Income Tax Rate in Malaysia for the Financial year 2017-18 is progressive rate from 0% to 26% and maximum rate is 28%. There is distinction in tax rate for Resident and Non Resident individuals in Malaysia.
|Income Slab||Tax Rate|
|Income upto MYR 5,000||0%|
|MYR 5,000 to MYR 20,000||1%|
|MYR 20,001 to MYR 35,000||5%|
|MYR 35,001 to MYR 50,000||10%|
|MYR 50,001 to MYR 70,000||16%|
|MYR 70,001 to MYR 100,000||21%|
|MYR 100,001 to MYR 250,000||24%|
|MYR 250,001 to MYR 400,000||24.5%|
|MYR 400,001 to MYR 600,000||25%|
|MYR 600,001 to MYR 10,00,000||26%|
|Above MYR 10,00,000||28%|
Deductions and Tax Credits
If any expenses is incurred for wholly and exclusively in the duties, the employees are allowed to claim deductions.
Subject to limits donations to donations to approved institutions or organisations are deductible.
Interest paid for housing loan will be available only when income is derived from the house.
28% for the Income earned by a Non Resident for his income from Malaysian sources unless the person works less than 61 days in a year or if his country of residence has concluded a double taxation agreement with Malaysia.
24% - Standard Corporate Tax Rate
19% for the first MYR 500,000 then 24% for Residential small and medium sized enterprises with capitalization of less than 2.5 Million
6% is the Rate of GST in Malaysia
Items Exempted from GST in Malaysia
The following items are exempted from GST:
- Residential buildings
- Life insurance
- Private health services
- Private educational services
- Financial services
- Land for agricultural and public use
- Public mass transportation and highway tolls
Zero Rated supplies
- Basic essential goods such as rice, fresh fish, meat, chicken, cooking oil and fresh vegetables
- Water for domestic use
- The first 300 kWh of electricity for domestic use
- Exports of goods.
The following items are subject to Excise duties:
- Beer and liquor
- Motor vehicles
- Playing cards
- Mahjong tiles
Taxable capital gain is only the gains derived from sale of real property or on the alienation of shares in a real property company.
Capital Gain tax Rate
- 30% Tax for real property disposed of within 3 years
- 20% Tax for disposal of real property in 4th year
- 15% Tax for disposal of real property in 5th year
- 5% Tax for property disposed of after 6th year or more
0% for Dividends
15% for Interest
10% for Royalty