Malaysia's Budget 2024: A Glimpse into Others' Important Updates

Malaysia's Budget 2024: A Glimpse into Others’ Important Updates

Budget 2024 introduces a wide range of financial reforms set to have a substantial impact on various sectors. These proposals are geared toward maintaining the fiscal responsibility of the nation while promoting economic growth.

In this last blog post, we will delve into the remaining key highlights of this budget to understand the changes and their implications

1. Capital Gains Tax (CGT)

As we approach 2024, a notable update is in the works concerning Capital Gains Tax (CGT) in Malaysia. This tax reform is set to affect the disposal of unlisted shares and aims to strike a balance between fiscal responsibility and economic growth.

Key Details:

• Disposal of unlisted shares

• Rate

• Except for

i. Initial Public Offering (IPO) approved by Bursa Malaysia; and

ii. Restructuring of shares within the same group.

• Effective from 1 March 2024

2. High-Value Goods Tax

Another significant development on the horizon is the introduction of the High-Value Goods Tax in Malaysia. This tax targets specific luxury items, such as jewellery and watches, and may influence your financial decisions.

Key Details:

• Specific high-value items (eg. jewellery and watches)

• Rates of 5% to 10%

• Based on the threshold value of good price

3. E-invoice

Embracing modern technology and digital solutions is a crucial step forward in the world of taxation. E-invoice, an electronic invoicing system, is set to bring substantial changes to how businesses manage their financial transactions. To accommodate this significant shift and ensure a smooth transition for taxpayers, the Government has introduced an extension to the enforcement timeline.

Key Details:

• Mandatory implementation for businesses with an annual income or sales exceeding RM100 million, beginning 1 August 2024.

• Second phased enforcement for other categories, with comprehensive implementation starting from 1 July 2025.

• Expanded usage of Tax Identification Number (TIN) to support e-invoice.

4. Conditions for Institutions/ Organisations/ Funds approved under Subsection 44(6) of Income Tax Act 1967 (ITA)

In the ever-evolving landscape of taxation, the Government has undertaken a review of the conditions governing institutions/ organisations/ funds approved under Subsection 44(6) of the ITA. These changes are designed to ensure compliance and promote transparency in the utilisation of accumulated funds for business activities.

Key Details:

• Reviewed the conditions:

i. Increase in the accumulated funds utilisation limit in business activities from 25% to 35%

ii. 2 options to continue with the benefits of the incentives:

iii. Consequences of breaching conditions and its impact on tax exemption

- DGIR will not withdraw the approval under subsection 44(6) for institutions/organisations/funds during the validity period.

- for any breach of conditions within the approval period, the institutions/organisations/funds will not be eligible for tax exemption

- DGIR will raise tax assessment on all income received by the institutions/organisations/funds in the YA the breach of conditions occurred.

• Effective Date From the year of assessment 2024.

5. Preferential tax rate

To boost the Malaysian film industry and attract foreign film production companies, actors, and crews, the government is introducing a preferential tax rate scheme

Key Details:

• For foreign film production companies, actors and crews filming in Malaysia

• Between 0% to 10%

In summary, as the nation looks forward, these changes are expected to contribute to a stronger and more secure future.

Budget 2024 Highlights - Past Updates

Individual : https://www.ktp.com.my/.../malaysias-budget-2024.../17oct23

Companies : https://www.ktp.com.my/.../malaysias-budget-2024.../18oct23

Tax Exemptions : https://www.ktp.com.my/.../malaysias-budget-2024.../19oct23

Tax Incentives : https://www.ktp.com.my/.../malaysias-budget-2024.../20oct23

Stamp Duty & Indirect Tax https://www.ktp.com.my/.../malaysias-budget-2024.../23oct23

Payroll (EPF & SOCSO) https://www.ktp.com.my/blog/malaysias-budget-2024-a-glimpse-into-epf-socso-updates/24oct23

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