The government has agreed to exempt taxation on foreign source income for resident taxpayers to ensure the smooth implementation of the tax initiative, said the Finance Ministry (MoF).(pic)

The tax exemption is effective from Jan 1, 2022 to Dec 31, 2026.

Subject to Inland Revenue Board criteria and guidelines, income tax exemption on dividends will be given to companies or limited liability partnerships while individuals will be tax-exempted for all types of income.

Meanwhile, the ministry also said that the stamp duty on contract notes for trading in shares will be capped at RM1,000, with a rate of 0.15%.

The stamp duty cap will be valid from Jan 1, 2022 to Dec 31, 2026.

“At Budget 2022, the government had proposed a stamp duty rate on contract notes for trading of stocks on Bursa Malaysia to be reviewed again, so that it is raised from 0.1% to 0.15%, which is equivalent to RM1.50 for every RM1,000 and a stamp duty limit of RM200 for each relevant contract note is repealed.

“Taking into account the views and feedback from various parties to ensure that the stock market remains vibrant and dynamic, the government is imposing a stamp duty rate of 0.15% on contract notes for the trading of shares, with the maximum amount of stamp duty charged per contract note being capped at RM1,000,” it said.

MoF added that stamp duty amounts exceeding RM1,000 will be remitted, adding that this remittance will apply to all contract notes for transactions of stocks listed on Bursa Malaysia.

“The government will always ensure that tax treatment of taxpayers is based on fair and equitable principles, while remaining committed to complying with international taxation best practices.”

Meanwhile, Bursa Malaysia Bhd chief executive officer Datuk Muhamad Umar Swift, in a separate statement, thanked the government for setting the stamp duty cap.

“On behalf of the industry, the exchange would like to state our appreciation to the Finance Minister and the MoF for the agility in responding to market operating conditions.

“This moderated approach to the changes on stamp duty exemplifies the government’s attentiveness to industry feedback and in managing the delicate balance between tax collection and nurturing growth in our capital market.”

Source: The Star, December 31, 2021