MALAYSIA BUDGET 2010 SUMMARY

INDIVIDUAL INCOME TAX

	YA 2010	YA 2009
Personal relief	RM9,000	RM8,000
EPF & Life insurance	RM6,000	RM6,000
Premium on annuity insurance	RM1,000	-
Broadband subscription fee	RM500	-
Chargeable income ≥RM100,000	26%	27%

INTEREST INCOME EXEMPTION
Interest paid or credited to any individual, unit trust and listed closed-end fund are tax exempt:

1. Securities, bonds issued/guaranteed by the government
2. Debentures, Islamic securities approved by Securities Commissions.

Tips: You may invest in Islamic securities (average return 6% - 7% p.a.) instead of fixed deposit of 2.5% p.a.

TAX INCENTIVE FOR KNOWLEDGE WORKERS IN ISKANDAR MALAYSIA
Knowledge workers in Iskandar Malaysia to pay a flat 15% income tax & in the following qualify activities:-

1. green technology;
2. biotechnology;
3. educational services;
4. healthcare services;
5. creative industries;
6. financial advisory and consulting services;
7. logistics services; and
8. tourism.

(w.e.f 24 Oct 2009 – 31.12.2015)


SERVICE TAX ON CREDIT CARDS AND CHARGE CARDS
Credit card issued or renewed from 1 January 2010

• RM50 per year on the principal card
• RM25 per year on the supplementary card.

TAX INCENTIVES FOR SMALL AND MEDIUM ENTERPRISES (SME) TO REGISTER PATENTS AND TRADEMARKS
Expenses incurred in the registration of patents and trademarks in the country are allowed as a deduction for the purpose of income tax computation.


FORM E & FORM EA SUBMISSION
Every employer shall furnish the Form E not later than 31 March in the year immediately following year containing:-

1. No of employees
2. No of employees subject to monthly tax deduction
3. No of new employees
4. Number of employees who are resigned
5. Number of employees who are resigned and left Malaysia.

Every employer requires to give every employee a yearly remuneration statement (Form EA) on or before the last day of February in the year immediately following year.
Note : Previously the above requirement not included in the Income Tax Act 1967. For Form E 2009 the last day of submission will be 31 March 2010.


NEW COMPANY
Company upon commencement of business for a year of assessment < 6 months
   - Not require to furnish estimates for that year of assessment
   - Not require to pay instalment for that year of assessment
Note : The above requirements only apply to non SME. Where a SME first commences operations in a year of assessment, the SME not required to furnish an estimate of tax payable or make instalment payments for a period of two years beginning from the year of assessment in which the SME commences operations.


TAX INCENTIVES FOR BUILDINGS OBTAINING

GREEN BUILDING INDEX CERTIFICATE
To encourage the construction of buildings using green technology, it is proposed that:

1. owners of buildings awarded the GBI certificate be given tax exemption equivalent to 100% of the additional capital expenditure incurred to obtain the GBI certificate.
2. buyers of buildings and residential properties awarded GBI certificates bought from real property developers are eligible for stamp duty exemption on instruments of transfer of ownership of such buildings

(w.e.f 24 October 2009 to 31 December 2014)


REAL PROPERTY GAIN TAX
Effective from 1 January 2010, the government will re-impose real property gain tax (RPGT) for gains arising from disposal of property. (RPGT exemption period : 1.4.2007 – 31.12.2009). The following are the new RPGT tax rate (as per Finance Bill 2009):-

	Individual	Company	Effective rate after exemption order
Disposal within 2 years	30%	30%	5%
Disposal in the 3rd year	20%	20%	5%
Disposal in the 4th year	15%	15%	5%
Disposal in the 5th year	5%	5%	5%
Disposal in the 6th year and thereafter	5%	5%	5%

For non-citizens and non-permanent resident individuals, gains from the disposal of real property within five years are taxed at a flat rate of 30%, after which the tax rate will be 5%.(Note : Finance Ministry clarified that the Real Property Gains Tax, effective January 1 next year, is fixed at 5 per cent, irrespective of the property disposal year & will be implemented through the Real Property Gains Tax (Exemption) Order 2009)Major change:

	After amendment	Before amendment
Individual disposal property after 5 years	5% tax	Exempted
Individual exemption	RM10,000 or 10% of chargeable gain, whichever is greater	RM5,000 or 5% of chargeable gain whichever is greater
File in RPGT return	Within 60 days of the date of disposal	Within 30 days of the date of disposal
Duty of acquirer	Retain 2% of the total value of the consideration & pay the amount to IRB within 60 days after the date of disposal	Retain 5% of the total value of the consideration & pay the amount to IRB until receives clearance from IRB.
Interest expenses	Not part of the incidental costs	Part of the incidental costs

GOODS AND SERVICE TAX

The Government will implement the Goods and Service Tax (GST) soon; the tax rate will be below 5%. Company should start looking into incorporating GST feature into accounting system.
Before the GST implemented, normally the Government will be given 12 to 18 months to public and businesses to familiar and prepares themselves for its.


OTHERS

1. Employees EPF contributions will be raised again to 11 per cent on a voluntary basis with immediate effect. However, from Jan 1, 2011 employees' EPF contribution will revert to 11 per cent.
2. 1Malaysia retirement scheme for self-employed, run by EPF. For every RM100 contribution, govt to contribute 5pct, maximum RM60.