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INDIVIDUAL TAX
REDUCTION IN INDIVIDUAL	For tax resident individuals within the chargeable income	Effective Date:
INCOME TAX RATE	band of RM50,001 to RM70,000 will enjoy a reduction of tax rate	YA 2021
	by one percentage (1%) point.
INDIVIDUAL (NON-CITIZENS)	Flat rate of 15% of income tax rate on employment for 5	Effective Date:
EMPLOYED IN COMPANY	consecutive years apply to non-Malaysian citizens holding	YA 2021
UNDER RELOCATION INCENTIVE	key position / C-Suites position in companies who relocate
	their operations to Malaysia under the PENJANA incentive
	packages.
	Conditions :
	a) Employees's salary must be more than RM25,000 per month
	b) Working in a company under approved relocation incentive
	c) Class of employment - C suite or main post in the company
	d) Resident in Malaysia for each YA to enjoy the incentive
ADDITIONAL RELIEF ON MEDICAL	Increase of total medical treatment expenses to a maximum	Effective Date:
EXPENSES FOR SERIOUS DISEASES	of RM8,000.00	YA 2021
FOR SELF, SPOUSE OR CHILD
(INCLUDING FULL MEDICAL	Scope of medical treatment expenses include vaccination of
CHECK UP)	up to RM1,000 which covers : Pneumococcal, HPV, Influenza,
	Rotavirus, Varicella, Meningococcal, TDAP combination and
	COVID-19.
	New maximum amount for full medical check up of up to
	RM1,000.00
ADDITIONAL RELIEF ON MEDICAL	Increase of total medical expenses for parents up to a maximum	Effective Date:
EXPENSES FOR PARENTS	of RM8,000.00	YA 2021
EXPANSION OF EXISTING RELIEF ON	Expansion of scope on expenses includes upskilling courses	Effective Date:
EDUCATION FEES (SELF)	or self-enhancement course limited to RM1,000.00 (part of the	YA 2021 - 2022
	RM7,000.00)
	Conditions :-
	The courses are conducted by body recognized by the
	Department of Skills Development of the Ministry of Human
	Resources.
ADDITIONAL RELIEF ON DISABLED	Increase of total relief for disable spouse for up to a maximum	Effective Date:
SPOUSE	of RM5,000.00.	YA 2021
EXPANSION OF EXISTING RELIEF ON	Increase of total relief for lifestyle for up to a maximum of	Effective Date:
LIFESTYLE RELIEF	RM3,000.00.	YA 2021
	Expansion of scope includes the subscriptions of electronics
	newspapers.
	The additional relief of RM500.00 is given under lifestyle relief
	for expenses relating to sports, including purchase of
	sport equipments; rental/entrance fee to sports facility and fee
	of any sport competition.
NEW RELIEF ON EXPENSES	In addition to the lifestyle relief under Paragraph 46(1)(p) of the	Effective Date:
INCURRED FOR PURCHASE OF	Income Tax Act (Act) 1967, the government has given a personal	YA 2020
COMPUTER, SMARTPHONES OR	relief of up to RM2,500 for the purchase of computer, smartphone
TABLETS	or tablet within the period of 01/06/2020 to 31/12/2020.
EXTENDED PERIOD FOR  RELIEF	The existing relief on private retirement scheme of RM3,000.00	Extended to
ON PRIVATE RETIREMENT	has been extended from YA 2021 to YA 2025.	YA 2025
SCHEME (PRS)
EXTENDED PERIOD FOR  RELIEF	The existing relief on amount deposited into Skim Simpanan	Extended to
ON AMOUNT DEPOSITED INTO	Pendidikan Nasional (SSPN) for taxpayer's child of RM8,000.00	YA 2022
SKIM SIMPANAN PENDIDIKAN	has been extended from YA 2020 to YA 2022.
