Lower Corporate Tax for Malaysian Small Companies in 2017
Updated on Wednesday 30th November 2016
The Budget for 2017 includes a set of beneficial changes for businesses. The corporate income tax will be reduced for those companies that have increased their revenue by at least five percent during the preceding tax year. Also, the Malaysian Government announced that it will make a one percent cut in the corporate income tax for those small businesses that register an income of up to 500,000 MYR.
Other changes included in the Budget for next year target the incentives offered to companies in Malaysia operating in certain business sectors. These tax allowances will be extended for investments in four and five-star hotels. Our lawyers in Malaysia can give you more information about how these incentives apply and how hotel operators in Malaysia can benefit from tax exemptions.
Islamic banks operating in Malaysia are also among those favored by the 2017 Budget. These financial establishments will be exempt from tax on income derived from Islamic banking activities until 2020.
Corporate taxation in Malaysia is calculated based on residency. A corporation is a Malaysian resident if it has its main place of management and control located in the country. The standard corporate tax rate is 24%, with a lower 10% rate applicable to small companies. Under the new budget cuts, this reduced rate for small entities will be 18% for qualifying companies.
Our lawyers in Malaysia can give you further information on the taxes applicable to companies and individuals deriving income from a Malaysian source.
You can contact us for details on other taxes on corporations.
The Malaysian Government has proposed a set of tax benefits for certain types of companies. The changes will be implemented starting with 2017 and are included in the Budget for next year. They will be addressed to those companies that manage to increase their annual revenues but they will also target small companies. An additional corporate income tax cut was included in the 2017 Budget and it will also apply to small companies up to a certain income value. The experts at our law firm in Malaysia are able to help you with further information on how these changes might influence your business.
Tax changes included in the 2017 Budget
The Budget for 2017 includes a set of beneficial changes for businesses. The corporate income tax will be reduced for those companies that have increased their revenue by at least five percent during the preceding tax year. Also, the Malaysian Government announced that it will make a one percent cut in the corporate income tax for those small businesses that register an income of up to 500,000 MYR.
Other changes included in the Budget for next year target the incentives offered to companies in Malaysia operating in certain business sectors. These tax allowances will be extended for investments in four and five-star hotels. Our lawyers in Malaysia can give you more information about how these incentives apply and how hotel operators in Malaysia can benefit from tax exemptions.
Islamic banks operating in Malaysia are also among those favored by the 2017 Budget. These financial establishments will be exempt from tax on income derived from Islamic banking activities until 2020.
Corporate taxation in Malaysia
Corporate taxation in Malaysia is calculated based on residency. A corporation is a Malaysian resident if it has its main place of management and control located in the country. The standard corporate tax rate is 24%, with a lower 10% rate applicable to small companies. Under the new budget cuts, this reduced rate for small entities will be 18% for qualifying companies.
Our lawyers in Malaysia can give you further information on the taxes applicable to companies and individuals deriving income from a Malaysian source.
You can contact us for details on other taxes on corporations.