Mnzwaja Tax Budget 2027 Newsletter

MALAYSIA BUDGET 2027 TAX HIGHLIGHTS OCTOBER 2026 01 — Individual Taxation Updates to personal tax reliefs and income tax rates. 02 — Corporate Tax Proposed changes to corporate tax rates and capital allowances for eligible businesses. 03 — Stamp Duty Proposed stamp duty exemptions and financing-related relief measures. 04 — Indirect Tax Key changes to sales tax, service tax and other indirect tax measures. 05 — Tax Incentives & Investment Tax incentives to encourage investment, business expansion and sustainable economic growth. Tax Insights and Business Considerations Malaysia’s Budget 2027 introduces a range of tax measures with potential implications for businesses, investors and individual taxpayers. From changes to personal tax reliefs and corporate tax rates to enhanced investment incentives, these developments may influence financial planning and business decisions in the year ahead. What Businesses and Taxpayers Should Know:T A X S E R V I C E S S D N B H D

T A X S E R V I C E S S D N B H DDirector’s Commentary Muzammil bin Hafiz Managing Director, MNZWAJA Tax Services Sdn Bhd Tuan Haji Muzammil emphasises that to achieve sustainability and resilience, taxpayers have to change from reactive compliance to multi-year strategic tax planning and optimise incentives. Sustainable tax strategy is a catalyst to capital and business long-term growth. OCTOBER 2026 A proactive tax strategy supports long-term growth and sustainability

Management ’s InsightsT A X S E R V I C E S S D N B H D Tax incentives and sound tax policies can help businesses invest, grow and plan for the future Puan Siti Zaiton binti Buyong Executive Director, MNZWAJA Tax Services Sdn Bhd Puan Siti Zaiton views the proposed increase in subscription tax relief from RM9,000 to RM12,000 as a positive measure to provide greater tax savings for taxpayers, alongside the reduction in individual income tax rates to ease the tax burden on middle-income earners. She also considers the inclusion of digital and artificial intelligence (AI) application subscriptions under lifestyle tax relief a timely and relevant measure, given the growing role of technology in enhancing productivity and supporting digital needs for work and learning. OCTOBER 2026 Lower tax rates, increased tax relief and AI subscription benefits are positive steps towards easing taxpayers’ burdenBudget 2027 offers tax reliefs and incentives that cater to the needs of all segments of society Nurulhuda Binti Mohamed Raim Manager, MNZWAJA Tax Services Sdn Bhd Puan Nurulhuda highlights how Budget 2027 addresses the needs of all segments of society, from individuals and families to business owners. The various tax reliefs and incentives can help ease financial commitments while providing support for businesses to grow and expand.

INDIVIDUAL TAXATION- TAX RATES & RELIEF 1.Personal Tax Relief Annual individual tax relief proposed to increase from RM9,000 to RM12,000. 2.Individual Income Tax Rate Income tax rates for resident individuals reduced from 19% to 18% for chargeable income between RM70,001 and RM100,000, and from 25% to 24% for chargeable income between RM100,001 and RM150,000. Revised tax rate of 30% for chargeable income exceeding RM1,000,000. 3.Medical Expense Relief Postnatal care relief capped at RM3,000, with breastfeeding equipment relief retained and consolidated under Medical Expense Relief. 4.Parents' and Grandparents' Care Relief The existing relief limit of RM8,000 is proposed to remain unchanged. Eligible expenses will be expanded beyond healthcare to cover other care-related expenses.T A X S E R V I C E S S D N B H D OCTOBER 2026 5.Sports Equipment Relief The scope of eligible sports equipment purchases is proposed to include sports shoes. 6.Education and Skills Training Relief Tax relief expanded to cover all fields of study, including courses offered by professional bodies recognised by the MOF, TVET upskilling and self- enhancement courses (up to RM3,000), as well as courses and self-enhancement classes for taxpayers and their spouses, and tuition fees for children (up to RM2,000). 7.Lifestyle Relief Eligible expenses are proposed to include AI subscriptions, pet vaccination costs and pet adoption expenses. 8.SOCSO Contribution Relief The scope is proposed to include mandatory contributions to the LINDUNG KENDIRI scheme. An additional relief of up to RM150 is proposed for voluntary contributions to the LINDUNG 24 JAM and LINDUNG KENDIRI schemes. Key proposed changes affecting individual taxpayers

