Malaysia: Tax provisions in economic stimulus package

Malaysia: Tax provisions in economic stimulus package

The interim prime minister on 27 February 2020 announced the economic stimulus package for 2020.


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In brief, tax measures proposed in the economic stimulus package concerning income tax:

  • Deferral of tax installment payments for tourism sector, as relief related to coronavirus situation
  • Revision of income tax estimates
  • Special individual (personal) income tax relief on domestic travel
  • Accelerated capital allowance for machinery and equipment including information and communications technology equipment
  • Special tax deduction for the establishment of regional offices by international shipping companies
  • Deduction and capital allowance provisions on personal protective equipment, provided to employees

Regarding the indirect tax measures in the economic stimulus package are the following proposals:

  • A 100% stamp tax (duty) exemption on loan restructuring and rescheduling arrangements
  • Service tax exemption for hotels and similar establishments
  • Import customs duty and sale tax exemptions on equipment and machinery for port operators
  • Expansion of value added tax (VAT) relief for activities conducted in licensed manufacturing warehouses and industrial zones
  • Review of the conditions for duty-free goods purchased by persons entering Malaysia

Read a February 2020 report [PDF 573 KB] prepared by the KPMG member firm in Malaysia

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