News & Articles

2022 MALAYSIA BUDGET HIGHLIGHTS
INDIVIDUAL TAX
EXPENSES RELATING TO	Individual tax relief of up to RM2,500 to	Effective Date :
ELECTRIC VEHICLE (EV)	be introduced for purchase, install, lease	YA 2022 and
CHARGING FACILITIES	and subsribe for Electronic Vehicles (EV)	YA 2023
	charging facilities.
EXTENDED SCOPE OF	It has been proposed that the scope of	Effective Date :
INDIVIDUAL RELIEF ON	relief (in respect of medical examination	From YA 2022
MEDICAL EXPENSES FOR	or consultation services) is expanded to
SELF, SPOUSE OR CHILD	include mental illness. The medical
	consultation services or medical
	examination must be conducted by the
	following approved bodies :-
	a) Psychiatrist registered with the
	Malaysian Medical Council under
	Mental Health Act 2001;
	b) Clinical psychologist registered with
	the Ministry of Health under the Allied
	Health Professional Act 2016; or
	c) Counsellors registered with the
	Malaysian Board of Counsellors under
	the Counsellors Act 1988.
CONTRIBUTION TO	It has been proposed that the scope of	Effective Date :
EMPLOYEES PROVIDENT	tax relief for EPF contribution to be	From YA 2022
FUND (EPF)	expanded to include voluntary
	contributions including pensionable
	civil servant.
TAX RELIEF FOR	It has been proposed that the tax relief	Effective Date :
CONTRIBUTION TO THE	for Socso contribution to be expanded	From YA 2022
SOCIAL SECURITY	to include EIS contributions, with the
ORGANIZATION (SOCSO)	overall limit increased from RM250 to
	RM350.
PURCHASE OF PERSONAL	Additional tax relief for the purchase of	Extended to
COMPUTER, SMART PHONE	mobile phone, computer and tablets	YA 2022
AND TABLETS	of RM2,500 to be extended to YA 2022.
EXTENSION OF SPECIAL	Application deadline extended for	Extended to
INCOME TAX RATE TO NON-	special tax rate of 15% for five	31 December 2022
MALAYSIAN CITIZENS	consecutive years for non-Malaysian
INDIVIDUALS HOLDING KEY	individuals holding key or C-Suite
POSITION IN COMPANIES	position in companies relocating their
THAT MAKE NEW STRATEGIC	operations to Malaysia. Applications
INVESTMENTS	must be received by the Malaysian
	Investment Development Authority
	(MIDA) by 31 December 2022.
FEES PAID TO CHILD CARE	It has been proposed that the tax reliefs	Extended to
CENTRES	for fees paid to child care centres	YA 2022 and
	(registered with the Director General	YA 2023
	of Social Welfare under the Child Care
	Centre Act 1984) and Kindergarten
	(registered with the Education Act 1996)
	for child age 6 years and below be
	increased from RM1,000 to RM3,000
	and this is extended to YA 2022 and
	YA 2023.
FEES EXPANDED ON SELF FOR	It has been proposed that the tax relief	Effective Date :
COURSE OF STUDY FOR	for fees expanded on self for any course	YA 2022 &
UPSKILLING AND SELF	of study undertaken for the purpose of	YA 2023
ENHANCEMENT	upskilling and self enhancement is
	limited to RM2,000.
	(The course has to be conducted by a
	body recognised by the DG of Skills
	Development under the National Skills
	Development Act 2006).
DOMESTIC TRAVEL	It has been proposed that the tax reliefs	Extended to
EXPENSES	for domestic travel expenses (payment	31 December 2022
	for accommodation at premise
	registered with the Commissioner of
	Tourism under the Tourism Industry Act
	1992 and entrance fee to tourist
	attarctions is RM1,000 and this is
	extended to 31 December 2022.
CORPORATE TAX
IMPOSITION OF "CUKAI	To assist parties affected by the COVID	Effective Date :
MAKMUR"	-19 Pandemic, the government has	YA 2022 only
	proposed that a special one-off "cukai
	makmur" be imposed on non-Micro, Small
	and Medium Enterprise (MSMEs) companies
	which generate high profits during the
	period of COVID-19 Pandemic as
	follows:-
	a) Chargeable income for the first
	RM100 million - tax at 24%
	b) Chargeable income in excess of
	RM100 million - tax at 33%
TAX ON INCOME RECEIVED	Existing tax exemption on foreign source	Effective Date :
FROM OUTSIDE MALAYSIA	income will be removed from 01 January	From 1 January
	2022. Malaysian residents will be	2022
	subjected to tax on foreign income
	remitted into Malaysia.