T A X S E R V I C E S S D N B H DAn Overview of Proposed Corporate Tax Measures CORPORATE TAX OCTOBER 2026 1.Reduced Corporate Income Tax Rates for MSMEs Corporate income tax rates for eligible micro, small and medium enterprises (MSMEs) are proposed to be reduced by one percentage point to ease operating costs and support business growth. The proposed rates are: 14% on the first RM150,000 of chargeable income, reduced from 15%. 16% on chargeable income from RM150,001 to RM600,000, reduced from 17%. The revised rates are expected to take effect from the Year of Assessment 2027, subject to the applicable eligibility requirements. 2.Increased Capital Allowance Limit for Small-Value Assets The qualifying value limit for each small-value asset eligible for capital allowances is proposed to increase from RM2,000 to RM3,000 per asset. For companies other than MSMEs, the overall annual claim limit for these assets is proposed to increase from RM20,000 to RM30,000. Eligible MSMEs will continue to benefit from the existing provision allowing full capital allowance claims on qualifying small-value assets without an overall annual limit. The proposed changes are expected to take effect from the Year of Assessment 2027, subject to the applicable conditions. 3.Extension of Accelerated Capital Allowance To enhance productivity and encourage investment in locally produced equipment, the Accelerated Capital Allowance (ACA) incentive is proposed to be extended for expenditure on qualifying locally produced plant and machinery, as well as information and communication technology (ICT) equipment and software. The incentive will be extended until 31 December 2030, subject to the applicable eligibility requirements and conditions.

T A X S E R V I C E S S D N B H DSTAMP DUTY 1.Exemption for Eligible Global Services Hub (GSH) Companies Eligible GSH companies undertaking treasury and fund management activities are proposed to receive stamp duty exemption on inter-company loan agreements, subject to the applicable conditions. The exemption also applies to qualifying activities under the Johor-Singapore Special Economic Zone (JS-SEZ) package. An Overview of Proposed Stamp Duty Measures OCTOBER 2026 3.Stamp Duty Exemption for First Residential Homes The Government proposes a full stamp duty exemption on loan agreements and instruments of transfer for first residential homes priced up to RM500,000. For homes priced above RM500,000 and up to RM750,000, the first RM500,000 will be fully exempt, while the remaining amount will qualify for a 50% stamp duty exemption. The proposal applies to sale and purchase agreements executed from 1 January 2027 to 31 December 2030. 2.Stamp Duty on Loans for Malaysian Ships Stamp duty on loan agreements for the purchase or construction of Malaysian ships is proposed to be fixed at: RM2,000 for loans of up to RM100 million. RM5,000 for loans exceeding RM100 million. 4.Stamp Duty Exemption for Abandoned Housing Projects A full stamp duty exemption is proposed for qualifying loan agreements and instruments of transfer executed by rescuing contractors or developers, as well as original purchasers of abandoned housing projects. The proposed exemption applies from 1 January 2027 to 31 December 2030, subject to the applicable conditions.

T A X S E R V I C E S S D N B H DSTAMP DUTY Financing Relief and Other Exemptions OCTOBER 2026 1.Stamp Duty Exemption for Savings and Current Accounts A full stamp duty exemption is proposed for the opening of savings and current accounts, effective 1 January 2027, subject to the applicable conditions. 3.Stamp Duty Relief for MSME Financing through Excess Credit Facilities Stamp duty of RM10 is proposed for agreements relating to the utilisation of excess credit facilities provided by financial institutions to mid-tier companies to support financing for MSMEs. The proposal applies to qualifying agreements executed from 1 January 2027 to 31 December 2030, subject to the applicable conditions. 2.RM10 Stamp Duty under the CAKNA Schemes The Government will reintroduce the RM10 stamp duty rate on loan and financing agreements under the CAKNA II Scheme from 1 January 2027 to 31 December 2030. The same rate will continue to apply under the CAKNA I Scheme until 31 December 2030. 4.Stamp Duty on Peer-to-Peer (P2P) Financing Loan agreements executed through qualifying peer-to-peer financing platforms are proposed to be subject to stamp duty of RM10 from 1 January 2027 to 31 December 2030.These financing measures are intended to help reduce financing costs and support business cash flow.

