On 31 December 2021, the finance act 2021 was gazetted providing following tax measures. The Finance Bill was tabled in Parliament on 9 November 2021 incorporating a number of announcements made in the Budget 2022.
- Abolish income tax exemption on foreign-source income-from 1 July 2022 onwards, the income will be taxed at the prevailing tax rates.
- Extend the time period for carrying forward unabsorbed business losses from 7 to 10 years.
- Extend the time period to carry forward and use special reinvestment allowances for an additional two years, commencing from YA 2025.
- Impose withholding tax at a rate of 2% on payments made to an agent, dealer or distributor who have received more than RM100,000 with effect as of 1 January 2022.
- The income tax rebate of up to RM20,000 per Year of Assessment (YA), for the first three (3) YAs will be extended for new Companies/ LLPs established and commencing operations by 31 December 2022.
- A 10 % penalty on the tax payable for a YA will be imposed on LLPs for failure to submit the tax estimates.
