Malaysia: Tax proposals in budget for 2023, including domestic minimum top-up tax

Tax-related proposals

Includes domestic minimum top-up tax

The Minister of Finance today tabled the 2023 budget, which includes the following tax-related proposals:

  • 2% reduction of income tax rate (from 17% to 15%) on first RM100,000 of income for certain micro, small and medium enterprises
  • 2% reduction in individual (personal) income tax rate for individuals with taxable income ranging from RM50,001 to RM100,000, and 0.5% increase for individuals with taxable income ranging from RM250,001 to RM400,000
  • Extension to 20 years for certain companies to carry forward unabsorbed tax losses
  • Qualified domestic minimum top-up tax of 15% in 2024
  • Introduction of carbon tax—the government is evaluating the specific mechanism for the tax and no specific implementation date has been announced
  • Review of green technology tax incentives
  • Tax incentive for manufacturer of electric vehicle charging equipment
  • Tax incentives for carbon capture and storage
  • Tax incentive for rental of electric vehicle
  • Extension of certain existing tax incentives
  • Reinvestment allowance for hotels and selected tourism projects
  • Review of tax incentive for tour operators
  • Tax incentive for automation in manufacturing and services sector
  • Tax incentive for chicken rearing in closed house system
  • Stamp duty on exemption on loan restructuring or rescheduling
  • Import duty and sales tax exemptions on nicotine replacement therapy
  • Extension of import and excise duty exemptions on imported completely built units electric vehicles
  • Excise duty exemption on tourism vehicles
  • Extension of sales tax exemption on purchases of locally assembled buses
  • Expansion of excise duty and sales tax exemptions on sale, transfer, private use or disposal of individually owned taxis and hired cars
  • Import duty and sales tax exemptions on studio filming production equipment
  • Extension of import duty and sales tax exemptions period for certain shipbuilding and ship repairing companies
  • Implementation of e-invoicing

Read an October 2022 report [PDF 1.2 MB] prepared by the KPMG member firm in Malaysia


The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.