Saturday, December 17, 2011

MALAYSIA BUDGET 2012 SUMMARY

INDIVIDUAL INCOME TAX

Personal relief


YA 2012 
YA 2011
EPF & Life insurance premium
RM6,000 
RM6,000 
Premium on annuity insurance 
RM3,000
RM1,000 
Private retirement scheme


Note:
Tax relief of RM3,000 is given to contributions made by individuals to Private Retirement Scheme approved by the Securities Commission and annuity premium. 
(For 10 years YA 2012 – 2021)

Preferential tax rates for returning expert
Income tax charged on chargeable income of individual under Returning Expert Programme in respect of employment income in Malaysia will be taxed at a flat rate of 15% for a period of 5 years, effective from YA 2012.

COMPANY INCOME TAX

Private Retirement Fund

-      Tax deduction on contribution made by employer for employees to Private Retirement Fund.
-      The deduction is given up to 19% of employees’ remuneration and includes contributions to EPF and approved scheme under section 150 Income Tax Act 1967
(Effective from YA 2012)

Tax deduction of Franchise Fee

-       Deduction on one-off payment of franchise fees for local franchise brands prior to the commencement of franchise business.
(Effective from YA 2012)

Double deduction for structured internship programme

-       Double deduction is given on expenses incurred by companies that implement the structured internship programme. The qualifying criteria for this programme among others are as follows:

a)      The internship programme is for full time undergraduate students from the Public/Private Higher Educational Institutions; and
b)      Internship programme is for a minimum period of 10 weeks with a monthly allowance of not less than RM500.
(Effective from YA 2012 until 2016)

Double deduction of scholarship

Double deduction allowed on expenditure incurred by private companies to Malaysian Student:

-          Not its former employees
-          Citizen and resident in Malaysia
-          Attending full time course for diploma and bachelor’s degree in local institutions of higher learning
-          Have no sources of income
-          Total monthly income of parents or guardian does not exceed RM5,000.
(Effective from YA 2012 until YA 2016)

Duty To Prepare Statement to Agent, Dealer or Distributor

-          Company must provide to its agent, dealer or distributor particulars of payment made in prescribed form.
-          Agent, dealer or distributor means person authorised by company and received payment (whether in monetary form or otherwise) from company arising from sales, transactions or schemes
-          The form must be provided to agent, dealer or distributor not later than 31 March of following year.
(Effective from 1.1.2012)

Time Bar For Tax Audit

-          Time bar for tax audit reduced from 6 years to 5 years.
-          The 5 year period is not applicable to cases of fraud , wilful default or negligence.
(Effective from YA 2013)

 Compensation for late refund of income tax by the IRB
Compensation of 2% is payable if refund of over-payment under Section 111 is made:

(a)   After 90 days from the due date for e-Filing; or
(b)   After 120 days from the due date for manual filing

Compensation on late refund not applicable to:

(a)   Late submission of tax return
(b)   Repayment due to Section 110 set-off on dividend income
(c)    Discharged or reduced assessment on appeal
(Effective from YA 2013)

REAL PROPERTY GAIN TAX

The Real Property Gains Tax rates on the gains from the disposal of residential and commercial properties be revised as follows:


1.1.2010 – 31.12.2011
1.1.2012 onward

Individual
Company
Individual
Company
Disposal within 2 years
5%
5%
10%
10%
Disposal within 3-5 years
5%
5%
5%
5%
Disposal in the 6th year and thereafter
Nil
Nil
Nil
Nil