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 |
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by one percentage (1%) point. |
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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 |
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their operations to Malaysia under
the PENJANA incentive |
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packages. |
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Conditions : |
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a) Employees's salary must be more
than RM25,000 per month |
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b) Working in a company under
approved relocation incentive |
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c) Class of employment - C suite or
main post in the company |
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d) Resident in Malaysia for each YA
to enjoy the incentive |
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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 |
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(INCLUDING FULL MEDICAL |
Scope of medical treatment expenses
include vaccination of |
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CHECK UP) |
up to RM1,000 which covers :
Pneumococcal, HPV, Influenza, |
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Rotavirus, Varicella, Meningococcal,
TDAP combination and |
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COVID-19. |
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New maximum amount for full medical
check up of up to |
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RM1,000.00 |
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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 |
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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 |
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RM7,000.00) |
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Conditions :- |
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The courses are conducted by body
recognized by the |
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Department of Skills Development of
the Ministry of Human |
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Resources. |
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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 |
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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 |
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Expansion of scope includes the
subscriptions of electronics |
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newspapers. |
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The additional relief of RM500.00 is
given under lifestyle relief |
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for expenses relating to sports,
including purchase of |
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sport equipments; rental/entrance fee
to sports facility and fee |
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of any sport competition. |
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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 |
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TABLETS |
or tablet within the period of
01/06/2020 to 31/12/2020. |
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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) |
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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. |
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NASIONAL (SSPN) FOR TAXPAYER'S |
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CHILD |
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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 |
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Conditions :- |
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a) Child's age : 6 years old and
below |
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b) Registered Child Care Centre or
Kindergarden with relavant |
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authorities |
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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 |
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a) Accommodation at the premises
registered with The |
(Payment from |
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Commissioner of Tourism Malaysia ; and |
01/03/2020 to |
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b) Entrance fee to tourist attraction
center |
31/12/2021) |
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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 |
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31/12/2021 |
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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 |
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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 |
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made from |
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The deduction is limited to 10% of
aggregate income (subject |
01/01/2021 to |
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to meeting the relevant conditions). |
31/12/2023 |
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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 |
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employment income for 5 consecutive
years. |
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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. |
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PAROLEES, SUPERVISED
PERSON |
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AND EX-DRUG DEPENDANTS |
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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 |
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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 |
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DOCUMENTATION |
both & |
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b) Furnish transfer pricing
documentation within 30 days or |
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period decided by Court. |
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- Section 113B(4) of Act - if no
prosecution : |
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a) Penalty of RM20,000 - RM100,000 |
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- Section 113(5) of Act |
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a) May appeal to SCIT |
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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. |
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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 |
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The rate of the surcharge is not more
than 5% of the total |
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transfer pricing adjustments. |
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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) |
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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 ; |
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BOARD |
c) Leaver ; |
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d) Death (new requirement). |
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Ways to Inform the DG :- |
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a) Notification in Prescribe Form |
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Due Date to Notify DG :- |
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30 days from the date of new
employment/ termination of |
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employment/leave Malaysia/ being
informed of the Death. |
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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 |
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OF PROCEEDING UNDER ANY LAW |
of any tax or any debts or other sum
for which he is or may |
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be liable to pay under this part. |
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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 |
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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 |
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any other asset used and function as
place within which a |
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business is carried on. |
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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)) |
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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 |
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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. |
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between RM300 million and RM500 million. |
(for manufacturing |
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sectors); and |
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b) 0% tax rate for 15 years for a new
company in the |
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manufacturing sector
with new investment in fixed assets |
from 07/11/2020 to |
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exceeding RM500million. |
31/12/2022 |
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(for selected service) |
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c) 0% to 10% tax rate for a period up
to 10 years for a new company |
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in the selected service sector, including companies adapting |
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Industrial Revolution 4.0 and digitalisation technology with |
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investment that contributes to significant multiplier effect in |
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i) provision of technology solutions services; |
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ii) provision of infrastructure and technology for cloud |
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computing; |
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iii) research & Development (R&D)/design and development |
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activities; |
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iv) medical devices testing laboratory and clinical trials; |
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v) any services or manufacturing related services determine by |
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the Ministry of Finance (MOF) |
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For existing company in Malaysia who
relocate its overseas |
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manufacturing facilities into
Malaysia, the government allows |
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the following :- |
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a) 100% investment tax allowance for
5 years for an existing |
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company in Malaysia relocating its overseas manufacturing |
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facilities into Malaysia with investment in fixed assets |
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exceeding RM500 million. |
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Note : The above tax incentives are
available for eligible |
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companies in the manufacturing
sector (except for |
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selected industries) and subject
to the following conditions:- |
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i) The company incurs the first
capital expenditure within 1 |
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year from the date of
approval of the incentive; and |
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ii) The company meets the
investment in fixed asset within |
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3 years from the first date
of the capital expenditures |
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incurred. |
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For foreign investor who is having
its existing company in Malaysia |
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who is making new investments into
the following new selected |
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service segment can enjoy 10% tax
rate for a period up to 10 years :- |
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i) provision of technology solutions services; |
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ii) provision of infrastructure and technology for cloud |
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computing; |
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iii) research & Development (R&D)/design and development |
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activities; |
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iv) medical devices testing laboratory and clinical trials; |
