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Malaysian Budget 2017: Ensuring Unity, Economic Growth, Inclusive Prudent Spending and Well-Being of the Rakyat.
Budget 2017 was announced on 21st October 2016 and while we are still waiting for the Finance Act and Appendices to be published to fully identify all the changes, we summarize the key announcements relevant to our SME readers and valued associates here: –
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PERSONAL TAX – NEW TAX RELIEFS
Tax relief of RM1,000 for purchasing breast-feeding equipment, claimable every 2 years.
Tax relief up to RM1,000 for parents sending their children aged 6 and below to registered nurseries and pre-schools start from year of assessment (YA) 2017
Tax relief up to RM2,500 yearly effective YA 2017 for lifestyle purchases – these include purchases of reading materials, computers, sports equipment, printed newspapers, smartphones and tablets, internet subscription and gym membership fees. (previously this was split into separate reliefs)
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BR1M 2017
BR1M to be increased in year 2017.
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CORPORATE TAX
- Reduce tax rate between 1 and 4 percentage points for companies with significant increase in taxable income for year of assessments 2017 and 2018.
- Reduce tax rate from 19% to 18% for Small and Medium Enterprises (SMEs) with taxable income up to first RM500,000.
- Extend the duration to submit application for Pioneer Status/Investment Tax Allowance for new 4 and 5 star hotels to 31st December 2018
- Double tax deduction of structured internship programs until YA 2019 on expenses incurred by private companies to provide for students pursuing undergraduate degrees, diploma, as well as Level 3 and above under the Technical and Vocational Education and Training (TVET) programs.
- Extend double taxation promotion on operating expenditure borne by anchor companies for the Vendor Development Programme until 31 December 2020.
- Increase in tax deduction from RM500,000 to RM700,000 to encourage sponsorship by private sector in art and cultural performances and shows.
- Introduction of new location categories as Malaysia Digital Hub to enjoy benefits of MSC Bill of Guarantees, including tax incentives and introduction of Digital Free Trade Zones.
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GOODS AND SERVICES TAX (GST)
- GST rate remains at 6%.
- GST relief for the purchase of aid equipment for registered people without disabilities (PWDs) without going through Private Charitable Entities.
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STAMP DUTY
Stamp duty exemption on instruments of transfer and loan agreement for first home ownership for the period 1st January 2017 to 31st December 2018.
| House Price (RM) |
Stamp Duty Exemption |
| <300,000 |
100% |
| 300,000 – 500,000 |
100% to the first RM 300,000 then balance at 2% |
Stamp duty on instruments of property transfer worth more than RM1m will be increased to 4% effective 1 January 2018.
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Announcement from Royal Malaysian Customs Department (RMCD)
Registrants who still have outstanding tax in the year of 2015 will be given until 31st October 2016 to pay the outstanding amount. Failure to do so will be imposed a compound to the maximum amount of RM 20,000.
Registrants who have outstanding tax in the year of 2016 will be given until 31st December 2016 to pay the outstanding amount. Reduction in the amount of the compound will be given if registrants pay the outstanding amount until 31st December 2016. Compound to the maximum amount of RM 25,000 will be imposed if the outstanding tax is paid after 31st December 2016.
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LATEST SEMINAR: ACCOUNTING FOR GST
2-DAY COMPREHENSIVE WORKSHOP
Due to popular demand, we are organising a 2-day seminar on Accounting for GST. Our latest seminar is designed to help you in refreshing the basic GST concept and teaches on how to account for the GST transactions using the tax codes recommended by RMCD. Our extended seminar will provide ample time for Q&A sessions to discuss your specific questions in more details. This course is highly recommended for accounting staff who is unfamiliar in GST or would like a refresher in GST. Detailed case studies and comprehensive accounting examples will be provided.
Kindly fill up the registration form and send back to us. If you have any queries, please do not hesitate to contact Simon/Hui Shan at 07-332 8335.
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