Healy Consultants can assist Clients with all aspects of their tax planning in Malaysia. When undertaking any tax planning in Malaysia, it is important to note the following:

When tax planning in Malaysia, a Company's taxable income is calculated on the audited accounting profit, as adjusted for tax purposes, for the accounting year ending in the preceding calendar year.

When tax planning in Malaysia, a Company is considered to be tax resident in Malaysia if the control and management of its businesses or one of its businesses is exercised in Malaysia.

When tax planning in Malaysia, note that companies are generally subject to Malaysian tax on income accruing in or sourced from Malaysia. Offshore income remitted by Companies resident in Malaysia is typically tax-free in Malaysia. Note when tax planning in Malaysia that banking, air and sea transportation businesses and insurance businesses conducted by residents are, however, taxed worldwide regardless of whether or not the income is remitted to Malaysia.

Tax planning in Malaysia should also involve the close study of the Double Tax Treaties the country has signed with 68 countries around the world. Some of the benefits of tax planning in Malaysia via the country's double tax treaty network include 'tax sparing'. Under the 'tax sparing' provision, a dividend which is distributed from tax exempt profits under the Malaysian tax incentive regime is deemed to be have been paid out of taxed profits. This enables a non-resident to claim a tax credit on the exempt dividend in his home country. Likewise, interest on an approved loan or approved royalty, which is exempt from Malaysian tax, is deemed to have paid Malaysian tax.

When tax planning in Malaysia, note that Companies are liable to pay withholding tax on the following types of payment made to a non-resident: interest, royalties, contract and other service fees, lease rentals (for movable property) and technical fees. The rates of withholding are 10 per cent, 15 per cent or 20 per cent of the gross payment.

Both resident and non-resident corporations are subject to income tax of 25% on taxable income.

When tax planning in Malaysia, note that business losses incurred in the current basis period for a tax year can be offset against any other income generated in the same year. Unabsorbed business losses can be carried forward indefinitely but can only be set-off against future business income and not against any other income. Note also when tax planning in Malaysia that unused capital allowances may be carried forward and set-off against adjusted income from the same business source only.