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Tax Guide Malaysia

Tax Guide Malaysia

Personal Income Taxation in Malaysia

All individuals, regardless of their tax residency status in Malaysia are taxed on income that is accrued in or derived from within the periphery of Malaysia.

Personal Income Tax Rates in Malaysia

The following tax rates are levied on Personal Income in Malaysia:

  • For a taxable income between MYR (Malaysian Ringgit) 5000 and MYR (Malaysian Ringgit) 20,000: A flat tax of 0 MYR (Malaysian Ringgit) is levied. Additionally, tax is levied on excess at 1%.
  • For a taxable income between MYR (Malaysian Ringgit) 20,000 and MYR (Malaysian Ringgit) 35,000: A flat tax of 150 MYR (Malaysian Ringgit) is levied. Additionally, tax is levied on excess at 3%.
  • For a taxable income between MYR (Malaysian Ringgit) 35,000 and MYR (Malaysian Ringgit) 50,000: A flat tax of 600 MYR (Malaysian Ringgit) is levied. Additionally, tax is levied on excess at 8%.
  • For a taxable income between MYR (Malaysian Ringgit) 50,000 and MYR (Malaysian Ringgit) 70,000: A flat tax of 1800 MYR (Malaysian Ringgit) is levied. Additionally, tax is levied on excess at 13%.
  • For a taxable income between MYR (Malaysian Ringgit) 70,000 and MYR (Malaysian Ringgit) 100,000: A flat tax of 4400 MYR (Malaysian Ringgit) is levied. Additionally, tax is levied on excess at 21%.
  • For a taxable income between MYR (Malaysian Ringgit) 100,000 and MYR (Malaysian Ringgit) 250,000: A flat tax of 10,700 MYR (Malaysian Ringgit) is levied. Additionally, tax is levied on excess at 24%.
  • For a taxable income between MYR (Malaysian Ringgit) 250,000 and MYR (Malaysian Ringgit) 400,000: A flat tax of 46,700 MYR (Malaysian Ringgit) is levied. Additionally, tax is levied on excess at 24.5%.
  • For a taxable income between MYR (Malaysian Ringgit) 400,000 and MYR (Malaysian Ringgit) 600,000: A flat tax of 83,450 MYR (Malaysian Ringgit) is levied. Additionally, tax is levied on excess at 25%.
  • For a taxable income between MYR (Malaysian Ringgit) 600,000 and MYR (Malaysian Ringgit) 1,000,000: A flat tax of 133,450 MYR (Malaysian Ringgit) is levied. Additionally, tax is levied on excess at 26%.
  • For a taxable income between MYR (Malaysian Ringgit) 1,000,000 and MYR (Malaysian Ringgit) 2,000,000: A flat tax of 237,450 MYR (Malaysian Ringgit) is levied. Additionally, tax is levied on excess at 28%.
  • For a taxable income between higher than MYR (Malaysian Ringgit) 2,000,000: A flat tax of 517,450 MYR (Malaysian Ringgit) is levied. Additionally, tax is levied on excess at 30%.

For non-residents, Personal Income Tax is levied at a flat rate of 30% on total taxable income.

Corporate Income Taxation in Malaysia

For all companies, regardless of their tax residency status in Malaysia, the basis of taxation that is used depends on income accrued in or sourced from within Malaysia.

Corporate Income Tax Rates

Corporate Income is taxed in Malaysia on the following rates:

  • For resident companies (not included in the list given below): CIT is charged at a rate of 24%.
  • For resident companies (with paid-up capital of up to 2.5 Million MYR, and gross income of less than MYR 50 Million): CIT is charged at a rate of 17% on the first MYR 600,000 chargeable income.
  • For resident companies (that does not have a controlling interest in a company with a paid-up capital of around MYR 2.5 Million): CIT is charged at a rate of 17% on the first MYR 600,000 chargeable income. On the excess income, CIT is levied at a rate of 24%.
  • For resident companies (that are not controlled by other companies with a paid-up capital of around MYR 2.5 Million): CIT is charged at a rate of 17% on the first MYR 600,000 chargeable income. On the excess income, CIT is levied at a rate of 24%.

Petroleum Income Tax

Petroleum Income Tax is levied at a rate of 38% on income from all petroleum operations in Malaysia. An effective petroleum income tax rate is applicable at a rate of 25% from income that has been earned from petroleum operations in the marginal fields.

Other Taxation in Malaysia

  • Sales Tax: Sales Tax is imposed as a consumption tax in Malaysia on taxable goods that are manufactured locally by a registered manufacturer. It is applied as an ad valorem tax. There are only specific rates of sales tax that are currently imposed on specific classes of petroleum. The rates vary from 5% to 10%, contingent on the category of goods.
  • Service Tax: Service Tax is also imposed as a consumption tax that is levied and charged on taxable services that are provided in Malaysia by registered entities within one’s own business. Service tax in this regard is levied at a rate of 6%.
  • Import Duties: Import Duties are further levied on goods and services that are imported within Malaysia. They are also levied on an ad valorem basis. However, in certain cases, they might be imposed in a different manner. The ad valorem rates that are levied on import duties mostly range from 2% to 60%. Furthermore, raw materials, machinery, as well as other essential foodstuff is also generally not required to be included under import duties.
  • Excise Duties: Excise Duties are also imposed on alcohol and tobacco related products. The rate of excise duties mostly vary from MYR 1.10 per liter, and 15% for the value of certain beverage types.
  • Property Tax: Property Tax is mostly levied on gross annual value of property that is mostly determined by the local state authorities.
  • Contract Levy: A further levy of 0.125% is levied on contract works that have a contract sum higher than MYR 500,000. It is imposed on every registered contractor under the jurisdiction of Construction Industry Development Board.
  • Windfall Profit Levy: A further levy is also imposed on crude palm oil as well as kernel oil in cases where the price exceeds MYR 2500 per ton within the periphery of Malaysian Peninsula.

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