Details

Published: 01 December 2020

With reference to the Malaysia Budget 2021, the employee’s Employees Provident Fund (EPF) share of the statutory contribution rate will be reduced from 11% to 9% with effect from the salary month 1 January 2021 to 31 December 2021 (or EPF contribution month 02/2021 to 01/2022).

This new statutory contribution rate for employees applies only to members below 60 years old who are liable for contribution. For members aged 60 years old and above, the statutory contribution rate for employees remains unchanged.

Employers can complete the KWSP 17A Khas 2021 and submitt via i-Akaun (Employer), which will begin from 14 December 2020. Employers are also required to keep the form received for their record.

** The KWSP 17A Khas 2021 can be downloaded from https://www.kwsp.gov.my/documents/20126/147525/Borang+KWSP+17A+%28Khas+2021%29.xlsx

Details

Published: 08 November 2020

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1. Proposed Income Tax Rate (With effect from YA2021)
   

   Chargeable Income	Current
   	Tax Rate (%)	Tax Payable (RM)
   0 – 5,000	0	-
   5,001 – 20,000	1	0*
   20,001 – 35,000	3	200*
   35,001 – 50,000	8	1,8000
   50,001 – 70,000	13	4,400
   70,001 – 100,000	21	10,700
   100,001 – 250,000	24	46,700
   250,001 – 400,000	24.5	83,450
   400,001 – 600,000	25	133,450
   600,001 – 1,000,000	26	237,250
   1,000,001 – 2,000,000	28	517,250
   2,000,001 and above	30

2. Tax Relief on Expenditures on Medical Treatment, Special Needs and Parental Care (With effect from YA2021)
   
   • Income tax relief up to RM8,000 is eligible to be claimed by individual taxpayer on medical expenses and parental care limited to the following expenses:
     • Treatment in clinics and hospitals
     • Treatment in nursing homes
     • Dental treatment not including cosmetics dental treatment
     • Treatment and care at home, day care centres and home care centres
3. Tax Relief for Medical Treatment Expenses for Self, Spouse and Child (With effect from YA2021)
   • To alleviate the cost of medical treatment of taxpayer, spouse and child, and to encourage more Malaysians to be vaccinated, it is proposed that:
     • The limit of tax relief on medical expenses for serious diseases for taxpayer, spouse and child fertility treatment for taxpayer and spouse be increased from up to RM6,000 to up to RM8,000
     • The limit of tax relief for full medical check-up expenses be increased from up to RM500 to up to RM1,000
     • The scope of tax relief for medical treatment expenses be expanded to include vaccination expenses up to RM1,000 for tax payer, spouse and child. The vaccines eligible for the tax relief are as follows:
     •  Pneumococcal
     • Human Papillomavirus (HPV)
     •  Influenza
     •  Rotavirus
     •  Varicella
     •  Meningococcal
     • Combination of tetanus-diphtheria-acellular pertussis (Tdap)
     • COVID-19 (subject to the availability of the vaccine)
4. Income Tax Relief for Disable Spouse (With effect from YA2021)
   • An individual taxpayer with a disabled spouse is given an additional tax relief of RM5,000
5. Income Tax Relief on Contribution to Private Retirement Scheme (For YA2020 to YA2025)
   • Income tax relief of up to RM3,000 on contribution to Private Retirement Scheme (PRS) is eligible to be claimed annually by individual taxpayers
6. Income Tax Relief for Lifestyle (With effect from YA2021)
   • Income tax relief limit for lifestyle up to RM2,500 is provided to an individual taxpayer on the purchase of reading materials including e-book, printed daily newspapers, computers, smartphones/tablets, internet subscriptions, sports equipment and gymnasium membership fees
   • Another RM500 is allocated for the cost of purchasing sports equipment, entry/rental fees for sports facilities and participation fees in sports competitions
   • Scope of relief for printed daily newspapers be expanded to include subscription for electronic newspapers
7. Income Tax Relief on Net Annual Savings in the National Education Savings Scheme (For YA2020 to YA2022)
   • Income tax relief of up to RM8,000 is given to an individual taxpayer for net annual savings in the National Education Savings Scheme (SSPN)
8. Income Tax Relief for Expenses on Study Fees (With effect from YA2021 to YA2022)
   • The tax relief is up to a maximum of RM7,000 a year
     

     Level of Study	Field of Study
     Certificate / Diploma / Bachelor	Law, accounting, Islamic finance, skills or vocational, technical, industrial, scientific and technological skills
     Master / Doctorate	All fields
     Others	Attending up-skilling and self-enhancement courses in any field of  skills recognised by the Department of Skills Development, Ministry of Human Resources (maximum RM1,000)

9. Income Tax Relief on Compensation for Loss of Employment (For YA2020 to YA2021)
   • Full exemption on income tax on compensation for loss of employment if the Director General of Inland Revenue is satisfied that the compensation is received due to health problems
   • Exemption on income tax RM20,000 for each full year of service with the same employer or companies within the same group
10. Stamp Duty Exemption for the Purchase of First Residential Home (For SPA executed from 1 January 2021 o 31 December 2025)
    • 100% stamp duty exemption on instrument of transfer and loan agreement for the purchase of first residential home priced up to RM500,000 (by Malaysian citizens)
11.  Tax Incentives for Companies Relocating Their Operations to Malaysia and Undertaking New Investments (For manufacturing sector, applications received by the Malaysian Investment and Development Authority until 31 December 2022)
    