TIME LIMIT ON CARRY	Companies will be able to carry forward	Extended to
FORWARD OF UNABSORBED	losses for 10 Years of Assessment (YA)	10 consecutive
LOSSES	instead of 7 years. This will apply	YAs
	restrospectively from YA 2019.
SPECIAL REVISION OF	All companies are allowed to revise	Effective Date :
CORPORATE INCOME TAX	their income tax estimates in the 11th	01 Jan 2022 until
ESTIMATES	month of the basis period before	31 Oct 2022
	31 October 2022.
TAX DEDUCTION FOR COVID-	Income tax deduction be provided to	Effective Date :
19 BOOSTER SHOT	employers for cost associated with the	Further
	self-funded booster vaccine.	clarification
		required for tax
		deduction
EXTENTION OF SPECIAL	Reinvestment allowances (RA) be	Extended to
REINVESTMENT ALLOWANCES	extended for a further two years (YA	YA 2024
(RA)	2023 and YA 2024) on qualifying
	capital expenditures.
	The special RA is at a rate of 60% on
	qualifying capital expenditures incurred
	for the purpose of a qualifying project
	which can be set off against 70% of
	Statutory Business Income or 100% of
	Statutory Business Income (projects that
	have archieved the level of productivity
	prescribed by the Minister of Finance).
SPECIAL TAX DEDUCTION ON	A special tax deduction equivalent to the	Extended to
RENTAL DISCOUNT TO	amount of rental reduction is given	June 2022
TENANTS	to taxpayers which provides a reduction
	of rental on business premises of at least
	30% from the original rental rate for :-
	a) SME tenants - April 2020 to December
	2021
	b) All tenants - January 2021 to December
	2021, extended to
	June 2022
DEFERMENT OF INCOME	MSMES will be given a deferment of	Effective Date :
TAX INSTALMENTS FOR	monthly tax instalments payments for	Until 30 June 2022
MICRO, SMALL AND MEDIUM	a period of 6 months.
ENTERPRISE (MSMES)
EXTENSION OF TAX REBATE FOR	A rebate for a period of 3 consecutive years	Effective Date :
NEW MICRO, SMALL AND	is granted from the year of assessment in	01 July 2020 and
MEDIUM ENTERPRISE (MSMES)	which a MSMES or LLP first commences	now extended to
AND LIMITED LIABILITY	operation.	31 December 2022
PARTNERSHIP (LLP)
	The rebate amount is equivalent to
	operating or capital expenditures which
	has incurred limited to a maximum
	amount of RM20,000 for each YA.
	Any unutilised rebate is not refundable or
	allowed to set off against current and
	subsequent tax liability.
	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, extended to 31/12/2022
	(including MSMEs that perform
	business activities through online
	platform).
DEDUCTION FOR	Currently, a special tax deduction is given	Effective Date :
RENOVATION AND	for the cost of renovation and	01 Mac 2020 and
REFURBISHMENT	refurbishment of business premises	now extended to
EXPENSES	incurred from 01 Mac 2020 to 31	31 December 2022
	December 2021 (qualifying period,
	subject to a maximum amount
	of RM300,000 for the entire qualifying
	period).
	It is proposed that the special deduction
	be extended to cover expenditure
	incurred until 31 December 2022.
FURTHER TAX DEDUCTION ON	Under the scheme of Strategic Programme	Effective Date :
EXPENSES FOR EMPLOYEES'	to Empower the People and Economy	01 January 2021
ACCOMMODATION UNDER	(PEMERKASA), a further tax deduction for	and now extended
THE SAFE@WORK	rental expenses on premises for living	to 31 December
	accommodation of their employees who	2022
	work for manufacturing companies and
	manufacturing -related service companies
	that participate in the Safe@Work
	Programme will be given a further
	deduction of up to RM50,000 per
	company for amount incurred from
	01 January 2021 and extended to
	31 December 2022.
DOUBLE DEDUCTION FOR	The scope of double deductions for	Effective Date :
SCHOLARSHIP PROVIDED	sponsoring scholarship for students of	YA 2022 to
BY COMPANIES	higher educational institutional to be	YA 2025
	expanded to all fields of study at the
	following levels and extended to YA 2025.
	a) Technical and Vocational;
	b) Diploma, bachelor degree, master
	degree and doctor of philosophy.