NASIONAL (SSPN) FOR TAXPAYER'S
CHILD
ADDITIONAL RELIEF ON CHILD	Increase of total relief for child care fees for up to a maximum	Effective Date:
CARE FEES	of RM3,000.00.	YA 2020 - 2021
	Conditions :-
	a) Child's age : 6 years old and below
	b) Registered Child Care Centre or Kindergarden with relavant
	authorities
RELIEF ON EXPENDITURE	A total relief of up to a maximum RM1,000.00 is given to	Effective Date:
RELATED TO DOMESTIC TOURISM	taxpayer who incurred expenditures on the following :-	YA 2020 - 2021
	a) Accommodation at the premises registered with The	(Payment from
	Commissioner of Tourism Malaysia ; and	01/03/2020 to
	b) Entrance fee to tourist attraction center	31/12/2021)
CHANGES TO EMPLOYEES	The employee's minimum contribution rate for EPF will be reduced	Effective Date:
PROVIDENT FUND (EPF)	from 11% to 9%.	01/01/2021 to
CONTRIBUTIONS RATE		31/12/2021
EXEMPTION ON COMPENSATION	Increase of total limit of exemption from RM10,000 to RM20,000	Effective Date:
FOR LOSS OF EMPLOYMENT	for compensation for loss of employment	YA 2020 - 2021
TAX EXEMPTION ON INVESTMENT	Tax exemption on aggregate income equal to 50% of amount	Effective Date:
IN EQUITY CROWDFUNDING	invested, up to a maximum of RM50,000 for each YA.	For investment
		made from
	The deduction is limited to 10% of aggregate income (subject	01/01/2021 to
	to meeting the relevant conditions).	31/12/2023
TAX INCENTIVE FOR RETURNING	Applications to be received by TalentCorp will be extended to	Extended to
EXPERT PROGRAMME	31/12/2023. The incentive applicable is a flat rate of 15% on	31/12/2023
	employment income for 5 consecutive years.
CORPORATE TAX
FURTHER DEDUCTION FOR	Further tax deduction to employ senior citizens, ex-convicts,	Extended to
EMPLOYER WHO EMPLOY	parolees, supervised persons and ex-drug dependants to be	YA 2025
SENIOR CITIZENS, EX-CONVICTS,	extended for 5 years to YA 2025.
PAROLEES, SUPERVISED PERSON
AND EX-DRUG DEPENDANTS
GROUP RELIEF : DETERMINATION	Companies indirectly holding the surrendering or claimant company	Effective Date:
OF RELATED COMPANIES	must be a resident and incorporated in Malaysia.	YA 2021
NEW PENALTIES FOR FAILURE TO	Failure to furnish the transfer pricing documentation on time :-	Effective Date:
FURNISH CONTEMPORANEOUS	- Section 113B(1) of Act - On conviction:	01/01/2021
TRANSFER PRICING	a) Fine RM20,000 - RM100,000 or prison term of up to 6 months or
DOCUMENTATION	both  &
	b) Furnish transfer pricing documentation within 30 days or
	period decided by Court.
	- Section 113B(4) of Act - if no prosecution :
	a) Penalty of RM20,000 - RM100,000
	- Section 113(5) of Act
	a) May appeal to SCIT
POWER TO DISREGARD	Under Section 140A(3B) of the Act, the Director General of	Effective Date:
STRUCTURE IN A CONTROLLED	Inland Revenue Board of Malaysia (DG) can make adjustment	01/01/2021
TRANSACTION	to structure the controlled transactions as he thinks fit.
SURCHAGE ON TRANSFER	Under Section 104A(3C) of the Act, surcharge to be imposed on	Effective Date:
PRICING ADJUSTMENT	transfer pricing adjustments on all cases whether taxable or not.	01/01/2021
	The rate of the surcharge is not more than 5% of the total
	transfer pricing adjustments.
INCOME TAX RETURN FILING	It is mandatory for all the Limited Liability Partnership (LLP)	Effective Date:
FOR LIMITED LIABILITY	taxpayers to submit tax return through e-filing only.	YA 2021
PARTNERSHIP (LLP)
NOTIFICATIONS FROM	The employers are required to notify the DG for the following:-	Effective Date:
EMPLOYERS TO DIRECTOR	a) New employment ;	01/01/2021
GENERAL OF INLAND REVENUE	b) Termination of employment ;
BOARD	c) Leaver ;
	d) Death (new requirement).
