Malaysian Budget 2009 on Tax Implications

* The current tax rebate of RM350 per person be increased to RM400 for those with taxable income of RM35,000 and below.

* All interest income from savings for individuals be tax exempt. （之前中5%withholding tax )

* Reduce import duties on various consumer durables from between 10% and 60% to between 5% and 30%. These include blender, rice cooker, microwave oven and electric kettle.

* Full import duty exemption on several food items, which currently attract import duties of between 2% and 20%. These include vermicelli, biscuits, fruit juices and canned sweet corn.

* Travel allowance for commuting to work provided by employers be given full tax deduction, while the employees receiving such an allowance be given tax exemption of up to RM2,400 per year.

* Tax exemption be given to employees on:

- Interest subsidies on housing, motor vehicles and education loans. The tax exemption will be limited to total loans up to RM300,000;

- Mobile phones, as well as telephone and internet bills paid by the employer;

- Staff discounts of up to RM1,000 a year on company traded goods（之前limited to RM200而已）

- Staff discounts on services rendered by the company, such as private schools providing free education to children of their employees; and

- Childcare allowance of up to RM2,400 per year.

* Tax exemption on medical benefits provided by employers to include expenses on maternity and traditional medicine, namely acupuncture and ayurvedic.

* Effective Jan 1 2009, civil servants with a monthly household income of RM3,000 eligible for a subsidy of RM180 per month.

* For companies contributing to charitable institutions, the limit of tax deduction be increased from 7% to 10% of aggregate income.

* The highest marginal tax rate for individuals be reduced from 28% to 27%, effective the year of assessment 2009. In addition, the marginal tax rate of 13% will also be reduced to 12%, which will benefit the middle income group.

* Recruitment costs, such as payments to employment agencies and participation in job fairs, be tax deductible.

* All SME assets in the form of plant and machinery acquired in the years of assessment 2009 and 2010 be given Accelerated Capital Allowance to be claimed within one year. In addition, SMEs are allowed to claim full Capital Allowance on all small value assets within one year.(没有RM10k限制)

* Tax exemption be given on fees received by domestic intermediaries, which successfully list foreign companies and foreign investment products in Bursa Malaysia. This measure will also enable domestic investors to acquire shares of foreign companies listed in the local exchange.

* Current tax rate on dividends received by foreign institutional investors from Real Estate Investment Trusts (REIT) be reduced from 20% to 10%. Recognising that REITs is an attractive investment product for individuals as well, the Government also proposes a reduction in tax rate from 15% to 10%.


By Enghwa