05/06/2024 11:25 AM

KUALA LUMPUR, June 5 (Bernama) -- The new Investment Tax Allowance (ITA) will encourage existing small and medium enterprises (SMEs) that have exhausted their reinvestment allowance eligibility period to increase capacity and investment in high-value activities under the New Industrial Master Plan 2030.

KPMG partner and head of indirect tax Ng Sue Lynn said while the full guidelines have yet to be issued, the eligible rate will be determined using an outcome-based approach.

“SMEs can apply to the Malaysian Investment Development Authority from Jan 1, 2024 to Dec 31, 2028,” she said in a statement.

Also, Ng said ahead of the anticipated e-invoicing requirement, currently pending gazettement, SMEs can enjoy a special deduction of RM50,000 per year of assessment (YA) from YA 2024 to YA 2027 to support its implementation.

Some existing reliefs are still available, albeit with tightened eligibility, the statement said.

These include the start-up tax rebate, concessionary income tax rates and special capital allowance.

Ng, a fellow of the Association of Chartered Certified Accountants (ACCA) also highlighted that micro-credit loans below RM50,000 are exempted from stamp duties.

“Moreover, the digitalisation grant scheme is a recent collaboration between the Malaysia Digital Economy Corporation, Bank Simpanan Nasional the Malaysian Communications and Multimedia Commission.

“It offers a 50 per cent matching grant, capped at RM5,000 per entity, to help SMEs with digitalisation,” she said. 

To stay updated with the latest taxation requirements, Ng suggests attending regular training sessions, workshops and seminars organised by the tax authorities such as Lembaga Hasil Dalam Negeri (LHDN), the Royal Malaysian Customs Department and other government agencies, as well as organisations like the ACCA that provide regular update alerts. 

“These are the three most important things that SMEs need to do when it comes to filing taxes. First, revisit the status of your company to ensure it remains compliant with various regulatory requirements.

“Second, before claiming any incentives, ensure that your company meets the eligibility criteria, as most incentives have conditions. Third, do not wait until the last minute to get your paperwork in order,” Ng said.

As companies prepare for the eventual transition to e-invoicing, Ng suggested that business owners visit the LHDN portal for a comprehensive look at e-invoicing, which will become mandatory for all by July 1, 2025.

When equipped with the relevant knowledge, business owners can take the next steps such as educating staff and key stakeholders on the new requirements, and regularly assess business operations to ensure compliance with the issuing and receipt of invoices.

With the July 1, 2025 deadline for SMEs, she also advised looking into the company’s enterprise resource planning systems to ensure compatility with LHDN and that it is capable of issuing e-invoices.


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