that 100% of the value of increase in exports would be exempted from tax in respect of services provided to foreign clients in Malaysia. The value of the increase in exports is taken to mean the difference of the value of the qualifying services exported in the current period and that of the immediately preceding period.

For the purpose of this incentive, foreign clients are defined as:

i) a company, partnership, an organisation or a cooperative society incorporated or registered outside Malaysia;

ii) non-Malaysian citizens who do not hold Malaysian work permits; or

iii) Malaysian citizens who are considered as non-residents living abroad.

The proposal is effective for a five-year period from 2010 to 2014.

MALAYSIA TAX BUDGET 2010: TAX INCENTIVE IN RELATION TO THE GREEN BUILDING INDEX (GBI)

slang — Tue, 27 Oct 2009 15:30:55 +0000

Green Building Index was developed by Pertubuhan Akitek Malaysia and the Association of Consulting Engineers Malaysia. It was launched on May 21, 2009

Under the GBI assessment framework:

points will be awarded for achieving and incorporating environment-friendly features which are above current industry practice.
Two different sets of GBIs have been developed for both commercial and residential properties.
The assessment criteria include:

(a) Energy and water efficiency

(b) Indoor environmental quality

(d) Usage recyclable and environment friendly materials and resources

(e) Adoption of new technologies

As a measure to encourage the construction of buildings using green technology, it is proposed that the owners of buildings awarded the GBI certificate be given exemption equivalent to 100% of the additional capital expenditure incurred to obtain the GBI certificate.

This incentive is applicable on new buildings and upgrading of existing buildings.

The proposal is effective for buildings awarded with GBI certificate from Oct 24, 2009 until Dec 31, 2014.

Further details on GBI can be viewed at http://www.greenbuildingindex.org.

MALAYSIA TAX BUDGET 2010: EXEMPTION FROM STAMP DUTY ON THE PURCHASE OF BUILDING THAT INCORPORATE WITH “GREEN TECHNOLOGY”

slang — Tue, 27 Oct 2009 15:29:20 +0000

In the Budget 2010, stamp duty exemption would be available for buyers of buildings and residential properties that have been issued a Green Building Index (GBI) certificate.

Details:

The GBI is a rating index for environmentally-friendly buildings.
The stamp duty exemption would only apply to buildings or residential properties bought directly from real property developers and the exemption is only given once to the first owner of the building.
It may not apply to existing buildings that have subsequently been granted the GBI certificate.
The amount of the stamp duty exemption is given only on the additional cost incurred by the property developer to obtain the GBI certificate, and not on the full value of the building.
The exemption will apply for sales and purchases agreements executed from Oct 24 2009 until Dec 31, 2014.

MALAYSIA TAX BUDGET 2010: EXPENSES INCURRED ON THE REGISTRATION OF TRADEMARKS IN MALAYSIA WILL BE ALLOWED AS TAX DEDUCTION FOR PURPOSES OF INCOME TAX COMPUTATION.

slang — Tue, 27 Oct 2009 15:27:37 +0000

The proposed tax deduction on the expenses incurred on the registration of trademarks will only apply to companies which have a paid-up capital in respect of ordinary shares of RM2.5mil and less at the beginning of the taxable period.

Details:

The company should not be related to a company which has a paid-up capital in respect of ordinary shares of more that RM2.5mil at the beginning of the taxable period.
In addition, the company should not have full-time employees exceeding 150 persons nor annual sales turnover exceeding RM25mil respectively.
The registration expenses include fees or payments made to trademark agents registered under the Trade Marks Act 1976.
This deduction is essentially targeted for small and medium enterprises. This proposal is effective from Year of Assessment 2010 to 2014.

MALAYSIA TAX BUDGET 2010: PERSONAL INCOME TAX INCENTIVES FOR THOSE WORKING IN THE ISKANDAR REGION.

slang — Tue, 27 Oct 2009 15:24:53 +0000

If a person apply and commence his or her employment in Iskandar Malaysia between Oct 24, 2009 and Dec 31, 2015, provided that he or she is qualify as a Malaysian tax resident, his/her employment income will be taxed at the flat rate of 15%.

This could be substantially lower compared to the effective tax rate of a Malaysian tax resident.

