PETALING JAYA: As Malaysia positions itself for sustainable economic growth and fiscal resilience, a series of tax measures are slated for implementation in 2025.
These initiatives aim to enhance revenue generation, promote business competitiveness and foster a more equitable taxation framework, reflecting the government’s commitment to a holistic and forward-thinking approach to tax reform.
Tratax Sdn Bhd, a leading tax consultancy firm, has provided a comprehensive overview of the critical tax changes that will shape Malaysia’s regulatory framework this year.
Tratax executive director Thenesh Kannaa said these reforms will have significant implications for businesses and individual taxpayers, influencing financial planning, compliance requirements, and overall tax strategies.
He said with a rapidly evolving tax landscape to boost economic growth and ensure a more equitable tax system, Tratax underscores the importance of proactive preparation and informed decision-making to navigate the changes effectively.
Starting Jan 1, Malaysia’s tax landscape will see several significant changes to enhance tax compliance and broaden the tax base.
Key measures include a 2% tax on individual dividend income and phased implementation of e-invoicing – beginning Jan 1 for entities with annual revenue between RM25 million and RM100 million, and from July 1 for those earning less.
To support this, a Taxpayer Identification Number (TIN) finder has been launched to help businesses verify customer TINs.
Additionally, sales tax will be expanded to cover non-essential goods, and services tax will apply to commercial transactions starting May 1. Detailed guidelines will be announced soon.
A Global Minimum Tax framework will take effect for financial years beginning Jan 1, aligning Malaysia with international tax standards.
Other key reforms include a new investment incentive framework slated for introduction by the third quarter of 2025, a real property gains tax self-assessment regime effective Jan 1, and the introduction of the single family office scheme by the first quarter, offering a 20-year income tax exemption and other benefits.
Businesses and individuals are urged to prepare for these wide-ranging changes to remain compliant and optimise tax strategies.
Further, Labuan’s tax framework will undergo notable changes starting in 2025. These include the introduction of ‘fit and proper’ criteria for full-time employees and the shift from the previous-year basis to the current-year basis for tax assessment.
This transition will result in two assessment years for 2025, affecting taxpayers’ cash flow. Additionally, Labuan will adopt self-assessment features to enhance compliance.
For corporate taxpayers, the Malaysian Income Tax Reporting System will mandate XBRL-based ((eXtensible Business Reporting Language) tax reporting from the 2025 tax year.
Businesses should prepare for the implementation of a self-assessment regime for stamp duty and the introduction of a carbon tax in 2026.
Thenesh said as businesses navigate the evolving tax landscape in 2025, staying informed and prepared will be key to maintaining compliance and seizing opportunities for growth.
“Tratax remains dedicated to supporting business decision-making by offering strategic insights and expert guidance on critical tax matters. By leveraging professional advice and proactive planning, businesses can better position themselves to thrive in a dynamic regulatory environment,“ he said.
