| Malaysia Income Tax Rates for Individuals Income Tax Rates For Resident Individuals for 2009
Taxable Income (RM) / Tax Rate (%) / Amount of Tax Payable (RM)
On the first 2,500: 0% 0
On the next 2,500: 1% 25
First 5,000 Total: - 25
On the next 15,000: 3% 450
First 20,000 Total: - 475
On the next 15,000: 7% 1,050
First 35,000 Total: - 1,525
On the next 15,000: 12% 1,800
First 50,000 Total: - 3,325
On the next 20,000: 19% 3,800
First 70,000 Total: - 7,125
On the next 30,000: 24% 7,200
First 100,000 Total: - 14,325
On the next 50,000: 27% 13,500
First 150,000 Total: - 27,825
On the next 100,000: 27% 27,000
First 250,000 Total: - 54,825
Exceeding 250,000: 27%
Non resident individuals are taxed at a flat rate of 27%
Malaysia Corporate TaxTaxable income of companies is subject to corporate tax at the rate of 25% in 2009.
Tax Treatment on Small and Medium Enterprises (SME): The first RM500,000 of chargeable income of a SME is taxed at 20%, with the balance being taxed at 25%.
A SME (small and medium enterprise) is defined as a company with a paid-up capital in respect of ordinary shares of RM2.5 million and below at the beginning of the basis period for the relevant year of assessment.
Petroleum Income Tax A person who signed Petroleum Agreement with Petronas or Malaysia-Thailand Authority and carry out petroleum operation. The Tax Rate is 38%.
"Person" includes a company, a partnership or other body of person and corporate sole.
"Petroleum operations" means searching for, winning or obtaining of petroleum in Malaysia (by drilling, mining, extracting etc), all operations incidental thereto and sale or disposal of petroleum so won or obtained, transportation within Malaysia of petroleum so won or obtained to any point of sale or export but excludes transportation outside Malaysia; refining or liquefying; dealing with products so refined or liquefied; service involving the supply and used of rigs, derricks, ocean tankers and barges.
Withholding Tax Non-resident persons
- Special classes of income (use of moveable property, technical services, installation services on the supply of plant and machinery, etc.): 10%
- Interest 15%
- Royalty 10%
- Contract payment on:
. account of contractor: 10%
. account of employee: 3%
- Other income such as commission, guarantee fees, agency fees, brokerage fees, introducers fees, etc.: 10%
Sales Tax Sales Tax rates in Malaysia are between 5 - 10%.
Sales tax is imposed on certain imported and locally manufactured goods under the Sales Tax Act 1972. The tax rate ranges from 5 - 10% for majority of the goods except for food preparations other than alcoholic and non-alcoholic compound preparations (other than those of heading No. 33.02) used for making beverages which falls under the tariff code 2106.90.490 with a tax rate of 20%.
Sales tax is also imposed on petroleum and petroleum products according to specific rates.
Service Tax Service Tax rate in Malaysia is 5%.
Service tax is imposed on taxable services provided by taxable persons. Services include services provided by professionals (such as lawyers, engineers, architects, surveyors, consultants), advertising firms, private hospitals, insurance companies, communication companies, hotels and restaurants.
Excise Duty Excise duty is levied on imported and locally manufactured goods under the Excise Act 1976. The goods are listed under the Excise Duties Order 2004. Goods include:
Motorcars: 75% - 105%
4 Wheel drives: 60% - 105%
Motor cycle: 20% - 30%
Intoxicating liquor: RM0.10 + 15% per litre - RM42.50 per 100% vol per litre + 15% per litre
Cigarettes: RM0.18 per stick + 20%
Rates of Capital AllowancesCapital allowances are given on qualifying capital expenditure. Initial allowances are given only once while annual allowances are given every year by the straightline method. Some of the items accorded allowances are shown below. For plant and machinery, companies are advised to verify with the Inland Revenue Board on the specific items which qualify.
Initial Allowances
Industrial buildings: 10%
Computer and IT equipment: 20%
Environmental control equipment: 40%
Heavy machinery & motor vehicles: 20%
Plant and machinery: 20%
Others: 20%
Annual Allowances
Industrial buildings: 3%
Computer and IT equipment: 40%
Environmental control equipment: 20%
Plant and machinery
. Motor vehicles, heavy machinery: 20%
. Plant and machinery: 14%
. Others: 10%
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