MALAYSIA TAX BUDGET 2010 BUSINESS HIGHLIGHTS

slang — Mon, 26 Oct 2009 09:16:40 +0000

The following is 2010 Budget Highlights in brief:

Malaysian Economy:

Malaysia economy to grow 2-3 per cent in 2010
Mining to grow 1.1 per cent, manufacturing sector 1.7 per cent, agriculture 2.5 per cent, construction 3.2 per cent and service 3.6 per cent.
Private consumption expand 2.9 per cent while private investment 3.4 per centPer capita income to increase by 2.5 per cent to RM24,661
Government to allocate RM899 million to intensify tourism industry.
Government to enhance tax incentives for healthcare service providers who offer services to foreign health tourists with income tax exemptions of 100 per cent on the value of increased exports from 50 per cent previously.
TNB to spend RM5 billion to implement electricity generation, transmission and distribution projects in 2010.
Public-private collaborations to include an integrated immigration, customs and quarantine complex in Bukit Kayu Hitam, construction of six UiTM campuses and the development of MATRADE centre
1Malaysia Development Bhd (1MDB) will establish a corporate social responsibility fund totalling RM100 million as a start to finance community activities
RM14.8 billion is allocated to manage, build and upgrade hospitals and clinics
Government allocates RM2.3 billion to build and upgrade infrastructures in rural areas.
Government provides RM41 million to improve income and quality of life of the Orang Asli Community by implementing various projects.
Budget 2010 allocations totalled RM191.5 billion, of which RM138.3 billion is for operating expenditure and RM53.2 billion for development expenditure.
Federal Government revenue in 2010 to decline by 8.4 per cent to RM148.8 billion.
Budget deficit at 5.6 per cent of GDP compared with 7.4 per cent in 2009

Tax Impact on Individual Taxpayer:

Maximum income tax rate to be further reduced to 26 per cent from 27 per cent effective from the 2010 year of assessment.
Personal tax relief will be increased to RM9,000 from RM8,000 effective from the 2010 year of assessment.
Existing personal tax relief of RM6,000 for EPF contributions and life insurance premiums be raised to RM7,000.
Income tax on Employment income of Malaysians and foreign knowledge workers residing and working in Iskandar Malaysia be imposed at 15 per cent compared with the maximum 26 per cent for the rest of the country.
Tax relief on broadband subscription fee for individual taxpayer up to RM500 a year from 2010 to 2012
Civil servants are eligible to apply for computer loans once in every three years and up to a maximum of RM5,000 from the government once in every five years
The Government will issue 1Malaysia Sukuk totalling RM3 billion.
The Government will establish the 1Malaysia Retirement Scheme to be administrated by EPF.
In January 2010 an EPF scheme that enables EPF contributors to utilise current and future savings in Account 2 to promote house ownership.
Employees EPF contributions will be raised again to 11 per cent on a voluntary basis with immediate effect. However, from Jan 1, 2011 employees’ EPF contribution will revert to 11 per cent.
Real Property Gain tax of five(5%) per cent be imposed on gains from the disposal of real property from 1 January 2010. This applies all which includes individual and corporation.

Others:

