30 January 2019
The Malaysian Budget 2019 was announced by the Finance Minister on 2 November 2018. Some of the key highlights of the Budget include:
- Service tax: Effective 1 January 2020, service tax will be imposed on electronically supplied services including, among other things, download software, music, videos and digital advertising services, obtained by consumers from foreign service providers.
- Real property gains tax ("RPGT"): RPGT rates for the disposal of real property or shares in a real property company in the sixth and subsequent years of disposal will be increased from the current 5% to 10% (if disposer is a company or not a citizen or not a permanent resident individual) and from 0% to 5% (if disposer is a Malaysian citizen), subject to the relevant exemptions.
- Stamp duty:
- Increased stamp duty rate for properties valued above MYR1,000,000: The Government increased the stamp duty on the transfer of property valued at more than MYR1,000,000 from 3% to 4%, with effect from 1 January 2019.
- Stamp Duty for first-time home buyers: First-time home buyers purchasing residential properties of up to MYR500,000 are exempted from paying stamp duty on loan agreements and sale and purchase agreements for a period of two years until December 2020. Further, first-time purchasers will also be exempted from paying all stamp duty charges for residential properties valued between MYR300,001 and MYR1,000,000 for a period of six months.
- Income tax: The tax rate for small and medium enterprises for chargeable income up to MYR500,000 will be reduced from 18% to 17%.
- Tax deductions: Various tax deductions were introduced in the Budget. For instance, it has been proposed that income tax deductions be allowed for contributions from any parties to a social enterprise uplifting underprivileged and marginalised communities. Further, in respect of Islamic finance, the existing tax incentive will be extended and made available for two years from YA 2019 to the end of 2020.