Malaysia’s budget for 2014 proposes a new goods and services tax (GST) to replace the existing sales tax and service tax regimes. The GST would be effective from 1 April 2015. It would be imposed at a rate of 6% (with some goods and services subject to GST at a rate of 0% or designated as exempt from GST).
The 2014 budget also proposes:
- Reductions in income tax rates, from 25% to 24%, for companies, limited liability partnerships, trusts, and estates of individuals domiciled outside Malaysia at the time of their death.
- Reductions of individual tax rates of 1% to 3% across various income bands.
- An extension of the 100% accelerated capital allowance on information technology and communication.
- A reduction (1% to 2%) in the income tax rates for cooperatives on taxable income above RM 150,000.
- An extension in the deadline (to the end of 2016) to apply for an income tax incentive for new investments made in certain hotels.
- Increased deductions for salaries, employee work-place benefits, and employee training provided by certain employers.
- Introduction of a “real property gains tax” at a rate of 0% to 30% for Malaysian citizens and permanent residents and at a rate of 5% to 30% for companies and non-Malaysian citizens.
