Tax Budget 2023 Highlights: Corporate & Business Tax

Some of the key tax highlights:

Corporate & Business Tax

1. Tax Rates Adjustment for MSME

With effect from YA 2023, the income tax rate for MSME (Micro, Small and Medium Enterprises) will be adjusted to:

• first RM150,000 of chargeable income will be taxed at 15%
• next RM450,000 of chargeable income will be taxed at 17%
• any excess chargeable income from RM600,001 onwards will be taxed at 24%.

2. Re-definition of “plant” for capital allowance purpose

Previously, the phrase “Plant” has been defined to exclude Intangible Asset. However, it is now revised where Intangible Asset has been removed from the definition but replaced with any other asset as prescribed by the Minister.

3. Expansion of scope on the double deduction for Senior Citizen, Ex-Convict, Parolee, Supervised Person and Ex-Drug Dependent.

The double deduction which is presently given to employers hiring these employees on key conditions where they are full-time, with salary not exceeding RM4,000 per month will now be extended under “Corporate Smart Internship” to include hiring residents of Henry Gurney School or Registered Supervised Welfare Homes.

4. Specific Deduction for “Smart AI-Driven Reverse Vending Machine”

Specific deduction to any person for contributing to or providing “Smart AI-Driven Reverse Vending Machine” as a community product. Not sure what is RVM? You may get some idea HERE.

5. Lease rental of non-commercial electric vehicle

Presently, lease rental of non-commercial vehicles would be restricted as follows:

• a maximum deduction of RM100,000 for vehicle that is new and its cost does not exceed RM150,000 while
• a maximum deduction of RM50,000 for all other non-commercial vehicles.

It is now proposed that lease rental of non-commercial electric vehicles to be restricted to a maximum of RM300,000.

6. E-Invoice Initiative

The government will initiate a pilot project with selected companies in 2023 for e-invoice initiative. This will be expanded gradually over the next few years with the expectation as follows:

• Year 2024 – for business with annual revenue of RM100m and above
• Year 2025 – for business with annual revenue of RM50m and above
• Year 2026 – for business with annual revenue of RM25m and above
• Year 2027 – for all businesses

Never heard of E-Invoicing? You may want to read some E-Invoicing Related News [Vietnam Get Retailes to Issue E-Invoices] and [E-Invoices to Improve Tax Systems]

Other Budget 2023 Proposals

• Bring me to PERSONAL TAX PROPOSALS
• Bring me to CORPORATE & BUSINESS TAX PROPOSALS
• Bring me to STAMP DUTY & RPGT PROPOSALS
• Bring me to E-Invoicing

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