Malaysia's 2018 Budget includes a number of initiatives to help drive the economy. But the most important action for the business community to prepare for is the implementation of BEPS action points and the CRS.
Malaysia's 2018 Budget was unveiled on 27 October by Prime Minister and Minister of Finance 'Datuk Seri Najib Tun Razak. There are a number of business-focused initiatives in the budget, which will be actioned over the course of the next year. One of the highlights of the budget is Malaysia's commitment to joining the OECD's Base Erosion and Profit Shifting (BEPS) and Common Reporting Standard (CRS) information-sharing initiatives in September 2018. I will outline more about these initiatives below, but first let's take a brief look at other budget initiatives for business.
Private investment is expected to outpace public investment in Malaysia in 2018, with further government promotion of the five Main Corridors and an extension of the Principal Hub tax incentive until 31 December 2020. The government is introducing a financing support scheme, subsidies and training grants for SMEs to further support their growth. The aim is to have the small-to-medium-sized enterprise sector contributing 41% of Malaysia's GDP by 2020. Venture capital activities will be promoted through various incentives such as a RM 1bn investment fund coordinated by the Securities Commission. Incentives such as income tax exemptions will also be on offer for venture companies across certain categories including management and performance fees, and there will be incentives for individual angel investors. GST relief will be provided to airline and shipping companies registered in Malaysia. The relief will also cover oil & gas companies registered in Malaysia for importing oil rigs and floating structures. A Digital Free Trade Zone (DFTZ) will be established to stimulate growth and transform Kuala Lumpur International Airport into a regional gateway for electronic trade. BEPS and CRS
The Common Reporting Standard (CRS) is a major movement towards a globally coordinated approach to the exchange of financial information about individuals and organisations between governments. The OECD has put forward a global standard for the annual automatic exchange of financial account information...