Taxes - Accounting

Malaysia

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Tax Rates | Accounting Rules

Tax Rates

Consumption taxes

Nature of the tax: Sales tax and services tax.
Tax rate: Sales tax is due on taxable goods manufactured or imported by any natural person or legal entity. The present rates of this tax are 5% (non essential food, building materials for exemple) and 10% (normal general rate).
Reduced tax rate: Sales tax exemption for bus operators on purchase of locally assembled buses. Sales tax exemption on solar system equipment system for usage by third parties be given to importers.

Corporate taxes

Tax rate

Corporate tax standard rate	25%
Corporate tax rate for resident small and medium-sized entreprises (with capitalisation under MYR 2.5 million)	20% on the first MYR 500,000 then 25%

Tax rate for foreign companies

Sales tax apply to non-residents.

Capital gains taxation

The tax rate on company profits is 25%.

Main allowable deductions and tax credit

The tax on SMEs is 20% on taxable profits up to 500 000 MYR, the balance being taxed at 26%. Only the deduction of spending carried out totally and exclusively in connection with profits is authorized. Losses can be deducted whatever the source for the same financial year: revenue from exploitation, dividends, holdings etc. They can be carried forward indefinitely to be deducted later.

Other corporate taxes

Companies carrying out activities upstream of the petroleum industry are taxed at 38% (petrol income tax).

Excise duties are levied on selected products manufactured in Malaysia, namely cigarettes, tobacco products, alcoholic beverages, playing cards, mahjong tiles and motor vehicles.

Individual taxes

Tax rate

Individual income tax	Progressive rates from 0% to 26%
Up to RM 2,500	0%
RM 2,501 - 5000	1%
RM 5001 - 20 000	3%
RM 20,001 - 35,000	7%
RM 35,000 - 50,000	12%
RM 50,000 - 70,000	19%
RM 70,000 - 100,000	24%
RM 150 000 and over	26%

Allowable deductions and tax credit: Deductions attributed to taxpayers in Malaysia are the following:
-Annual personal fixed deductions of 5,000 ringgits.
-Deductions by couple of 3,000 ringgits.
-Deductions for single people of 800 ringgits
-Deduction of 110 ringgits for incomes equal or under 10,000 ringgits.
Non-residents do not have access to these tax deduction allowances in Malaysia. However the non-residents citizens in Malaysia have their own deductions and reductions.
Special expatriate tax regime: Expatriates posted to an OHQ (operational headquarters) or a representative office are only taxed on the part of their income attributable to the days they spend in Malaysia.

Double taxation treaties

Countries with whom a double taxation treaty have been signed: See the list of the conventions signed on the website of the Ministry of Taxation.
Withholding taxes: Dividends: 0%, Interest: 15%, Royalties: 10%
Bilateral agreement: Malaysia and Tunisia are bound by a double taxation treaty: no

Signed	Ratified	Enforced

Pour aller plus loin dans vos recherches nous vous proposons de connaître les taxes locales connaître les taxes locales qui s'appliquent à votre produit.

Sources of fiscal information

Tax Authorities: Malaysian Customs; Inland Revenue Board
Other domestic resources: Malaysian Industrial Development Authority

Accounting Rules

Tax year: The tax year begins on January 1 and ends on December 31 of the same year.
Accounting standards: Public companies listed on the Stock Exchange have adopted FSR standards (Financial Reporting Standards), and the others the PERS standards (Private Entity Reporting Standards).
Accounting regulation bodies: Malaysian Accounting Standards Board
Accountant General's Department of Malaysia
Accounting reports: Financial statements must include notes and policies, and they are composed of four declarations which appear in the annual report: a declaration of income, a balance sheet, cash flows, the movement of stocks.
Publication requirements: According to the law all companies have to publish the following recordings : shareholders' details, details concerning the members of the board of directors, details concerning the expense account and the debt accounts of the company.
Public companies have also to publish their statutory accounts to the shareholders during the annual meeting.
Professional accountancy bodies: Malaysian Institute of Accountants
MICPA
Certification and auditing: Independent accountants must analyze the financial statements of public companies. For additional information.
Accounting news: Accountants Today website from the Malaysian Institute of Accountant