Tax planning in Malaysia is an optimal solution for those who want to know what taxes are payable in companies they have as individuals and how to reduce them. Our tax advisors can guide you in this endeavor and offer complete tax planning services. When you want to open a company in Malaysia, you must understand the importance of tax planning.
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Why it is good to choose the right business structure from a tax point of view
Foreigners who want to set up a company in Malaysia should know the tax law, depending on the chosen business structure. This could be a good start for implementing proper tax planning in Malaysia. Sole proprietorships, partnerships, and public and private companies are subject to various taxes and liabilities. Moreover, Labuan companies can be an optimal option for those who want to pay less taxes. On the other hand, even if the corporate tax rate in Malaysia is 24%, it can be reduced under certain conditions, such as in the case of companies that do not exceed the threshold of RM 50 million as annual gross income. However, we invite you to discover our tax planning services if you are interested in company formation in Malaysia.
Amplifying tax deductions in Malaysia
Good tax planning must include various tax optimization strategies right from the beginning of the business. You can opt for various methods, and among them, the following are recommended:
- The deduction for the purchase of office supplies and equipment. Taxes can be recovered, but you can learn more about tax planning for companies in Malaysia from our specialists.
- 19% tax deduction is possible for employers who pay the Employer Provident Fund (EPF) under specific conditions.
- Travel allowances for official duties purposes can also be part of tax deductions in Malaysia. Our tax advisor can tell you more about tax planning for companies in Malaysia. This can also be an option for tax planning for sole proprietors in Malaysia.
About tax planning for individuals in Malaysia
Natural persons can also benefit from tax planning in Malaysia. Here are some solutions for tax planning for individuals in Malaysia:
- Childcare subsidies are available in Malaysia, for no more than RM 2,400 per year. Interest on loan subsidies of no more than RM 300,000.
- Private retirement schemes can also be part of tax planning for individuals in Malaysia. Our advisor can tell you more about tax planning in Malaysia.
Tax planning for sole proprietors in Malaysia can be explained by our team.
What are the “earning stripping rules” in Malaysia?
The tax system in Malaysia involves, since 2020, the “earning striping rules” This system is provided by the Income Tax Act 1967 in Malaysia. This scheme can be part of tax planning for companies in Malaysia. Here is what it entails:
- Multinational enterprises registered in Malaysia have a guarantee that they pay a fair share of taxes.
- Companies can deduct interest expenses for up to 20% from their Tax EBITDA (Earnings before Interest, taxes, Depreciation, and Amortization).
- With the “earning stripping rules” scheme in Malaysia, tax evasion can be contested for a reasonable distribution of tax burdens of multinational companies registered in Malaysia.
We specify that in addition to helping with tax planning in Malaysia, our clients can also benefit from support for company incorporation in Malaysia. We can help you start a business in Malaysia by handling the procedures. Moreover, when you want to do business, you can opt for our accountants in Malaysia and discover the optimal services for the smooth functioning of the company. Contact us for an evaluation and extra information.