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v) any services or manufacturing related services determine by |
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the Ministry of Finance (MOF) |
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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 |
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MIDA from |
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a) Income tax rate of 0% up to 10%
for the 1st 10 years; |
07/11/2020 to |
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b) Income tax rate of 10% for the
subsequent period of 10 years. |
31/12/2022 |
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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 |
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equivalent to amount of investment. |
07/11/2020 to |
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31/12/2025 |
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For subsidiary company that
commercialise R&D findings of public |
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research institutions including
public higher learning institutions |
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and private higher learning
institutions will be given a tax |
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exemption of 100% of Statutory
Business Income from Qualifying |
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Activity for 10 years. |
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Conditions :- |
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a)Activity/product as listed in the
Promotion of Investment Act 1986 |
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b)Must be approved by MIDA from
07/11/2020 to 31/12/2025 |
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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 |
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2 years. |
received by the |
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MIDA from |
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The minimum conditions of the number
of high value workers, |
01/01/2021 to |
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annual operating expenditure, and the
number of key post |
31/12/2022 |
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personnel for renewal of the tax
incentive for the second 5 years . |
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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 |
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rate for a period of 5 years and
renewable for another 5 years. |
received by the |
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MIDA from |
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01/01/2021 to |
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31/12/2022 |
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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 |
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Commissions |
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The income tax exemption on the above
grant be given for a period |
Malaysia from |
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of 5 years. |
01/01/2021 to |
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31/12/2025 |
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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. |
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The rebate amount is equivalent to
its operating or capital |
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expenditure which it has incurred
limited to a maximum amount |
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of RM20,000 for each Year of
Asessment. |
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Any unutilized rebate is not
refundable or allowed to set off |
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against current and subsequent tax
liabiltity |
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Conditions:- |
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a) Resident and incorporated in
Malaysia; |
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b) Paid-up/capital contribution not
more than RM2.5 million, gross |
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business income not more than RM50 million; |
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c) Commence operation : 01/07/2020 to
31/12/2021 |
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d) Other conditions under Statutory
Order shall be laid before the |
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"Dewan Rakyat". |
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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 |
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whole or any part of the sum wrongly
imposed on the acquirer by |
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the IRB made under subsection 14(5)
& 15(4) of the Income Tax |
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Act 1967. |
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If the sum remitted has been paid,
the DG shall repay the same. |
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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 |
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person who is not a citizen & not
permanent resident. |
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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 |
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COURT TO FURNISH RETURN |
of tax payers. |
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VIA ELECTRONIC MEDIUM |
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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). |
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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 |
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payable. |
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Subsection 22(1A) RPGT Act 1976 and
Subsection 104(1A), ITA 1967 |
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The certificate may be issued to any
Commisioner of Police or |
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Director of Immigration on an
electronic medium or by way of |
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electronic transmission. |
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Subsection 22(6) RPGT Act 1976 and
Subsection 104(6), ITA 1967 |
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To clarify that director as defined
under subparagraph 5(4) of |
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Schedule 1 also can be retained from
leaving Malaysia for any tax |
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charged on the company. |
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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 |
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(value of the property). |
Excecuted from |
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01/01/2021 to |
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31/12/2025 |
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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 |
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projects must be certified by the
Ministry of Housing and Local |
Transfer Executed |
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Government. |
from 01/01/2021 |
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to 31/12/2025 |
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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 |
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RM100.00 |
from 01/01/2021 |
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until 31/12/2025 |
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EXTENSION OF STAMP DUTY |
The stamp duty exemption to be
extended for 5 years. |
Effective Date : |
EXEMPTION FOR EXCHANGE |
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For contract notes |
TRADED FUND (ETF) |
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relating to ETF |
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executed from |
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01/01/2021 to |
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31/12/2025 |
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NEW IMPLEMENTATION OF |
The government will include the
electronic stamping method |
Effective Date : |
DIGITAL STAMPING |
by digital stamping |
01/01/2021 |
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The minister may make rules to
prescribe the form of digital |
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stamping to be used for payment of
stamp duty. |
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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 |
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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 |
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poverty; |
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b) refund any duty that has been
paid, which relates to that |
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remission. |
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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 |
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from YA 2020 |
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The right to appeal under LABATA Act
1990 refers to assessment |
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or additional assessment. |
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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 |
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LABUAN BUSINESS ACTIVITY |
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CHARGEABLE TO ITA 1967 |
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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 |
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any tax, debts or any sum payables
under the Labuan Business |
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Activity Tax Act (LBATA) 1990. |
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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. |
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DECLARATION OR INFORMATION |
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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 |
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sales value limit |
OPERATING IN FREE INDUSTRIAL |
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that is received by |
ZONES ("FIZ") AND
LICENSE |
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the Royal |
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Malaysian Customs |
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Department from |
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07/11/2020 |
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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 |
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2022 |
YA 2022 |
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The import duty, excise duty
exemption on the purchase of one |
Effective Date : |
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CBU/CKU vehicle by a Malaysian under
Returning Expert Programme |
Extended to |
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is extended to 31 December 2023. The
amount of duties that can |
31/12/2023 |
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be exempted is reduced from RM150,000
to RM100,000. |
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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 |
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of an importation quota. |
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Taxes will be imposed on all imported
cigaretts, with the availability |
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of drawback facility for those meant
for transshipment and re- |
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export. |
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Taxes will be imposed on cigarettes
and tobacco products on all |
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duty free island. |
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10% excise duty will be imposed on
all types of electronic and non- |
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electronic cigarette devices
including vaping products, while |
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electronic cigarette liquip will be
subject to excise duty at RM0.40 |
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per milliliter. |
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TOURISM TAX |
Tourism tax will be imposed on
accommodation premises booked |
Effective Date : |
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via an online platform operator , to
align with the treatment for |
01/07/2021 |
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bookings made directly with the
registrered accommodation |
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premise operators. |
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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. |
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