	Ways to Inform the DG :-
	a) Notification in Prescribe Form
	Due Date to Notify DG :-
	30 days from the date of new employment/ termination of
	employment/leave Malaysia/ being informed of the Death.
NEW PROVISION - SECTION 103B	Any proceeding against the government or Director General of	Effective Date:
OF THE ACT (TAX PAYABLE	Inland Revenue Board of Malaysia (DG) by taxpayer under any	01/01/2021
NOTWITHSTANDING INSTITUTION	other written law shall not relieve any person from payment
OF PROCEEDING UNDER ANY LAW	of any tax or any debts or other sum for which he is or may
	be liable to pay under this part.
WITHHOLDING TAX ON	It is proposed that withholding tax on distribution of REIT	Effective Date:
DISTRIBUTION OF REIT INCOME	income as a final tax.	YA 2021
AS FINAL TAX
DEFINITION OF "PLANT" IN THE	"Plant" means an apparatus used by a person for carrying on his	Effective Date:
ACT (PARA 70A, SCHEDULE 3)	business, but does not include building, intangible asset or	YA 2021
	any other asset used and function as place within which a
	business is carried on.
EXTENDED PERIOD FOR TAX	Company that has claimed 15 consecutive years of RA is entitled	Effective Date:
INCENTIVE CLAIM (REINVESTMENT	to extend RA claims from YA 2020 until YA 2022.	YA 2020 to YA 2022
ALLOWANCES (RA))
REVIEW OF TAX INCENTIVES	For new companies who relocate their business to Malaysia,	Effective Date:
FOR COMPANIES RELOCATING	the government allows the following:-	For application
THEIR OPERATIONS TO MALAYSIA		received by the MIDA
AND UNDERTAKING NEW	a) 0% tax rate for 10 years for a new company in the	from 01/01/2020 to
INVESTMENT	manufacturing sector with new investment in fixed assets	31/12/2022.
	between RM300 million and RM500 million.	(for manufacturing
		sectors); and
	b) 0% tax rate for 15 years for a new company in the
	manufacturing sector with new investment in fixed assets	from 07/11/2020 to
	exceeding RM500million.	31/12/2022
		(for selected service)
	c) 0% to 10% tax rate for a period up to 10 years for a new company
	in the selected service sector, including companies adapting
	Industrial Revolution 4.0 and digitalisation technology with
	investment that contributes to significant multiplier effect in
	i) provision of technology solutions services;
	ii) provision of infrastructure and technology for cloud
	computing;
	iii) research & Development (R&D)/design and development
	activities;
	iv) medical devices testing laboratory and clinical trials;
	v) any services or manufacturing related services determine by
	the Ministry of Finance (MOF)
	For existing company in Malaysia who relocate its overseas
	manufacturing facilities into Malaysia, the government allows
	the following :-
	a) 100% investment tax allowance for 5 years for an existing
	company in Malaysia relocating its overseas manufacturing
	facilities into Malaysia with investment in fixed assets
	exceeding RM500 million.
	Note : The above tax incentives are available for eligible
	companies in the manufacturing sector (except for
	selected industries) and subject to the following conditions:-
	i) The company incurs the first capital expenditure within 1
	year from the date of approval of the incentive; and
	ii) The company meets the investment in fixed asset within
	3 years from the first date of the capital expenditures
	incurred.
