Tax authorities
Royal Customs and Excise Department Malaysia
Ibu Pejabat Kastam Diraja Malaysia
No.3, Persiaran Perdana Kompleks
Kementerian Kewangan
Presint 2, Pusat Pentadbiran Kerajaan Persekutuan
62592 Putrajaya
Tel: +603 8882 2100/2300/2500
Fax: +603 8889 5899/5901
Web: www.customs.gov.my
Revenue
Ketua Eksekutif/Ketua Pengarah Hasil Dalam Negeri
Lembaga Hasil Dalam Negeri, Malaysia
Tingkat 15, Blok 9
Kompleks Bangunan Kerajaan
Jalan Duta
Peti Surat 11833
50758 Kuala Lumpur
Tel: +603 6209 1000
Fax: +603 6201 3798
Website: www.hasil.gov.my
Tax rates at a glance
(As of August 29 2008)
| Corporate income tax rate |
25%1 |
| Capital gains tax rate |
Not applicable2 |
| Branch tax rate |
25% |
| Foreign source income |
nil3 |
Withholding tax on payments to non-residents |
|
| Dividends |
Nil |
| Interest |
15%4 |
| Royalties from patents and licences |
10%5 |
| Technical Fees |
10%6 |
| Other fees, e.g. guarantee fees, commissions |
10%7 |
Branch remittance tax |
Nil |
| Net operating losses (years) |
|
| Carryback |
Up to RM100,000 ($28,400) for one year8 |
| Carryforward |
Indefinitely9 |
| Group relief |
Up to 70% of current year adjusted |
(a) For companies with a paid up capital of RM2.5 million ($710,000) or less (and which are not part of a group whereby the company is held by nor holds control of a company whose paid up capital is more than RM2.5 million), the tax rate on the first RM500,000 ($142,000) of profits is 20%.
(2) Malaysia does not have a broad capital gains tax. It previously operated a real property gains tax (RPGT) regime in respect of gains from the disposal of real property or shares in real property companies, but, there has been a blanket exemption from RPGT with effect from April 1 2007
(3) Foreign source income is exempt from tax (unless received by a company in the business of banking, insurance, shipping or air transport)
(4)This rate may be reduced by tax treaties
(e) This rate may be reduced by tax treaties
(f) This rate may be reduced by tax treaties
(7) Typically, these would be fees which do not comprise business income of the non-resident
(8) Only for the years of assessment 2009 and 2010
(9) The law provides that carry forward losses will be restricted where there has been a substantial change in shareholding. However, as a concession, such losses can still be carried forward, notwithstanding a substantial change in shareholding unless the company is dormant
Source: Professionals from Taxand Malaysia, the Malaysian member of Taxand, the global network of leading independent tax firms
Malaysia
Goh Ka Im, partner; Anand Raj, partner; Irene Yong, partner; Cynthia Lian; and Foong Pui Chi
Shearn Delamore & Co
Kuala Lumpur
Shearn Delamore & Co explains the rules that apply to taxpayers in Malaysia
[Show full article]
Tax
Malaysia has had a turbulent year. First, the economic downturn took hold and saw M&A transactions all but dry up. Then in April, the country was placed on the OECD's blacklist of tax havens that had not agreed to the standard for tax information exchange. ...
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Malaysia has had a turbulent year. First, the economic downturn took hold and saw M&A transactions all but dry up. Then in April, the country was placed on the OECD's blacklist of tax havens that had not agreed to the standard for tax information exchange. Malaysia was subsequently taken off this list within a few days and was placed on the greylist.
Following the publication of this list, Malaysia has surprisingly found itself in demand from foreign investors. American firms scared of being associated with tax havens have seen Malaysia as a viable alternative to do business. The main attraction to Malaysia is the country's beneficial IP regime which is by far the most competitive among Asian countries.