INCOME TAX EXEMPTION FOR	Companies are eligible for 50% tax	Effective Date :
ORGANIZING ARTS,	exemption on statutory income from	YA 2020 to
CULTURALS, SPORTS AND	organizing the following activities for	YA 2025
RECREATIONAL ACTIVITIES	YA 2020, and currently extended to
IN MALAYSIA	YA 2025 :-
	a) Arts and Cultural Activities approved
	by the Ministry of Tourism, Arts and
	Culture;
	b) Sports and recreational competitions
	of international standards approved
	by the Ministry of Youth and Sports.
DOUBLE DEDUCTION FOR	A person who conduct a SIP approved	Effective Date :
STRUCTURED INTERNSHIP	by TalentCorp is eligible for double	YA 2022 to
PROGRAMME (SIP)	deduction on the following expenses	YA 2025
	incurred in relation to the SIP up to
	YA 2025.
	a) Intern's monthly allowances of not less
	than RM500;
	b) Training which capped at RM5,000
	for each YA;
	c) Meals, travelling and accommodation
	during the internship period, which
	capped at RM5,000 for each YA.
ACCELERATED CAPITAL	The ACA has been extended for 3 more	Effective Date :
ALLOWANCES (ACA) FOR	Years of Assessment for locally assembled	YA 2020 to
EXCURSION BUSES	excursion buses purchased by licensed	YA 2024
	tour operators at the following rate :-
	a) Initial Allowances (IA) of 20%;
	b) Annual Allowances (AA) of 40%.
GREEN INVESTMENT TAX	100% Green Investment Tax Allowances	Effective Date :
ALLOWANCES/ GREEN	and 70% Green Income Tax Exemption	for applications
TECHNOLOGY INCOME TAX	to include Rainwater Collection and	received by MIDA
EXEMPTION	Utilisation System Projects. Applications	from 01 January
	must be received by MIDA from 01	2022 to 31
	January 2022 to 31 December 2023.	December 2023
	The project should be verified by the
	Malaysian Green Technology Corporation
	(MGTC) to qualify for :-
	a) GITA of 100% on qualifying capital
	expenditures for qualifying RHS
	activities to set off against up to 70%
	of Statutory Income; or
	b) Income Tax Exemption (GITE) of 70%
	of Statutory Income for qualifying
	RHS services activities.
REAL PROPERTY GAIN TAX (RPGT)
REVIEW OF REAL PROPERTY	Real Property Gain Tax (RPGT) will revert	Effective Date :
GAIN TAX (RPGT) RATE	to 0% for individuals, for disposal happen	01 January 2022
	in the 6th year and subsequent years
	after the year of acquisition.
STAMP DUTY
STAMP DUTY FOR	Stamp duty on contract notes to be	Effective Date :
INSTRUMENTS OF TRANSFER	increased from 0.1% to 0.15% from	01 January 2022
OF LISTED SHARES	01 January 2022.
	The existing RM200.00 cap for each
	contract note will be removed.
STAMP DUTY EXEMPTION	Stamp duty exemption for restructuring	Extended to :
FOR RESTRUCTURING OR	or rescheduling of a business loan or	31 December 2022
RESCHEDULING OF LOAN/	financing agreements executed between
FINANCING AGREEMENT	a borrower or customers and a financial
	institution is extended to 31 December
	2022
STAMP DUTY EXEMPTION	Stamp duty exemption on merger and	Effective Date :
FOR MERGER AND	acquisition related instruments is to be	effective for
ACQUISITION	extended for another 1 year.	application in
		respect of M&A
		of companies
		received by
		MEDAC from
		01 July 2021 to
		30 June 2022 and
		M&A related
		instruments
		executed not later
		than 31 December
		2022
FINANCING AGREEMENT	100% stamp duty exemption be given on	Effective Date :
FOR PEER-TO PEER (P2P)	loan/financing agreements executed	effective from
FINANCING	between companies and investor for	instruments
	funds raised on P2P platform registered	executed from
	and recognised by the Securities	01 January 2022
	Commissions Malaysia.	to 31 December
		2026
	P2P financing is an online financing
	platform for companies to raise
	financing from a group of investor for
	business or working capital as well as
	financing invoices.