	For foreign investor who is having its existing company in Malaysia
	who is making new investments into the following new selected
	service segment can enjoy 10% tax rate for a period up to 10 years :-
	i) provision of technology solutions services;
	ii) provision of infrastructure and technology for cloud
	computing;
	iii) research & Development (R&D)/design and development
	activities;
	iv) medical devices testing laboratory and clinical trials;
	v) any services or manufacturing related services determine by
	the Ministry of Finance (MOF)
TAX INCENTIVE FOR COMPANIES	The manufacturing company who manufacture pharmaceutical	Effective Date:
MANUFACTURING	products, including vaccines (especially COVID-19 vaccine) is given	For application
PHARMACEUTICAL PRODUCTS	tax incentive of the following :-	received by the
INCLUDING VACCINES		MIDA from
	a) Income tax rate of 0% up to 10% for the 1st 10 years;	07/11/2020 to
	b) Income tax rate of 10% for the subsequent period of 10 years.	31/12/2022
REVIEW AND EXPANSION OF	For investor company who invest in subsidiary company	Effective Date:
SCOPE OF TAX INCENTIVE FOR	involved in commercialisation of R&D findings of public research	For application
COMMERCIALISATION OF	institutions including public higher learning institutions and	received by the
RESEARCH AND DEVELOPMENT	private higher learning institutions will be given a tax deduction	MIDA from
	equivalent to amount of investment.	07/11/2020 to
		31/12/2025
	For subsidiary company that commercialise R&D findings of public
	research institutions including public higher learning institutions
	and private higher learning institutions will be given a tax
	exemption of 100% of Statutory Business Income from Qualifying
	Activity for 10 years.
	Conditions :-
	a)Activity/product as listed in the Promotion of Investment Act 1986
	b)Must be approved by MIDA from 07/11/2020 to 31/12/2025
TAX INCENTIVE FOR PRINICIPAL	The application period for Principal Hub incentive for companies	Effective Date:
HUB	undertaking qualifying service activities be extended for another	For application
	2 years.	received by the
		MIDA from
	The minimum conditions of the number of high value workers,	01/01/2021 to
	annual operating expenditure, and the number of key post	31/12/2022
	personnel for renewal of the tax incentive for the second 5 years .
TAX INCENTIVE FOR GLOBAL	New incentive scheme introduced as Global Trading Centre	Effective Date:
TRADING CENTRE	applies to company and the company will be given 10% income tax	For application
	rate for a period of 5 years and renewable for another 5 years.	received by the
		MIDA from
		01/01/2021 to
		31/12/2022
REVIEW ON THE INCOME TAX	The existing income tax exemption on grant for Green SRI sukuk	Effective Date:
EXEMPTION ON THE GREEN	be expanded to all SRI sukuk and bond which meets the ASEAN	For application
SUSTAINABLE AND RESPONSIBLE	Green, Social and Sustainable Bond Standards approved by the	received by
INVESTMENTS SUKUK GRANT	Securities Commissions Malaysia.	Securities
		Commissions
	The income tax exemption on the above grant be given for a period	Malaysia from
	of 5 years.	01/01/2021 to
		31/12/2025
TAX REBATE FOR COMPANIES	A rebate may be granted for a period of 3 consecutive years	Effective Date :
AND LIMITED LIABILITY	from the year of assessment in which a company or limited	YA 2021
PARTNERSHIP (LLP)	liability partnership first commences operation.
	The rebate amount is equivalent to its operating or capital
	expenditure which it has incurred limited to a maximum amount
	of RM20,000 for each Year of Asessment.
	Any unutilized rebate is not refundable or allowed to set off
	against current and subsequent tax liabiltity
	Conditions:-
	a) Resident and incorporated in Malaysia;
	b) Paid-up/capital contribution not more than RM2.5 million, gross
	business income not more than RM50 million;
	c) Commence operation : 01/07/2020 to 31/12/2021
	d) Other conditions under Statutory Order shall be laid before the
	"Dewan Rakyat".
REAL PROPERTY GAIN TAX (RPGT)
POWER TO DIRECTOR GENERAL	It is proposed that discreationary power be given to the Director	Effective Date :
(DG) TO REMIT A SUM IMPOSED	General of Inland Revenue Board of Malaysia (IRB) to remit the	YA 2021
	whole or any part of the sum wrongly imposed on the acquirer by
	the IRB made under subsection 14(5) & 15(4) of the Income Tax
	Act 1967.
