Malaysia: Tax proposals in budget for 2023, including domestic minimum top-up tax

Tax-related proposals

Includes domestic minimum top-up tax

Article Posted date 07 October 2022

The Minister of Finance today tabled the 2023 budget, which includes the following tax-related proposals:

  • 2% reduction of income tax rate (from 17% to 15%) on first RM100,000 of income for certain micro, small and medium enterprises
  • 2% reduction in individual (personal) income tax rate for individuals with taxable income ranging from RM50,001 to RM100,000, and 0.5% increase for individuals with taxable income ranging from RM250,001 to RM400,000
  • Extension to 20 years for certain companies to carry forward unabsorbed tax losses
  • Qualified domestic minimum top-up tax of 15% in 2024
  • Introduction of carbon tax—the government is evaluating the specific mechanism for the tax and no specific implementation date has been announced
  • Review of green technology tax incentives
  • Tax incentive for manufacturer of electric vehicle charging equipment
  • Tax incentives for carbon capture and storage
  • Tax incentive for rental of electric vehicle
  • Extension of certain existing tax incentives
  • Reinvestment allowance for hotels and selected tourism projects
  • Review of tax incentive for tour operators
  • Tax incentive for automation in manufacturing and services sector
  • Tax incentive for chicken rearing in closed house system
  • Stamp duty on exemption on loan restructuring or rescheduling
  • Import duty and sales tax exemptions on nicotine replacement therapy
  • Extension of import and excise duty exemptions on imported completely built units electric vehicles
  • Excise duty exemption on tourism vehicles
  • Extension of sales tax exemption on purchases of locally assembled buses
  • Expansion of excise duty and sales tax exemptions on sale, transfer, private use or disposal of individually owned taxis and hired cars
  • Import duty and sales tax exemptions on studio filming production equipment
  • Extension of import duty and sales tax exemptions period for certain shipbuilding and ship repairing companies
  • Implementation of e-invoicing

Read an October 2022 report [PDF 1.2 MB] prepared by the KPMG member firm in Malaysia

 

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