Malaysia’s House of Representatives (Dewan Rakyat) have passed the Finance Bill 2024, Labuan Business Activity Tax (Amendment) (No.2) Bill 2024, and Measures for the Collection, Administration, and Enforcement of Tax Bill 2024 (the Bills) after the second reading on 4 December 2024.
This follows after Malaysia’s Deputy Minister of Finance presented the Finance Bill 2024 and the Labuan Business Activity Tax (Amendment)(No. 2) Bill 2024 to the Parliament on 19 November 2024.
The bills will be submitted to the Senate for approval. Once approved, they will be presented for royal assent.
The bills include various amendments such as a 2% tax will be imposed on dividend income over MYR 100,000 for individual shareholders in Malaysia from 2025, the introduction of a self-assessment system, and amending the “basis period” on the current year instead of the preceding year for Labuan entities for the year of assessment (YA) 2025, among others.
The Measures for the Collection, Administration, and Enforcement of Tax Bill 2024 will take effect on 1 January 2025.
This bill proposes that TIN (tax identification number) is not classified material, and Mandatory e-filing for amended income tax returns is mandatory, which will be effective for YA 2025. It also mentions that unauthorised use of a TIN outside the Income Tax Act 1967 is punishable by fines for up to MYR 4,000 and up to one-year imprisonment, or both. In addition, filing incorrect reports for information exchange can lead to fines ranging from MYR 20,000 to MYR 100,000.