Transfer pricing has grown more prominent over the past year thanks to the introduction of legislation at the beginning of 2009. Guidelines did exist before this date but few taxpayers adhered to them and many failed to keep the correct documentation. This legislation completely altered the way foreign investors see Malaysia. In the past it was seen as a fairly stable jurisdiction and now following the arrival of thin capitalisation and advance pricing agreement legislation, Malaysia has clearly decided to position itself as a location for multinationals.
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Ernst & Young remains one of the top tax consulting practices in Malaysia by virtue of it being the largest in terms of headcount and client base. Like its big-four rivals, it operates in numerous branch locations across the country and boasts a large ...
[more]
Ernst & Young remains one of the top tax consulting practices in Malaysia by virtue of it being the largest in terms of headcount and client base. Like its big-four rivals, it operates in numerous branch locations across the country and boasts a large network of tax professionals.
The practice covers all areas of tax and has placed particular emphasis on indirect tax and transfer pricing. The practice is led by Kenneth Lim. The Malaysian government extend its contract with the firm to advise on the tax policy of establishing the Labuan Offshore Financial Services Authority. The practice is also advising the government on the introduction of a goods and service tax to the country.
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Like last year, KPMG has been heavily recommended by peers as one of the leading tax firms in the country. The firm offers a full range of tax services, but some areas have fared better than others during the slowdown. Traditional M&A work has been replaced ...
[more]
Like last year, KPMG has been heavily recommended by peers as one of the leading tax firms in the country. The firm offers a full range of tax services, but some areas have fared better than others during the slowdown. Traditional M&A work has been replaced with tax-efficient restructurings. International tax partner Nicholas Crist has been kept busy by clients trying to get to grips with the country's new thin-capitalisation rules. Chew Theam Hock was also recommended for his financial products advice.
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PricewaterhouseCoopers has adopted an alternative strategy to help its clients survive the increasing scrutiny from the tax authorities. The firm has hired three government officials to help gain a better understanding of the way the authorities operate. ...
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PricewaterhouseCoopers has adopted an alternative strategy to help its clients survive the increasing scrutiny from the tax authorities. The firm has hired three government officials to help gain a better understanding of the way the authorities operate. The appointment of Kaziah Abd Kadir, Tan Kwong Jin and Ng Oi Leng were described by head of tax Khoo Chuan Keat as "enabling us to open doors that we would have otherwise struggled to ring the bell on". Since her appointment, Kadir has been helpful in increasing the firm's understanding of the country's two stimuli packages as she was previously deputy director-general for one of the country's trade ministries. The firm have also brought in audit specialist, Christopher Low, from KPMG.
International tax services leaders, Dorothy Ooi and Lim Yiek Lee have expanded their team in the past 12 months and now regularly cooperate with their Cambodia, Loas, Thailand and Vietnam offices to establish greater cooperation between the countries for investors looking at the region to invest.
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For a number of years, Shearn Delamore & Co has been able to compete with the big-four accountancy firms, despite its meagre size in comparison. Goh Ka Im heads the practice and regularly represents clients in tax appeals before the Special Commissioners ...
[more]
For a number of years, Shearn Delamore & Co has been able to compete with the big-four accountancy firms, despite its meagre size in comparison. Goh Ka Im heads the practice and regularly represents clients in tax appeals before the Special Commissioners of Income Tax.
Despite only operating with five tax lawyers, the firm claims to be one of the only law firms in Malaysia with a dedicated tax department.
Tax controversy expert Anand Raj has also been involved in some of the firm's largest transactions over the past year. Along with Cynthia Lian, he acted for National Instruments Corporation, a US electronics manufacturer, in establishing operations in Penang. Raj and Lian advised the company and their tax accountants in negotiating investment incentives with the Ministry of Finance. The transaction was worth $68 million.
Raj and Irene Yong acted for a group of companies operating in the oil and gas sector in concluding a successful appeal before the Court of Appeal. The issues dealt with landmark withholding tax principles with ramifications for all Malaysia and non-resident taxpayers in the provision of services to non-residents.
