Goods and services tax (GST) at 5% as of 1 April 2015

The 2014 Budget was tabled on 25 October 2013 with the main objective of gearing Malaysia to becoming a high-income and developed nation by 2020. Taxand Malaysia discovers the key tax highlights of the 2014 Budget.

Goods and services tax (GST)

  • With the introduction of GST, the sales tax and service tax will be abolished
  • The GST will be at a rate of 6% and will be implemented on 1 April 2015. The annual sales threshold will be RM500,000. Those below the threshold can register on a voluntary basis
  • GST will be imposed throughout the supply chain, on goods and services supplied within the country or imported into the country

Corporate tax

  • The corporate income tax rate will be reduced from 25% to 24% with effect from the year of assessment (YA) 2016 as part of the GST package
  • For companies with paid-up capital of not more than RM2.5 million at the beginning of the basis period for a YA, the income tax rates applicable on the first RM500,000 of chargeable income will be cut by 1% from 20% to 19%
  • Any balance of chargeable income will be subject to tax at 24%

Real property gains tax (RPGT)

  • In response to the outcry to rein in runaway property prices, the Government has again revised the RPGT rate upwards, which will be effective from 1 January 2014
  • For companies and individuals, gains on disposal of real property during the first to third year, fourth and fifth year of purchase will suffer a higher RPGT at the rate of 30%, 20% and 15% respectively
  • Companies which dispose of property after the fifth year of purchase will be taxed at 5% whilst individuals will not be charged to RPGT on the gain
  • Non-citizen individuals will suffer RPGT at 30% on gains from property disposed of within the holding period of up to 5 years whilst disposals in the sixth year onwards will attract RPGT at 5%

Via The Malaysian Budget 2014.

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