Malaysia Proposes 2014 Budget Update from Nair & Co. International Tax Team (Bristol, UK) - The Government of Malaysia has presented its budget for 2014 proposing replacement of Sales and Service tax with a Goods and Services Tax (GST). If passed, the GST will be effective from 1 April 2015 and will impose a standard rate of 6% with 0% on some goods and services. Certain exemptions may also apply. Other proposed provisions of the budget include:
Reduction of about 1 – 2% in income tax rates for co-operatives on taxable income over RM 150,000.
A decrease in tax rates in various slabs for individuals by 1-3%. 100% accelerated capital allowance being extended to information technology and communication. Higher deductions for hiring related expenses including work-place benefits, salaries and certain types of training. Income tax rates for companies, limited liability partnerships, trusts and estates of individuals domiciled abroad at the time of their death being reduced by about 1%.
Deadline to apply for income tax incentives in case of certain investments being extended to the end of 2016. New “real property gains tax” for Malaysian citizens/permanent residents as well as for companies and foreigners at 0 - 30% and 5 - 30%, respectively.
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