Retabled Budget 2023: Tax Measures that May Affect You - YH TAN & ASSOCIATES PLT

Retable Budget

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Retabled Budget 2023: Tax Measures that May Affect You

Corporate tax	The corporate income tax rate is reduced up to 2% for Micro, Small & Medium Enterprises (MSMEs)	The corporate income tax rate is reduced up to 2% (17% to 15%) for MSMEs. The reduction in tax rate is applicable for the first RM150,000 of chargeable income of YA 2023. On the other hand, tax rates for exceeding chargeable income are kept at 17% and 24% respectively:
	Capital Gains Tax	The introduction of a low rate capital gains tax on the disposal of shares (unlisted) by companies is studied. It is expected to be effective from 2024
	Reduction of Tax for the sponsorship of smart Artificial Intelligence (AI) – Driven Reverse Vending Machine	If a company or individual donates or sponsors AI-Driven Reverse Vending Machine, it can enjoy a tax deduction. The Ministry of Finance will receive applications from 1 Apr 2023 till 31 Dec 2024.
	Tax Deduction for contributing to non-profit organisations working on conducting sports development programmes	Companies contributing to non-profit organisations associated with conducting sports development programmes can get a tax deduction of up to 10%.
	Tax Deduction for the company renting non-commercial Electric Vehicle (EV)	A company renting a non-commercial EV can seek a tax deduction on the total rental amount of up to RM300,000. The deduction will be applicable from YA 2023 to YA 2025.
	Double deduction for child care	It is proposed that the double tax deduction is proposed for the employers with reference to the following expenses: Provision and maintenance of child care centres; and Child care allowances paid to the employees
Individual Tax	Review of individual income tax rates	The tax rate would be reduced by 2% for those that fall in the specific income bands (RM35,000 to RM100,000). The reduction would be effective from YA 2023. The tax rates for chargeable income bands between RM100,000 to RM1 million would be increased. The increase would be effective from YA 2023.
	Tax relief extended for kindergarten and childcare centres fees	Tax relief for the kindergarten and childcare centres fees (up to RM3,000) will be extended until YA 2024.
	Income tax relief expanded for expenses incurred on medical treatment	The income tax relief scope is expanded for YA 2023. It now includes medical treatment expenses such as intervention expenditure for Autism, Attention Deficit Hyperactivity Disorder (ADHD), Down Syndrome and Specific Learning Disabilities, Intellectual Disability, Global Developmental Delay (GDD). These medical expenses are limited to RM4,000. It also covers diagnostic assessments certified by a registered medical practitioner. With the expansion of this scope, it is proposed that the amount of tax relief for medical treatment expenses could be increased from RM8,000 to RM10,000.
Stamp Duty	Stamp duty for transfer of property between family members	Depending on the value of the property, stamp duty for up to RM1 million will be exempted. In addition, there is a 50% remission on the remaining stamp duty. It involves the transfer of property between parents and children or grandparents and grandchildren. The recipient of the property should be a Malaysian citizen; this rule is applicable to the instruments of transfer that are executed from 1 April 2023.
	Stamp duty for scholarship agreement / educational loan	At present, a fixed stamp duty of RM10 is charged on a scholarship agreement or educational loan. It is also proposed to expand the imposition of fixed stamp duty on scholarship agreements / educational loans to seek education at all levels. It includes certificates (skills / education / professionals) in any educational and training institutions. The scholarship agreement / educational loan should be executed from 1 June 2023.
	Stamp duty exemption extended to the restructuring or rescheduling of financing agreement / loan	To lower the cost of borrowing and to improve the cash flow of the borrowers, a full stamp duty exemption is proposed. This exemption will be granted on the rescheduling or restructuring of the financing agreement / loan for a term of 2 years.
Others	Luxury tax on branded goods	A tax is imposed on specific luxury goods with effect from 2023. A few of these luxury goods include fashion items and branded watches. The details regarding the rate, coverage, or definition would be fine-tuned by the Malaysian government.
Others	Special Voluntary Disclosure Program (SVDP)	In the past (November 2018 to September 2019), the Inland Revenue Board (IRB) introduced SVDP. This program offered penalty remissions to the taxpayers on the following: Expenses over claimed / not allowed, undeclared income / under-declared, and over-claimed reliefs / deductions / rebates; Gains on the disposal of assets (real shares and properties in real property companies); Transfer pricing matters; and Stamping of those instruments that weren’t stamped previously. A 100% waiver of penalty on unpaid taxes is also proposed. The waiver could be availed from 1 June 2023 to 31 May 2024.