	If the sum remitted has been paid, the DG shall repay the same.
DUTY OF ACQUIRER TO RETAIN	Provision is amended to align all disposers in the same category of	Effective Date :
AND PAY PART OF THE	disposal under Part 111 of Sch 5 and ensure that retention sum of	01/01/2021
CONSIDERATION	7% is equally applicable to all including an executor of deceased
	person who is not a citizen & not permanent resident.
PROVISION IN THE LAW WHICH	Under the new Subsection 57A(3), (4), (5) & (6) of the Income Tax	Effective Date :
ALLOW TAX AGENT, ADVOCATES	Act (Act) 1967, tax agent, advocates and solicitor of the high court	01/01/2021
OR SOLICITOR OF THE HIGH	are allowed to furnish a return via electronic medium on behalf
COURT TO FURNISH RETURN	of tax payers.
VIA ELECTRONIC MEDIUM
CHANGES IN THE PROVISION	Under Paragraph II Schedule 5 of the RPGT ACT, the disposer	Effective Date :
UNDER PART II OF SCHEDULE 5,	includes an association registered under Societies Act 1966	01/01/2021
RPGT ACT 1976	(Act 335).
CONSEQUENTIAL AMENDMENT	Section 21C, RPGT Act 1976 and Section 103B, ITA 1967	Effective Date :
IN ALIGNING RPGT 1976 AND ITA	To clarify that any institution of proceedings under any written	01/01/2021
1967	law shall not relieve a person from the payment of tax due and
	payable.
	Subsection 22(1A) RPGT Act 1976 and Subsection 104(1A), ITA 1967
	The certificate may be issued to any Commisioner of Police or
	Director of Immigration on an electronic medium or by way of
	electronic transmission.
	Subsection 22(6) RPGT Act 1976 and Subsection 104(6), ITA 1967
	To clarify that director as defined under subparagraph 5(4) of
	Schedule 1 also can be retained from leaving Malaysia for any tax
	charged on the company.
STAMP DUTY
STAMP DUTY EXEMPTION	A full stamp duty exemption on both instrument of transfer and	Effective Date :
FOR FIRST RESIDENTIAL	loan agreement for the purchase of the first residential property	Sales and Purchase
PROPERTY	by a Malaysian citizen be increased from RM300,000 to RM500,000.	Agreement
	(value of the property).	Excecuted from
		01/01/2021 to
		31/12/2025
EXTENSION OF STAMP DUTY	Stamp duty exemption on loan agreements and instruments of	Effective Date :
EXEMPTION FOR ABANDONED	transfer given to rescuing contractor or developer and original	Loan Agreement
HOUSING PROJECTS	buyers be extended for another 5 years. The abandoned housing	and Instrument of
	projects must be certified by the Ministry of Housing and Local	Transfer Executed
	Government.	from 01/01/2021
		to 31/12/2025
EXTENSION OF STAMP DUTY	The stamp duty exemption has been extended for 5 years for the	Effective Date :
EXEMPTION FOR PERLINDUNGAN	insurance policy and takaful certificate relating to Perlindungan	For policies /
TENANG PRODUCTS	Tenang Products with yearly premium / contribution not exceeding	certificate issued
	RM100.00	from 01/01/2021
		until 31/12/2025
EXTENSION OF STAMP DUTY	The stamp duty exemption to be extended for 5 years.	Effective Date :
EXEMPTION FOR EXCHANGE		For contract notes
TRADED FUND (ETF)		relating to ETF
		executed from
		01/01/2021 to
		31/12/2025
NEW IMPLEMENTATION OF	The government will include the electronic stamping method	Effective Date :
DIGITAL STAMPING	by digital stamping	01/01/2021
	The minister may make rules to prescribe the form of digital
	stamping to be used for payment of stamp duty.
