eKTP 30

Budget 2017 Highlight
Part 2 of 4


Budget 2017 Highlight – New proposal and changes affecting Income Tax Act (ITA), 1967 for Corporate.

According to the recent announcement of Malaysia Budget 2017 on 21 October 2016, there are new proposal of legislation as below:

1. Additional: Schedule 1 Paragraphs 2A and 2D Part I of ITA – Reduce income tax rate by 1% (19% to 18%) on first RM500,000 of chargeable income for SME

2. New: Gazetted Order – Reduce income tax rate based on the percentage(%) of increase in chargeable income compared to the immediate preceding year of assessment

3. Additional: Section 4(A)(i) & (ii), 15A and 109B(1)(a) & (b) of ITA – Expand the scope in Special Classes of Income.

  • Income derived by/ payment to a non-resident shall be deemed to be derived from Malaysia

  • Subject to withholding tax

  • Irrespective services were performed in Malaysia or outside Malaysia.

4. Additional: Section 34(6)(k) of ITA – Increase the deduction for sponsoringlocal and foreign arts, cultural and heritage activities approved by the Ministry of Tourism and Culture

  • Total tax deduction up to RM700,000.00 per year where sponsoring foreign activities is limited up to RM300,000 per year

5. Additional: Section 44(6), (7) , (7A), (7B) and (11B) of ITA – Scope of income and deduction for approved donations expand

  • Exemption of income on fund approved accordance to Section 44(6)

  • Exemption of income on fund for charitable purposes by a religious institution

  • Deduction of cash contribution to a fund held by an institution, subject approval by Director General

  • Deduction of cash contribution for any sport activities approved by the Minister of Finance


Please refer to the below link for further details:

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