Key Budget 2019 Amendments

(Effective from 1 January 2019)

 Preferential rate for SMEs

The preferential rate for SMEs is reduced to 17% on the first RM500,000 of their chargeable income.
Reference: Schedule 1 Paragraps 2A and 2D Part 1 of ITA 1967.

 Change in RPGT rates

The RPGT rates for sale of property after 5 years from the date of acquisition is increased for citizens
from 0% to 5% of chargeable gains while for foreigners and companies, it is increased from 5% to 10%.

 Increase in stamp duty rate

It was proposed that the stamp duty tax rate for property transactions be increased from 3% to 4% in
respect of any value in excess of RM1 million.

 Abolishment of offshore insurance preferential tax rates

It is proposed that the preferential tax rate for offshore insurance and offshore takaful insurance of
5% be abolished.
References: sections 60, 60AA and 60B ITA 1967

 Reduction in tax rates for Small and Medium Enterprises

Small and medium enterprises (SMEs), being companies with paid-up capital not exceeding RM2.5
million, are subject to preferential tax rate on the first RM500,000 of their chargeable income. It has
been proposed that the preferential tax rate is reduced from 18% to 17%. The tax rate for any income
in excess of RM500,000 remains constant at 24%. The reduction in the preferential tax rates results
in savings in tax payable up to RM5,000 per annum for SMEs.
Legislation: Schedule 1 Paragraphs 2A and 2D Part 1 ITA 1967.

 Time limit to carry forward unabsorbed losses

The carrying-forward of unutilised losses is restricted to a maximum of 7 years from the time in which
the loss is generated.
Legislation: New sec.44 (5F) ITA

 Time limit to carry forward unutlised capital allowances

The carrying-forward of unutilised capital allowances is restricted to a maximum of 7 years from the
time in which the allowance is generated.
Legislation: Schedule 3 new para 75D ITA 1967