INDIRECT TAX
SPECIAL VOLUNTARY	An indirect tax Special Voluntary	Effective Date :
DISCLOSURE PROGRAMME	Disclosure Programme (SVDP) will be	has not been
(SVDP)	introduced, in phases. Penalty remissions	proposed
	of 100% in Phase 1 and 50% in Phase 2
	are proposed.
	In addition, remission of the primary
	tax underpaid will also be considered in
	certain cases.
SALES TAX EXEMPTION ON	Sales tax exemption (100%) on the sales	Extended to :
PASSENGER MOTOR VEHICLES	of locally assembled passenger motor	30 June 2022
	vehicles (including SUV and MPV) and
	(50%) on the sales of imported passenger
	motor vehicle be further extended for
	6 months to 30 June 2022.
SERVICE TAX ON DELIVERY	Service tax will be imposed on delivery	Effective date :
SERVICES	services provided by any service provider	from 01 July 2022
	including e-commerce platforms (but
	excluding food and beverages delivery
	services as well as logistics services).
BROKERING SERVICES IN	Service tax on brokerage activities for	Effective Date :
RELATION TO TRADING	listed shares will be exempted from	from 01 January
OF LISTED STOCK	01 January 2022.	2022
IMPORTED LOW VALUE	Sales tax to be imposed on imported low	Effective Date :
GOODS	value goods (goods which value does not	01 January 2023
	exceed RM500) sold online and couriered
	to customers in Malaysia, from 01
	January 2023.
TOURISM TAX EXEMPTION	Accommodation premise operators	Extended to :
	registered under the Tourism Tax Act	31 December 2022
	2017 are exempted from charging
	tourism tax until 31 December 2021. This
	exemption will be further extended to
	31 December 2022.
ENTERTAINMENT DUTY	Entertainment premises such as theme	Extended to:
EXEMPTION FOR	parks, performance stage, sport and	31 December
ENTERTAINMENT PREMISES	competition event and movie theatres in	2022
IN FEDERAL TERRITORIES	the Federal Territories are exempted from
	paying entertainment duty on the
	admission fee from 01 April 2021 and
	now extended to 31 December 2022.
IMPORT DUTY, EXCISE DUTY,	Full import duty exemption given on	Effective Date :
AND SALES TAX ON IMPORTED	components for locally assembled	01 January 2022
AND LOCALY	vehicles (CKD) and full excise duty and	to 31 December
MANUFACTURED	sales tax exemption given on CKD	2025
ELECTRONICS VEHICLES (EV)	Electric Vehicles (EV).
	Full import duty and excise duty	Effective Date :
	exemption on imported CBU	01 January 2022
	Electric Vehicles (EV).	to 31 December
		2023
EXCISE DUTY ON LIQUID OR	Excise duty to be imposed on premixed	Effective Date :
GEL CONTAINING NICOTINE	drinks with sugar content such as	from 01 April 2022
USED IN E-CIGARETTE AND	chocolate or cocoa, malt, coffee or tea.
VAPE	Excise duty will be imposed on liquids
	or gels containing nicotines for the use of
	electronic cigarettes and vape.
OTHER PROPOSAL
IMPLEMENTATION OF TAX	Implementation of tax identification	Effective Date :
IDENTIFICATION NUMBER	numbers for all companies, and	from 01 January
(TIN)	individuals above 18 years of age.	2022
INTRODUCTION OF TAX	Implementation of Tax Compliance	Effective Date :
COMPLIANCE CERTIFICATE	Certificate (TCC) as a pre-condition	from 01 January
(TCC)	for government procedures for	2023
	government projects.
The highlights are for general guidance only. It is prepared based on the information
available as at 29.10.2021 and may subjected to the amendments after the issuance
of the Finance Bill 2021.