On 3 April 2023, the Dewan Rakyat passed the Finance Bill 2023 with the following key amendments related to corporate tax measures.
Effective from YA 2023, it has been proposed to reduce the preferential tax rate for MSMEs by two percentage points for the first RM150,000 of taxable income. For taxable income from MYR150,001 to 600,000, the tax rate is 17%. The standard tax rate of 24% applies if taxable income exceeds MYR 600,000.
In order to qualify for preferential tax rates, an additional condition has been proposed stating that effective YA 2024 no more than 20% of the paid-up capital in respect of common shares or the entire capital contribution of the MSME may be paid at the beginning of the base period for a YA may be directly or indirectly owned or contributed by (a) non-Malaysia based companies or (b) individuals who are not Malaysian citizens.
