Highlights of Budget 2014 – Individual Income Tax

Individual Income Tax - Budget 2014 Malaysia, by KL Management Services

Effective Year of Assessment 2015 (meaning from 1 January 2015 onwards), the tax rates for individual residents of Malaysia shall be reduced by 1% to 3% as follows:-

budget-proposal-klm-individual-income-tax-table-2015

The above proposal is to increase disposable income, and in line with the implementation of GST. This tax structure, according to the Budget 2014, is more competitive and progressive, and with the aim to retain and attract talents back into the country.

For non-resident individuals, income tax rate shall be reduced by 1%, from the current 26% to 25%.

Special Relief

Further to the above reduction on tax rates, an additional Special Relief of RM2,000 be given to resident tax payers earning up to RM8,000 per month (or aggregate income of up to RM96,000 per year). With this, the individual shall enjoy additional tax savings up to RM480, depending on the amount of tax payable after taking into account all the deductions. Effective date for this is Year of Assessment 2013 (which means calendar year 1 January 2013 to 31 December 2013).