Accounting Rules

Tax Year: The tax year begins on January 1 and ends on December 31 of the same year.
Accounting Standards: Public companies listed on the Stock Exchange have adopted FSR standards (Financial Reporting Standards), and the others the PERS standards (Private Entity Reporting Standards).
Accounting Regulation Bodies: Malaysian Accounting Standards Board
Accountant General's Department of Malaysia
Accounting Reports: Financial statements must include notes and policies, and they are composed of four declarations which appear in the annual report: a declaration of income, a balance sheet, cash flows, the movement of stocks.
Publication Requirements: According to the law all companies have to publish the following recordings : shareholders' details, details concerning the members of the board of directors, details concerning the expense account and the debt accounts of the company.
Public companies have also to publish their statutory accounts to the shareholders during the annual meeting.
Professional Accountancy Bodies: Malaysian Institute of Accountants
MICPA , Malaysian Institute of Certified Public Accountants
Certification and Auditing: Independent accountants must analyze the financial statements of public companies. For additional information.
Accounting News: Accountants Today website from the Malaysian Institute of Accountant

Tax Rates

Consumption Taxes

Nature of the Tax: Sales tax and services tax.
Tax Rate: Sales tax is due on taxable goods manufactured or imported by any natural person or legal entity. The present rates of this tax are 5% (non essential food, building materials for exemple) and 10% (normal general rate).
Reduced Tax Rate: Sales tax exemption for bus operators on purchase of locally assembled buses. Sales tax exemption on solar system equipment system for usage by third parties be given to importers.

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Corporate Taxes

Company Tax: 0.25
Tax Rate For Foreign Companies: Sales tax apply to non-residents.
Capital Gains Taxation: The tax rate on company profits is 25%.
Main Allowable Deductions and Tax Credit: The tax on SMEs is 20% on taxable profits up to 500 000 MYR, the balance being taxed at 26%. Only the deduction of spending carried out totally and exclusively in connection with profits is authorized. Losses can be deducted whatever the source for the same financial year: revenue from exploitation, dividends, holdings etc. They can be carried forward indefinitely to be deducted later.
Other Corporate Taxes: Companies carrying out activities upstream of the petroleum industry are taxed at 38% (petrol income tax).
Excise duties are levied on selected products manufactured in Malaysia, namely cigarettes, tobacco products, alcoholic beverages, playing cards, mahjong tiles and motor vehicles.

Individual Taxes

Tax Rate

Individual income tax	Progressive rates from 0% to 26%
Up to RM 2,500	0%
RM 2,501 - 5000	1%
RM 5001 - 20 000	3%
RM 20,001 - 35,000	7%
RM 35,000 - 50,000	12%
RM 50,000 - 70,000	19%
RM 70,000 - 100,000	24%
RM 150 000 and over	26%

Allowable Deductions and Tax Credit: Deductions attributed to taxpayers in Malaysia are the following:
-Annual personal fixed deductions of 5,000 ringgits.
-Deductions by couple of 3,000 ringgits.
-Deductions for single people of 800 ringgits
-Deduction of 110 ringgits for incomes equal or under 10,000 ringgits.
Non-residents do not have access to these tax deduction allowances in Malaysia. However the non-residents citizens in Malaysia have their own deductions and reductions.
Special Expatriate Tax Regime: Expatriates posted to an OHQ (operational headquarters) or a representative office are only taxed on the part of their income attributable to the days they spend in Malaysia.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: See the list of the conventions signed on the website of the Ministry of Taxation.
Withholding Taxes: Dividends: 0%, Interest: 15%, Royalties: 10%

Sources of Fiscal Information

Tax Authorities: Malaysian Customs
Inland Revenue Board
Other Domestic Resources: Malaysian Industrial Development Authority

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Intellectual Property

National Organizations: Inside the Ministry of Trade and Consumption (Kementerian Perdagangan Dalam Negeri Dan Hal Ehwal Pengguna) the Enforcement Division deals with problems of counterfeiting and pirating.
The central organization in charge of the protection and promotion of intellectual property rights is the Malaysian Intellectual Property Corporation (MyIPO). The appliction for a patent must be directly presented in Malaysia and will cover the whole country. Inventions can only be patented if they are new, not obvious and have an industrial application. A patent expires after 15 years but it can be extended in certain cases.

