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Malaysia: Relief package includes extended and expanded tax provisions (COVID-19)

Malaysia: Relief package

The Prime Minister on 18 January 2021 introduced a package of extended tax incentives and exemptions provided as economic relief measures in response to the coronavirus (COVID-19) pandemic. The Finance Minister then introduced a further tax deduction for employers.

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Highlights of the key tax measures in the relief package include the following.
 

Existing or proposed tax incentives and exemptions

Extension or expansion

Special tax deduction (rental deduction) of at least 30% of business premises rented to small and medium enterprises (SMEs) from April 2020 to March 2021 (subject to publication of the relevant rules in the official gazette)

  • Expanded to cover business premises rented to non-SMEs
  • Extended to 30 June 2021

Special tax relief of up to RM2,500 for purchases of personal computer, smartphone or tablet incurred from 1 June 2020 to 31 December 2020

Extended to 31 December 2021

Tax relief of up to RM8,000 for medical expenses incurred for the treatment of serious diseases suffered by the taxpayer, spouse and children and the cost of fertility treatment (including full medical check-up of RM1,000 and prescribed vaccination of RM1,000)

Expanded to cover COVID-19 screening

Sales tax exemption for purchase of passenger cars from 15 June 2020 to 31 December 2020, subject to conditions:

  • 100% on domestically assembled passenger cars
  • 50% on imported passenger cars

Extended to 30 June 2021

 

The condition of ownership to qualify for exemptions from excise duty and sales tax for the purpose of transfer, disposal and for private use of taxis reduced to five years (from seven years)

Extended from 1 January 2021 to 31 December 2021

 

Tax deduction on expenses incurred for COVID-19 testing

Double deduction allowed employers that fund the cost of COVID-19 screening for their employees in year 2021


The relief package also includes business initiatives such as enhancement of a wage subsidy for employers and electricity bill discounts for certain business sectors, among other items.

Read a January 2021 report prepared by the KPMG member firm in Malaysia

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