    Investment in Fixed Asset	New Companies		Existing Companies
    	Tax Incentive	Period	Tax Incentive	Period
    RM300 million – RM500 million	Income Tax Rate 0%	10 years	Investment Tax Allowance 100%	5 years
    Above RM500 million		15 years

    • Conditions:
      • The company incurring its first capital expenditure within 1 year from the date of the approval of the incentive
      • The company meeting the investment in fixed asset within 3 years from the first date of the capital expenditure incurred
12. Tax Incentives for Companies Relocating Their Operations to Malaysia and Undertaking New Investments (For selected services sector, applications received by the Malaysian Investment and Development Authority from 7 November 2020 until 31 December 2022)
    • New Company - Income tax rate of 0% to 10% for a period up to 10 years
    • Existing Company with new services segment – Income tax rate of 10% for a period up to 10 years
      • The scope of tax incentives be expanded to companies in selected services sector including companies adapting Industrial Revolution 4.0 and digitalisation technology with investment that contribute to significant multiplier effect in the following services:
        • Provision of technology solution, or more typically technology company which develops technology and provides technology solutions based on substantial scientific or engineering challenges
        • Provision of infrastructure and technology for cloud computing
        • Research development / design and development activities
        • Medical devices testing laboratory and clinical trials
        • Any services or manufacturing related services as determined by the Minister of Finance
13. Special Income Tax Rate Treatment for Non-Resident Individuals Holding Key Positions in Companies Investing in New Strategic Investments (Applications received by the Malaysian Investment and Development Authority from 7 November 2020 until 31 December 2021)
    • Flat rate 15%:
      • Malaysian citizens who are categorised as experts and approved under the Returning Expert Program and return to work in Malaysia
      • Individual knowledge workers in Iskandar Malaysia
      • Individual knowledge workers in Malaysia-China Kuantan Industrial Park
      • Individual holding key positions / C-Suite positions for a period of 5 consecutive years
      • Receiving a monthly salary of less than RM25,000
      • Malaysian tax resident for each year of assessment

Details

Published: 07 November 2020

• Bantuan Prihatin Rakyat (BPR)
  • Monthly Household Income 家庭月收入 ≤RM2,500 - RM1,200 for 1 child, RM1,800 for more than 1 children
  • Monthly Household Income 家庭月收入 RM2,501 to RM4,000 - RM800 for 1 child, RM1,200 for more than 1 children
  • Monthly Household Income 家庭月收入 RM4,001 to RM5,000 - RM500 for 1 child, RM750 for more than 1 children
  • Single (≥21 years old) ≤RM2,500 - RM350 
• Reduce 1% income tax rate (to become 13%) for chargeable income between RM50,001 to RM70,000 降低RM50,001至RM70,000应课税收入1%个人所得税率（至13%）
• Reduce EPF contribution rate employee portion from 11% to 9% 降低雇员部分的公积金率至9%
• Withdraw RM500 from account 1 from Jan'21 for a period of 12 months 从公积金第一户口每个月提取RM500，为期12个月
• Withdraw from account 2 to purchase insurance and takaful products 从公积金第二户口提取以购买保险
• Lifestyle tax relief expand to electronic newspaper subscription and additional RM500 for expenditure related to sports (including participating fee for sports competitions) 
• Extend 3 months job search incentive 延长求职津贴3个月：First month 80%, Second month 5%, Third month 3%
• Extand wage subsidy program specifically for tourism sector (including retail sector) for 3 months 求职津贴延长3个月：RM600 per month for up to 500 employees
• Appreticeship program 学徒计划：RM1,000 incentive up to 3 months for participant, RM4,000 training programs claim for employer
• Jaringan PRIHATIN programme：B40 will receive RM180 telecommunication credit for by Q1 2021 (used for internet subscription or buy a new mobile phone)
• eBelia Programme: One off RM50 to e-wallet account (aged 18 to 20 years) 一次性RM50至电子钱包户口（18至20岁）
• Targeted loan repayment assistant (TRA) - Moratorium instalments for 3 months 暂还3个月 OR reduce 50% of monthly repayment for 6 months 或是为期6个月减少50%分期付款 to borrowers who are BSH recipients or BPR AND micro enterprises with loans of up to RM150K
• Simplied TRA for M40 - Just make a self-declaration of the reduction of income 自我声明收入减少

Details

Published: 06 October 2020

A gentle reminder on the submission and payment due date for payroll contributions for the salary month Sep'20

HRDF exemption has ended on Sep'20 (salary for Aug'20). Please remember to pay before 15/10/2020 for Sep'20 salary.

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Published: 15 October 2020

Wage Subsidy Program (WSP) 2.0 has been opened for apply since 01/10/2020. Let us summarize the key updates of this program.

1. Income tax number is mandatory
2. PSU declaration form has been updated to PSU 2.0 declaration form
3. Shall fill in the revenue for current year and the same month in the previous year
4. Shall declare whether the employee is requested to take unpaid leave
5. Please choose tuntutan 7 if you are going to extend the WSP 

• Although RMCO start from 10 June 2020, the system only allows to compare revenue of Aug’20 to Dec’20 (with the same month of the previous year)

Other updates:

1. The subsidy is only RM600 per employee for each month
2. The company must experience at least 30% sales drop (compare with the same month in the previous year) between August to December