1. Lower Income Tax Rates for 2015 and 2. Introduction of GST

The GOOD news. 

The income tax rates are being reduced in 2015 and a comparison of the 2014 and 2015 rates can be found here:

Comparison of Income Tax Rates 2014 and 2015

Basically this means:

Tax steps on annual salary are:
                                2014                                                   2015
0-5,000                    0%                                                       0%
5,001-10,000           2% (RM100)             5,000-10,000      1%
10,001-20,000         2% (RM100)             10,001-20,000    1%
20,001-35,000         6% (RM300)             20,001-35,000    5%
35,001-50,000       11% (RM1,200)          35,001-50,000   10%
50,001-70,000       19% (RM2,850)          50,001-70,000   16%
70,001-100,000     24% (RM6,650)         70,001-100,000   21%
Exceeding 100k     26%                          100,001-250,000  24%
                                                               250,001-400,000  24.5%
                                                            Exceeding 400 000  25%

NOTE: Non-resident individuals are subject to income tax at a fixed rate of 25%, reduced by 1% from current 26%.



GST

A new tax is going to be introduced that will replace the current Sales (10%) and Service (6%) Taxes, which will no longer be charged. It is called GST (Goods and Services Tax). GST will be implemented on 1 April 2015 and the standard rate of GST is fixed at 6%. Certain essential goods and services will be exempted from GST.

List of Zero-Rated Supply
    Agricultural products -  paddy, fresh or chilled vegetables, certain provisionally preserved vegetables
    Essential foodstuff -  rice, sugar, flour, cooking oil, vegetable, fish and meat, eggs oils, salt, flour, etc
    Livestocks and livestock supplies or poultry - live animals and unprocessed meat
    Eggs
    Fish - live, fresh, frozen and dried
    First 200 units of electricity for domestic use
    Water for dosmestic users
    Goods supplied to designated areas from Malaysia  Labuan, Langkawi & Tioman
    Exported goods
    Exported services - for example, archiecture services in connection with land outside Malaysia
    Services in Malaysia - for example, pilotage, salvage or towage services
    International services - for example, transport of passengers or goods from a place in Malaysia to a place outside Malaysia

List of Exempt Supply
    Financial Services
    Public Transport Services
    Private Education Services
    Tolled Highways or Bridges
    Childcare Services
    Funeral, Burial and Cremation Services
    Private Healthcare Services
    Supplies Made by Societies
    Residential Land or Building
    Agriculture or General Use Land

Public Transport Services Under Exempt Supply
    Mass public transport by rail (LRT, ERL, MRT, Monorail, etc)
    Ships or Boats
    Ferries
    Express bus
    Workers bus
    School bus
    Feeder bus
    Taxi

Land, Building and Lease of Property Under Exempt Supply
    Goods - Land used for residental or agricultural purposes or general use (for example, burial ground, playground or religious building)
    Goods - Building used for residential purposes
    Services - Right to use or license to occupy residential property (land or building or both)
    Services - Right to use or license to occupy land for agricultural purposes or general use (government building, burial ground, schools, playground, parks, etc.)

All owners of businesses must register before 31st December 2014 and SMEs will receive a RM1.000 subsidy for purchasing software required to calculate the tax.

Subsidy for SMEs
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