From January 1, 2025, investors in the Johor-Singapore Special Economic Zone (JS-SEZ) can benefit from a special corporate tax rate of 5% for 15 years and special worker’s tax rate of 15% for 10 years.
In contrast, the existing corporate tax rate in Malaysia currently stands at 24% for both resident and non-resident companies.
This was announced on Jan 8 by the Malaysian ministry of finance and Johor state government, following the signing of the JS-SEZ on Jan 7. These new tax incentives are made in a bid to “foster economic growth and enhance the nation's competitive landscape”, according to the release.
Companies that undertake new investment in qualifying manufacturing and services activities, such as artificial intelligence (AI) and quantum computing supply chain, medical devices, aerospace manufacturing and global services hub can qualify for the special corporate tax rate.
Meanwhile, additional tailor-made incentives are allocated to businesses operating in certain flagship areas in JS-SEZ, the announcement reads.
In addition to the tax incentive package, Johor’s chief minister Onn Hafiz said the Johor state government had agreed to introduce lower entertainment duties as well.
These incentives are on top of the previously announced tax incentives in regions within the newly announced JS-SEZ.
Last September, Malaysian prime minister Anwar Ibrahim said that Forest City will be a special financial zone with 0% corporate tax rate for family offices under the Single-Family Office scheme (SFO) for up to 20 years, while corporate tax rates will be kept between 0%-5%.
A 15% flat income tax rate for knowledge workers and Malaysians employed in the Forest City special financial zone, and a 5% tax rate for global business services, financial technology, and foreign payment system operators will be implemented.
