Understand 2020 Malaysian Budget Proposal
What is shown here is the prepared budget according to the Budget 2020 speech made last October 11, 2019. The principal tax proposals that affects or that are relevant to SME and Individual Tax Payers.
Corporate Income Tax Used for Small and Medium Enterprises (SME)
The Current One:
- SME is a Company resident in the country with a paid-up capital that does not exceed to RM2.5 million
- It is subject to an income tax rate of 17% according to the first chargeable income of RM500,000. Meanwhile, the rest of the chargeable income has 24% tax.
The Budget Proposal of 2020:
- The qualifying expenditure of the SVA will now be increased to RM2,000 from RM1,300.
- For the non-SMEs, then the total limit of the SVA will be increased to RM20,000 from RM13,000 for every assessment year.
Tax Deduction
- The secretarial fee can be up to RM5,000 each assessment year.
- Tax filing fee is up to RM10,000 for each assessment year.
Individual Income Tax Rate Change
The Current One:
- The tax rate of a resident individual who has a chargeable income that is not more than RM2 million is at 28%
- The tax rate a non-resident individual must pay for is 28%
2020 Budget Proposal:
- Tax rate for an individual resident who has a chargeable income that exceeds RM 2 million will then go up to 30%
- The non-resident individual tax rate will then be increased to 30%
Interesting Features of the 2020 Budget Proposal:
- The tax deduction on the listing cost of Bursa Malaysia is up to RM1.5 million for the ACE Market and LEAP Market.
- The development of Intellectual Property (IP) tax incentives, 100% tax exemption is for 10 years as long as the IP was developed in Malaysia.
Disclaimer
This is a piece of tax information issued by malaysiataxation.com. We make no representations or guarantee the accuracy, suitability, reliability, or completeness of this information for any purpose while every care has been taken in compiling this information. Malaysia Taxation, its agents and employees accept no accountability, and disclaim all responsibility, for the consequences of anyone acting, or refraining from working, in reliance on the information contained in this book or for any conclusion based on it. Further, recipients shouldn’t act upon it without seeking specific advice tailored to your circumstances, requirements or needs.
