20231205-KPMG_Global-Malaysia_–_2024_Budget_Highlights_and_Finance_Bill_Tax_Measures_8页_324kb

2024 Malaysian Budget Highlights: Tax Measures Summary

On October 13, 2023, Malaysia's Prime Minister and Finance Minister introduced the "2024 Budget," themed "Economic Reforms, Empowering the People." The Finance Bill followed on November 7, 2023. Though the budget lacked new taxes, several existing tax reliefs were modified.

Key Changes:

1. Expanded Scope and Increased Limits of Tax Reliefs (Effective from YA 2024):

• Medical Expense Relief: Dental examinations/treatment, COVID-19 tests/purchase kits, mental health consultations, learning disability assessments, and related medical/care expenses now qualify for higher limits.
• Lifestyle & Sports Expense Relief: Increased limits for book purchases, computer/tablet fees, sports equipment, gym fees, and sports course fees. Additional expenses related to sports for dependents are expanded.

Other Amendments:

2. Child-Care Allowance: The tax exemption limit increases from MYR 2,400 to MYR 3,000 per year (Effective from YA 2024).

3. Income Tax Exemption for Women Returning to Work: The incentive period is extended until YA 2028.

4. Returning Expert Programme (REP):

• Existing REP applications due by Dec 31, 2023, now extended to Dec 31, 2027.

5. Preferential Tax Rate for Non-Citizens: A 15% flat tax rate for qualified non-citizens in approved companies (MYR 35k+/month, key positions) until YA 2027.

6. Mandatory Electronically Filed Forms: All employers must electronically submit specific forms (E, CP21/CP22/CP22A/CP22B) starting in 2024.

• Form CP22A/CP22B: The cessation condition (b) is removed.

7. Real Property Gains Tax (RPGT) System Implementation: Switching to a "Self-Assessment" system from Jan 1, 2025.

Implementation Dates:

• Expanded lifestyle deductions, child-care exemption, and various deadlines affect YA 2024/YA 2025.
• E-filing requirement takes effect Jan 1, 2024.
• RPGT Self-Assessment System starts Jan 1, 2025.

KPMG Insights:
The measures impact tax burdens on assignments, encourage specific groups (women/experts), modernize filing, but require comprehensive record-keeping. Employers should note form submission deadlines and the legal implications of RPGT self-assessment.

In essence, the budget amends existing tax provisions without introducing new taxes, aiming to support living standards, encourage return-to-work, attract talent, and update tax administration via digital compliance.