Tax Incentives for Financial Services Companies
For financial services companies, here are some tax exemptions that are available:
Full income tax exemption is available on to Islamic banks licensed under the Islamic Financial Services Act 2013. All income earned from Islamic banking activities conducted in international currencies will be exempted
A complete income tax exemption is also applied to management fees received by resident fund management companies which have been established according to Islamic principles for the management of funds of foreign and local investors.
There are some companies under the Malaysia’s financial sector that are eligible for tax incentives, which include:
Special Purpose Vehicles for Islamic financing
Companies relayed to operation of Tun Razak Exchange
Real estate and property trust funds
Foreign Fund management companies
Tax Incentives for ICT Companies in Malaysia
In the ICT industry, tax incentives for tax residents are also available. These expenses will be tax exempted:
Offshore trading via websites based in Malaysia
Investments and expenditures related to MSC Malaysia or international trading companies
Any business activities related to principal hubs and transportation, warehousing and freight forwarding
To get tax incentives as an IT company in Malaysia, the company must register with the Malaysia Digital Economy Corporation (MDEC) to obtain the Malaysia Digital (MD) status.
Tax Incentives for Biotechnological Companies in Malaysia
Biotech companies which have received approval as Bionexus status are eligible for a complete offset of income earned through an investment tax allowance on qualifying capital expenditure for companies which have been in operation for 10 years or less.
Here are some other incentives:
The concessional tax rate for a business which is approved after its exempt tax period has expired for a period of up to 10 years is 0% of its statutory income
Profits derived from stamp duty and real property gains tax are tax-exempted for Bionexus companies
Exemptions are given to import duty for raw materials as well as components which have been imported by such companies.
Total investment made towards the seed capital of a Bionexus company is exempted from tax
Green Incentives in Malaysia
Green technology and equipment will receive an investment tax allowance when purchased. By the Malaysian tax resident companies of any sector.
The same income tax incentive is also given for the usage of green technology and services. Companies in the healthcare and wellness sector receive a 100% tax exemption on qualifying capital expenditures incurred on statutory income for a period of up to five  years.
Regional Operations and Tax Incentives
A principal hub is a locally incorporated company that uses Malaysia as a base for its Global and Regional operations through management, control, and support of critical functions. The tax incentives which are available for Malaysian tax residents and companies who conduct their regional operations in Malaysia include:
Equity or ownership conditions
Foreign exchange administration
Customs duty exemptions for raw materials, product components, or finished products brought into free zones
Licensed and bonded warehouses for production or repackaging, cargo consolidation, and integration before products are to be distributed to their final customers; this exemption only applies to goods-based companies
Malaysia Income Tax Reliefs
Tax relief allows one to reduce their chargeable income, subject to different requirements and conditions. The following is a non-exhaustive list of tax reliefs that a person can claim:
1. Individual & dependent relatives
Granted automatically to an individual for themselves and their dependents.
2. Medical treatment, special needs and expenses for parents
Claim: Up to RM8000
This sum is inclusive of care and treatment by nursing homes and non-cosmetic dental treatment. It must be conducted by a registered medical practitioner or written certification of a qualified carer. Parents must reside and treatment must be provided in Malaysia.
3. Husband or Wife or Alimony
Claim: Up to RM 4000
This claim can only be made if your spouse has no source of income, or if he/she chooses to set up a joint assessment in your name. You cannot claim this relief if your spouse has a gross income of more than RM4000 derived from sources outside of Malaysia.
4. Breastfeeding equipment
Claim: Up to RM1000 per mother
This claim can be made if an individual is a breastfeeding mother and has purchased breastfeeding equipment for her own use, on her own child ages 2 years or younger. This claim can only be made once every 2 years.
5. Ordinary child relief
Claim: RM2000 per child
This claim can be made for each unmarried child below the age of 18, at any time during the year of assessment.
6. Education and medical insurance
Claim: Up to RM3000
This relief can be claimed for the payment of insurance premiums related to education or medical benefits. This is applicable to yourself, your spouse, or your child. Each of them is subjected to his/her own sum of RM3000. Couples who opt for a joined assessment, however, will face a deduction limit of RM3000.
7. Child in full-time education
Claim: RM2000 or RM8000 per child
A deduction of RM2000 can be claimed for each unmarried child of age 18 years and above, who is receiving full-time education. A deduction of RM8000 can be made if an unmarried child is 18 years of age and above, and is not in full-time education, is not serving under articles of indentures to qualify in a trade or profession in Malaysia, and is not pursuing a full-time degree outside Malaysia.