RM20,000 tax rebate for three years of assessments

Income tax rebate of up to RM20,000 per year for the first 3 years for new Small and Medium Enterprises and Limited Liability Partnerships incorporated or registered in Malaysia and establishing operations between 1.7.2020 and 31.12.2021, has now been extended to 31.12.2022.

The yearly tax rebate can be utilized to offset the tax due for the assessment year. This means that a qualified SME could save up to RM60,000 in tax over the course of 3 years.

Tax rebate requirements:

  1. Limited Liability Partnerships or Resident Companies (LLP)
  2. Commenced operation between 1 July 2020 and 31 December 2022.
  3.  The rebate amount is equal to the capital and operational expenditure incurred, up to a maximum of RM20,000 per year.
  4. Effective beginning with the Assessment Year 2021. (for 3 years of assessment).
  5. Paid-up capital / capital contribution of not more than RM2.5 million at the begin of the basis period and gross business income of not more than RM50 million in that Year of Assessment.
  6. The company’s or LLP’s operations must take place in a location differ from that of its related company or related LLP.
  7. The company or LLP shall not use any plant, equipment, or facility owned by its related company or related LLP, or which has been transferred to the company or LLP by its related company or related LLP. 
  8. Except for the Chief Executive Officer and Director, the employees of the company or LLP must be separate from those employed by its related company or related LLP.
  9. The business is different from the related company.
  10. A business is separate from a sole proprietorship.
  11. Furthermore, the company cannot be owned directly or indirectly by:
    • A Company with a paid-up capital of more than RM2.5 million;
    • Multi-National Corporations; or
    • Government Linked Companies.
  12. The Minister may impose additional conditions as he sees fit.

For more information : https://lom.agc.gov.my/act-view.php?type=pua&no=P.U.%20(A)%20504/2021