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Azman Davidson & Co continues to concentrate on tax litigation from the level of Special Commissioners of Income Tax to the Court of Appeal. The firm, which is led by much-respected Francis Tan, also takes an active part in discussions with and representations ...
[more]
Azman Davidson & Co continues to concentrate on tax litigation from the level of Special Commissioners of Income Tax to the Court of Appeal. The firm, which is led by much-respected Francis Tan, also takes an active part in discussions with and representations to the Inland Revenue Board on tax issues.
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Deloitte has 330 tax professionals across a broad-range of areas, making the practice one of the largest in Malaysia. Ronnie Lim leads the tax practice and has made the firm one of the few where tax revenues are more than it earns from audit. Theresa ...
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Deloitte has 330 tax professionals across a broad-range of areas, making the practice one of the largest in Malaysia. Ronnie Lim leads the tax practice and has made the firm one of the few where tax revenues are more than it earns from audit. Theresa Goh, the leader of the transfer pricing team, has found herself busier than ever following the introduction of transfer pricing and advance pricing agreements rules. The firm has 18 full-time dedicated transfer pricing specialists and six part-time staff in the firm's two transfer pricing offices in Penang and Johor Bahru.
One of the firm's leaders, Lim Heng How, is the deputy president of the Chartered Tax Institute of Malaysia while another, K Sandra Segaran, is a member of its technical committee.
Deloitte has dedicated government liaison staff plus over 10 former Inland Revenue and Royal Customs officers at its disposal, including Lim Heng How, previously number three in the hierarchy of the Inland Revenue Board.
This year, Tan Hooi Beng and Daniel Lim were promoted to partner.
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Still in its infancy, Taxand Malaysia is a growing firm that has the reputation to match. Clients have commended the firm for "providing valuable advice at reasonable fees". Head of tax Veerinderjeet Singh has been highlighted for his transfer pricing ...
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Still in its infancy, Taxand Malaysia is a growing firm that has the reputation to match. Clients have commended the firm for "providing valuable advice at reasonable fees". Head of tax Veerinderjeet Singh has been highlighted for his transfer pricing expertise. The firm added just one person to the tax team in the form of Masako Hikota. Hikota joined from Nissan and will be directly involved in enhancing the firm's presence in the Japanese market. She will be involved in Malaysia's chamber of commerce for Japan and will be the key contact for clients with operations in Japan.
Singh and Leow Mui Lee, who was recommended by clients, both represented a multinational distributor of consumer products in a transfer pricing dispute. Disputes are regular work for the firm, but this was resolved by signing one of the only two advance pricing agreements in the country, having beaten off competition for the work from the big-four accounting firms.
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While a substantial part of Wong & Partners (Baker & McKenzie) work is advisory and specialist tax planning, the firm has the advantage, unlike accounting firms, of offering legal structuring advice and opinions. Adeline Wong leads the tax practice and ...
[more]
While a substantial part of Wong & Partners (Baker & McKenzie) work is advisory and specialist tax planning, the firm has the advantage, unlike accounting firms, of offering legal structuring advice and opinions. Adeline Wong leads the tax practice and has become respected as one of the country's leading litigators.
Wong and Ho Tze-Shiang successfully advised on and attended to an application for stamp duty exemption for a share transaction between associated parties for a multinational company.
The firm also successfully assisted a multinational semiconductor company in obtaining a substantial pre-packaged tax incentive from the Malaysian government for its manufacturing entity in the country. The company had already been involved in two rounds of tax incentives and so the likelihood of getting more relief was slim. However, the firm managed to get an income tax exemption for a further 10 years, something which is not usually granted in Malaysia.
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Arjunan & Associates is a corporate law firm that have been recommended for its litigation work. Much of its reputation comes from its tax specialist Geraldine Yeoh.
Nik Saghir & Ismail is a strong medium-sized firm that excels in its tax controversy work. Nik Saghir is well-respected and one peer commented that "he is in the top tier of tax advisers in the country".