Nobody likes paying taxes. Luckily, as a small business in Malaysia, there are some benefits available to you. With these benefits, your business will be able to enjoy a considerable amount of savings throughout tax season.
Lower Corporate Income Tax
If your business has a chargeable income of less than RM500,000, your company will be taxed at a specific rate. This means that you, as a small business owner, won’t have to worry as much about corporate tax when you’re first starting out.
Tax Incentives
Malaysia offers a wide range of tax incentives, ranging from tax exemptions to allowances to tax deductions. Allowances can generally even be carried forward until fully utilized.
These tax incentives vary based on the sector your business is in. Here are two that should definitely be noted.
- Information and Communication TechnologyCosts that are incurred on development of an e-commerce website for a business are given an annual deduction of 20% for 5 years.
- Merger & Acquisition
- Enterprises in certain service sectors, if fully owned by Malaysians, carry out a scheme of merger or acquisition approved by the Small and Medium Enterprises Corporation Malaysia, may receive a flat tax rate of x% on all income. This Flat tax rate will be in effect for 5 years from the date of completion of the merger. These enterprises will also receive certain stamp duty exceptions.