Malaysia

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

28%. Exemptions and reductions are possible.

   
Tax rate on long-term capital gains In Malaysia, capital gains is taxed from 0% to 28%.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies There is no withholding tax for dividends which are taxable only in the country of the actual beneficiary.
   
Tax rate on branches The corporate tax is levied on branches as all the others companies.




Income tax

Fiscal year The fiscal year begins on January 1-st and ends on December 31 of the same year.
   
Income tax rate The progressive table of the income tax 2002 varies from 0% to 28%. The compulsory saving deducted at the source, owed by every employer and reserved for Employees Provident Fund is added to the income tax.
From 0 to 2,500 ringgits0%
From 2,501 to 5,000 ringgits1%
From 5,001 to 10,000 ringgits3%
From 10,001 to 20,000 ringgits3%
From 20,001 to 35,000 ringgits7%
From 35,001 to 50,000 ringgits13%
From 50,001 to 70,000 ringgits19%
From 70,001 to 100,000 ringgits24%
From 100,001 to 150,000 ringgits27%
From 150,001 to 250,000 ringgits27%
Beyond 250,000 ringgits28%
   
Tax deductions or other allowances 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.



VAT rates

Standard rates There is no VAT, but a tax on sales (GTS). Normal rate is 5%. Rate is 25% for cigarettes and 20% for wine and beer.
   



Other important taxes


Name of tax
Rate
Tax on royalties  
10%  
Land taxes  
Graded rate from 30% to 5%  
Tax on oil productions  
38%  


 

Accounting

Introduction
Malaysian accounting rules are governed by the law, "The Companies Act" of 1965", under the responsibility of the M.A.C.P.A.: " Malaysian Association of Certified Public Accountants".


Obligations and publications
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 debt accounts of the company.
Public companies have also to publish their statutory accounts to the shareholders during the annual meeting.

Certification and auditing
Independent accountants must analyze the financial statements of the companies.

Professionals and representative organizations
Accountants must be members of the "Malaysian Institute of Accountants" and registered as "Public or Licensed Accountant".



Useful links
For further information, please contact the MIDA as well as the Inland Revenue Board.

Last modified in 2006 - ongoing update
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