POWER OF THE MINISTER TO	Under Section 80(1A) of he Stamp Act 1949, the minister is	Effective Date :
EXEMPT STAMP DUTY ON	empowered to exempt duty on any instruments.	01/01/2021
INSTRUMENTS
NEW PROVISION FOR THE POWER	Power is given to the collector to :	Effective Date :
TO COLLECTOR TO REMIT DUTIES	a) remit duty paid or payable wholly or in part, on grounds of	01/01/2021
	poverty;
	b) refund any duty that has been paid, which relates to that
	remission.
LABUAN BUSINESS ACTIVITY
TAX ACT (LBATA) 1990
CONSEQUENTIAL AMENDMENT	The definition of chargeable profit under LABATA Act 1990 refers	Effective Date :
FROM FINANCE ACT 2019	to net profit as reflected in the audited accounts.	Deemed effective
		from YA 2020
	The right to appeal under LABATA Act 1990 refers to assessment
	or additional assessment.
POWER OF DG TO ALLOW	The DG has the power to give extension of time on the irrevocable	Effective Date :
EXTENSION OF TIME (EOT) ON	election for Labuan Business Activity Chargeable to ITA 1967.	YA 2021
IRREVOCABLE ELECTION FOR
LABUAN BUSINESS ACTIVITY
CHARGEABLE TO ITA 1967
NO RELIEF OF TAXES FROM	No institution of any proceedings under any other written law	Effective Date :
PROCEEDING AGAINST THE	against the government or the Director General of Inland Revenue	01/01/2021
GOVERNMENT	could relieve any person from the liability for the payment of
	any tax, debts or any sum payables under the Labuan Business
	Activity Tax Act (LBATA) 1990.
MINIMUM FINE ON OFFENCE	The provision incuded minimum fine of RM20,000 to be imposed if	Effective Date :
OF CONFIDENTIAL RETURN OF	convicted with the offence of confidential return of profit,	01/01/2021
PROFIT, STATUTORY	statutory declaration or information.
DECLARATION OR INFORMATION
INDIRECT TAX
INCREASE IN THE PERMISSIBLE	The sales value threshold for the value added activities carried out	Effective Date :
LIMIT OF VALUE ADDED	in an FIZ and LMW is increased from 10% to 40% of the total annual	New application
ACTIVITIES / ADDITIONAL	sales value.	for increase in
ACTIVITIES FOR COMPANIES		sales value limit
OPERATING IN FREE INDUSTRIAL		that is received by
ZONES ("FIZ") AND LICENSE		the Royal
		Malaysian Customs
		Department from
		07/11/2020
EXTENSION OF SALES TAX AND	The sales tax exemption granted on the acquisition of locally	Effective Date :
IMPORT DUTY EXEMPTION	assembled buses by bus operator to be extended to 31 December	Extended to
	2022	YA 2022
	The import duty, excise duty exemption on the purchase of one	Effective Date :
	CBU/CKU vehicle by a Malaysian under Returning Expert Programme	Extended to
	is extended to 31 December 2023. The amount of duties that can	31/12/2023
	be exempted is reduced from RM150,000 to RM100,000.
TIGHTENING OF TRADING OF	The renewal process for exsiting licences to import cigarettes	Effective Date :
CIGARETTES	will be tightened with revised conditions, including the imposition	01/01/2021
	of an importation quota.
	Taxes will be imposed on all imported cigaretts, with the availability
	of drawback facility for those meant for transshipment and re-
	export.
	Taxes will be imposed on cigarettes and tobacco products on all
	duty free island.
	10% excise duty will be imposed on all types of electronic and non-
	electronic cigarette devices including vaping products, while
	electronic cigarette liquip will be subject to excise duty at RM0.40
	per milliliter.
TOURISM TAX	Tourism tax will be imposed on accommodation premises booked	Effective Date :
	via an online platform operator , to align with the treatment for	01/07/2021
	bookings made directly with the registrered accommodation
	premise operators.
The highlights are for general guidance only. It is prepared based on the information available as at 06.11.2020 and
may be subjected to the amendments after the issuance of the Finance Bill 2020.