Special Tax Incentive under PENJANA for the Services Sector

The Government has announced the Special Tax Incentive under the Economic Recovery Plan (PENJANA) on 5 June 2020 for manufacturing companies that wish to relocate their manufacturing businesses to Malaysia.

Under Budget 2021, the Government has stated its commitment to spurring economic recovery through investment in key sectors and making Malaysia a destination for high-value service activities. Therefore, the Special Tax Incentive scope has been expanded to selected services activities, including companies adapting Industrial Revolution 4.0 and digitalisation technology which have a significant multiplier effect.

In addition to the Special Tax incentive, the Government also announced the Special Income Tax Rate at a flat-rate of 15% for a period of 5 consecutive years to non-residents individuals holding key position (C-Suite) for strategic investments made by companies relocating their operations to Malaysia.