The Income Tax (Determination of Approved Individual and Specified Year of Assessment under the Returning Expert Programme) (Amendment) Rules 2024 [P.U. (A) 45/2024] amends the Income Tax (Determination of Approved Individual and Specified Year of Assessment under the Returning Expert Programme) Rules 2012 to extend the tax incentives provided under the Returning Expert Programme. The Income Tax (Determination of Approved Individual and Specified Year of Assessment under the Returning Expert Programme) Rules 2012 provide the framework and details for the tax incentives under the Returning Expert Programme.
Some key points on the 2012 Rules:
- It sets out the criteria for an “approved individual” to qualify for the tax incentives under the Programme. This includes being a Malaysian citizen who has been working overseas for at least 3 years and meets the expert criteria specified by the Minister.
- The tax incentive is a preferential flat tax rate of 15% on employment income for a period of 5 consecutive years. This is known as the “specified years of assessment”.
- The chargeable income subject to the 15% flat tax rate is calculated based on a formula that apportions the chargeable income from eligible Malaysian employment over the individual’s total aggregate income.
- Individuals have to apply and be approved under the Programme to qualify. The application window is from 12 April 2011 to 31 December 2023, per the Rules before this latest Amendment.
- The Rules will cease to apply if the individual stops employment in Malaysia during the incentive period.
In summary, the 2012 Rules govern the eligibility conditions, calculation of chargeable income and operational details on the Returning Expert Programme tax incentives.
These Amendment Rules simply amend rule 4(b) of the 2012 Rules to replace the expiry date of “31 December 2023” with “31 December 2027”.
This effectively extends the period that Malaysian citizens working overseas can apply to return under the programme and be eligible for the preferential 15% flat tax rate incentive for another 4 years till 31 December 2027.
In conclusion, the Income Tax (Determination of Approved Individual and Specified Year of Assessment under the Returning Expert Programme) (Amendment) Rules 2024 allows the Returning Expert Programme tax incentives to continue for another 4 years till the end of 2027 to attract more Malaysian talent abroad to return and contribute to the country’s economic growth.
We encourage readers to download the Income Tax (Determination of Approved Individual and Specified Year of Assessment under the Returning Expert Programme) (Amendment) Rules 2024 [P.U. (A) 45/2024] and the Income Tax (Determination of Approved Individual and Specified Year of Assessment under the Returning Expert Programme) Rules 2012 by clicking the attachments below for a comprehensive look at the contents:-
