a) Latest Update: Wage Subsidy Program (WSP)
The wage subsidy program will be extended to all eligible employers for another three (3) months at a subsidy rate of RM 600 per month.
The wage subsidy program will also be improved as follows:
• Allows employers to implement reduced working hours weekly (example: working 4 days a week) and a reduction of 30% with employee consent.
• Provide flexibility for employers to allow workers receive a direct wage subsidy for those who have taken unpaid leave, provided the employee receives a wage subsidy directly (for the tourism sector and the sector which are listed in activities that are prohibited throughout the Conditional Movement Control Order.
To recap on the Wage Subsidy Program, kindly refer to table below:
b) Extension of Other Incentives
Special Deduction for Rental Discount given to SME Tenants
A special tax deduction equivalent to the amount of reduction in rent that is given to SME tenants was announced for the months of April, May and June 2020. Further details can refer to our Tax Updates Issue 33/12.05.2020.
The special tax deduction will be extended for another 3 months to cover rental for the months of July, August and September 2020.
Deduction for Renovation and Refurbishment Expenses
To encourage businesses to carry out renovation and refurbishment of their business premises, it was announced under the Economic Stimulus Package that a special deduction is given for the renovation and refurbishment expenditure up to a limit of RM 300,000 for capital expenditure incurred during the period of 1 March 2020 to 31 December 2020.
The deduction will not be given if the expenditure is claimed as an allowance under Schedule 2 or Schedule 3 of the Income Tax Act 1967.
The special deduction will be extended to cover expenditure until 31 December 2021.
Deduction/allowance on personal protective equipment (PPE), thermal scanners and
Expenditure incurred in providing employees with disposable personal protective equipment (PPE) such as face masks is deductible under section 33(1) of the Income Tax Act; while expenditure in providing non-disposable PPE to employees can be claimed as capital allowance.
The scope of the above measures will be expended to cover expenditure for COVID-19 testing and purchase of thermal scanners. The period of these incentives is to be extended. However, the period of extension is not provided.
c) Other Incentives
d) Incentives for SMEs
Small and Medium Enterprises (SMEs)
e) Flexible Work Arrangements (FWA) Incentives
Tax Exemption up to RM5,000 for provision of mobile phones, laptops and tablets to employees
To encourage and support employers, especially in the SME sector, to adopt work-from home practices, a tax exemption of up to RM5,000 will be given to employees who receive a mobile phone, notebook and tablet from their employer.
Personal tax relief of RM3,000 for fees paid to child care centre
To encourage parents to re-enrol or send their children to child care centres, the tax relief will be increased from RM 2,000 to RM 3,000.
Special personal income tax relief on the purchase of mobile phone, notebook & tablet
A special personal income tax relief of up to RM2,500 will be given to resident individuals for the purchase of mobile phones, notebooks and tablets. As the expenses are already covered under the current lifestyle relief, clarity is required on whether this is a new separate tax relief from the existing lifestyle tax relief.
Further Tax Deduction for Implementation of FWA
Announced that further deduction will be given to employers which implement FWA or enhance their existing FWA. Types of expenses that qualify for further deduction is not stated.
f) Remission of penalties for late payment of sales and service tax (SST)
A 50% remission of penalty for late payment of SST due and payable from 1 July 2020 to September 2020 will be given.
If you need further clarification, please do not hesitate to contact our tax team.
Photo credit: https://pxhere.com/en/photo/1449979
(Prime Minister announcement as at 05.06.2020)
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