Taxation

Malaysia has a progressive tax system, with different tax rates and rules for corporate and personal taxation. Here is an overview of the tax system in Malaysia:

Corporate taxation:

- The corporate income tax rate in Malaysia is 24%, which applies to both resident and non-resident companies.

- Small and medium-sized enterprises (SMEs) are eligible for tax incentives and lower tax rates, depending on their size and industry.

- Capital gains are generally taxed as regular income, but there are exemptions available for certain types of gains.

Personal taxation:

- Malaysia residents are subject to personal income tax on their worldwide income, with a progressive tax rate that ranges from 0% to 30% depending on income level.

- Non-residents are only taxed on their income sourced from Malaysia.

- There is also a monthly tax deduction (MTD) system in place, where employers deduct tax from employees' salaries and remit it to the government.

- Capital gains are generally taxed as regular income, but there are exemptions available for certain types of gains.

Tax payment process and calendar:

- The tax year in Malaysia is from January 1st to December 31st of the same year.

- Taxpayers are required to file their tax returns by April 30th of the year following the tax year.

- Corporate income tax payments are made on a monthly or quarterly basis, depending on the size of the company and the industry.

- Personal income tax payments are made through the MTD system, with deductions made on a monthly basis.

- Late tax payments are subject to penalties and interest charges.

Malaysia has been implementing tax reforms in recent years to improve tax collection and compliance, such as the introduction of the goods and services tax (GST) in 2015, which was replaced by the sales and services tax (SST) in 2018. The government also offers various tax incentives and exemptions to promote investment and economic growth in the country.