In order to register a trademark, it is necessary to seek its registration from the Registrar of Trade Marks and to indicate a user of the brand in the country. As soon as the trademark is registered, it becomes protected and its use is continuous.
Regional Organizations: Malaysia is a signatory to the ASEAN framework agreement on cooperation regarding intellectual property.
International Membership: Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)

National Regulation and International Agreements

Type of property and law	Validity	International Agreements Signed
Patent Law on Patents 1983 (amended 1993)	20 years	Patent Cooperation Treaty (PCT)
Trademark Law on Trademarks 1976 (amended 1994 and completed 1997) Standards and regulations for trademarks 1983	10 years renewable without limit
Design Law on designs and industrial models 1996	5 years renewable twice
Copyright Law on copyright 1987	Either up to 50 years after the author's death or 50 years after the first publication or the creation of the work	Berne convention For the Protection of Literary and Artistic Works
Industrial Models Law on designs and industrial models 1996	5 years renewable twice

Legal Framework

Independence of Justice: There is excessive influence of the executive over the judiciary.
Equal Treatment of Nationals and Foreigners: Not guaranteed.
The Language of Justice: The judicial language used in the country is Bahasa Malaysia.
Recourse to an Interpreter: Having an interpreter is possible.
Sources of the Law and Legal Similarities: The main source of the law in Malaysia is the constitution of 1957 (amended in 1963). The country's legal system is based on English common law and the judicial review of legislative acts in the Supreme Court. Islamic law is applied to Muslims in family matters. Each state in Malaysia has its own constitution which sometimes results in variations of law from state to state. Malaysia has not accepted compulsory ICJ jurisdiction.
Checking National Laws Online: Attorney General's Chambers

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Standards

National Standards Organizations: Department of Standards Malaysia (DSM)
Integration in the International Standards Network: Malaysia is a member of the International Organization for Standardization, the International Electrotechnical Commission, the International Telecommunication Union and the Codex Alimentarius Commission. Considerable progress has been made in harmonizing Malaysian standards with international standards, in accordance with Malaysia's obligations which ensue from the OTC agreement with the WTO. Malaysia is also working on negotiating mutual recognition agreements with several APEC economies, basing itself on guidelines established by the international organizations.
Classification of Standards: The Malaysian standard is the NM.
Online Consultation of Standards: Standards can be consulted on the website Malaysia Standards Online Store (registration required).
Certification Organizations: Department of Standards Malaysia (DSM)
Standard and Industrial Research Institute of Malaysia

Business Practices

General Information
Opening Hours and Days: Banks: from 10 am to 3 pm, Monday to Friday, from 9.30 am to 11.30 am on Saturday.
Public Administration: from 8 am to 1 pm and 2 pm to 4 pm Monday to Thursday, 8 am to 1 pm and 2.45 pm to 4 pm on Friday, from 8 am to 1 pm on Saturday.
Shops: from 10 am to 9.30 pm Monday to Sunday for large stores and 9 am to 6 pm for small shops.
During the month of Ramadan, economic activity is considerably reduced and working hours change.

Public Holidays

New Year's Day	1 January
Hari Raya Qurban	February
Awal Muharam	February
Birth of the Prophet Mohammed	15 February
Labor Day	1 May
Wesak Day	May
Birthday of the King	4 June
National Day	30 - 31 August
Malaysia Day	16 September
Deepavali	October - November
Hari Raya Puasa	November
Christmas Day	25 December

Holiday Compensation: If a public holiday falls on a Saturday or Sunday, the Monday is a holiday instead.

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Malaysia: Business Environment