Maximum tax rate for cooperatives will be reduced to 26 per cent while the fixed tax rate for non-resident individuals will be cut to 26 per cent.
Allow 100 per cent foreign equity participation in corporate finance and financial planning companies compared with the present requirement of at least 30 per cent local shareholding.
The government is currently at the final stage of completing the study on the implementation of goods and services tax (GST), particularly to identify the social impact of GST on the people. The purpose of this study is to ensure that if GST needs to be implemented to stabilised Government finance, it will not burden the population. If the government implements GST, it will replace the current sales tax and service tax as well as exemption will be granted to the low income group. The GST rate to be imposed will be lower than the current sales tax and service tax rates.
Formulate Halal Act in collaboration with State Islamic Religious Councils.
To corporatise the Halal Industry Development Corporation as an agency under MITI
Intensify Halal Certification by the Islamic Development Department of Malaysia (JAKIM) by collaborating with international institutions to obtain standards certification such as HACCP ad GMP.
To provide RM24 million to develop halal products anti-smuggling system at three entry points and three main ports.
Allocate RM137 million to upgrade and improve drainage and irrigation infrastructures in paddy fields involving 180,000 farmers.
To provide RM70 million to build the Paya Peda Dam Project in Terengganu to increase water supply capacity to paddy irrigation scheme in Besut.
Allocate RM82 million to modernise aquaculture industry and conduct entrepreneurship training scheme for aquaculture breeders with focus on production of fish fry and ornamental fish.
The stock market will be further liberalised to enhance its efficiency as well as attract domestic and foreign investment. For this purpose, the government will undertake the following measures: First, liberalise the commission sharing arrangements between stockbrokers and remisiers in 2 stages to encourage retail participation in the stock market. The first stage, which takes effect immediately, allows flexible brokerage sharing at a minimum rate of 40 percent for remisiers. The commission sharing will be fully liberalised in the second stage, effective 1 January 2011.
Islamic banking assets account for 18.8 per cent of Malaysia’s total banking assets while takaful industry assets contribute 7.7 per cent of total insurance and takaful industry assets. To ensure rapid development of financial services, particulalrly in Islamic finance, the government proposes that the existing tax incentives be extended to 2015.
Effective Jan 1 2010, government agrees to allow agencies to retain 50 per cent of rentals received while the remaining 50 per cent will be remitted to the government as revenue.
The Government will implement fuel subsidy management system in early 2010.

New Appointments, Chairman And CEO in Ekuinas

slang — Fri, 07 Aug 2009 05:40:33 +0000

Reported in the Star, the following were appointed to Ekuinas which is the newly set up private equity investment institution aimed at promoting effective bumiputra economic participation:-

Ex-PWC executive chairman, Raja Tan Sri Arshad Raja Tun Uda as chairman
Media Prima Bhd outgoing group MD/CEO Abdul Rahman Ahmad as CEO and director
Both appointments take placed with effect on September 1^st

The founding members of Ekuinas board of directors are:

Symphony House Bhd Group CEO and ex-MD of Pengurusan Danaharta Nasional Bhd, Datuk Azman Yahya
Institute of Strategic and International Studies Malaysia chairman and CEO Tan Sri Mohamed Jawhar Hassan
Economic Planning Unit director general Datuk Noriyah Ahmad

About Ekuinas:

Was established subsequent to Prime Minister’s announcement on June 30 as part of a number of measures to enhance the competitiveness of the Malaysian economy whilst maintaining the government’s commitment toward promoting sustainable, meaningful and effective bumiputra participation through genuine partnerships and meritocracy
Ekuimas will manage an initial fund of Rm500m which subsequently be enlarged to Rm10billion
It will be commercially driven with investments focused on strong Malaysian companies with high growth potential and will work towards attracting and nurturing talent for management in investee companies
It will also collaborate with private capital and adopt best practices of global private equity firms.

It’s definitely a booster for the stock market with the participation from this to be Rm10billion private equity government institution.

Malaysia Foreign Investment Committee Disbanded on 30 th June 2009

slang — Thu, 30 Jul 2009 12:09:13 +0000

For those who are involved with corporate restructuring and other, it is noteworthy to note that our Malaysian Foreign Investment Committee(FIC) which was previously in charge of ensuring the 30% bumiputra quota shareholding requirement in listed companies and property transfer,etc has been officially disbanded on 30 th June 2009. This was announced by our Prime Minister, Dato Seri Najib Razak.

Moving forward, a new department set up at the Economic Planning Unit(EPU) would replace the FIC and would only process transactions involving:

the dilution of bumiputra interests and/or

Government interests in properties valued at RM20mil and above, whether bought directly or indirectly through acquisition of companies owning properties.All other property transactions would no longer require the approval of FIC.However, foreign investors cannot acquire properties below specified threshold limits, with the threshold amount for commercial properties at RM500,000. For the purchase of residential properties, the present threshold of RM250,000 is maintained until the end of 2009, with the threshold increased to RM500,000 effective of Jan 1, 2010.

Companies will still have to comply with Securities Commission’s 25% public spread requirement at the initial public offering (IPO) stage, of which half must be offered to bumiputras, this would be waived if there were insufficient bumiputra investors to buy the shares. This means that effectively, the bumiputra equity ownership requirement has been reduced to 12.5% at the IPO stage. There will no longer be any equity conditions imposed on companies post IPO, except in the case of reverse takeovers and backdoor listings