T A X S E R V I C E S S D N B H D1.Service Tax on Elderly Care Services The service tax rate for elderly care services is proposed to be reduced from 8% to 6%, effective 1 January 2027. A full exemption is also proposed for care fees of up to RM96,000 per year, subject to the applicable conditions. 2.Sales Tax Refund for Local Traders and Distributors A sales tax refund is proposed for local traders and distributors supplying machinery, spare parts, equipment and selected inputs to manufacturers, effective from 1 January 2027. 3.Increased Duty-Free Allowance for Langkawi and Labuan The duty-free allowance for imported goods and goods subject to sales tax purchased by visitors to Langkawi and Labuan is proposed to increase to RM10,000, subject to a minimum stay of 48 hours. The proposed change will take effect from 1 January 2027. 4.Entertainment Duty Exemption in the Federal Territories A full entertainment duty exemption is proposed for local films and theatrical performances, as well as events held at Stadium Merdeka and Stadium Negara, effective from 2027. INDIRECT TAX - KEY MEASURES OCTOBER 2026 An overview of proposed indirect tax measures affecting consumers, visitors and businesses.

T A X S E R V I C E S S D N B H DTAX INCENTIVES & INVESTMENT 1.Reinvestment Allowance (RA) The Reinvestment Allowance (RA) incentive is proposed to undergo a review. 2.Maritime Transport Incentive The full income tax exemption on statutory income derived from transporting passengers or cargo using Malaysian ships, or from chartering Malaysian ships, is proposed to be extended until Year of Assessment (YA) 2036. 3.Relocation Incentive for Automotive Vendors A tax deduction of up to RM5 million is proposed for wholly Malaysian-owned automotive vendors relocating to the Automotive Hi-Tech Valley in Tanjong Malim. Eligible expenditure must be incurred between 1 January 2027 and 31 December 2030, subject to the applicable conditions. 4.Shariah-Compliant Fund Management A 40% income tax exemption is proposed for eligible providers of Shariah-compliant fund management services for YA 2028 to YA 2030. 5.Sukuk Prisma Issuance costs relating to Sukuk Prisma approved by the Securities Commission Malaysia are proposed to qualify for tax deductions for YA 2027 to YA 2030. OCTOBER 2026 Overview of proposed tax incentives to support investment, business expansion and sustainable economic growth.

T A X S E R V I C E S S D N B H DTAX INCENTIVES & INVESTMENT (CONTINUED) OCTOBER 2026 Overview of proposed tax incentives to support investment, business expansion and sustainable economic growth. 6.SRI Sukuk and Bond Grant Scheme Grants received under the Sustainable and Responsible Investment (SRI) Sukuk and Bond Grant Scheme are proposed to be exempt from income tax with effect from 1 January 2027. 7.Green and Sustainable Technology Incentives The relevant green and sustainable technology incentives are proposed to be extended until 31 December 2030. The incentives include: Investment Tax Allowance (ITA) of up to 100% for qualifying green and sustainable technology projects. Incentives for electric vehicle (EV) charging station projects. Incentives for qualifying green assets acquired for businesses' own use. 8.Equity Crowdfunding and Angel Investors The tax exemptions available to individual investors participating in equity crowdfunding and to angel investors are proposed to be extended until 31 December 2030, subject to the applicable requirements. 9.Business Events and Tourism Incentives Incentives for qualifying international-standard incentive trips, conferences and trade exhibitions are proposed to be extended until YA 2030.

T A X S E R V I C E S S D N B H DOCTOBER 2026 CONTACT US Our Branches Across Malaysia HEADQUARTERS — SELANGOR No. 22, Jalan Kota Raja E 27/E Hicom Town Centre, Seksyen 27 40400 Shah Alam Selangor Darul Ehsan Tel: 03-5103 4777 / 016-227 0376 PIC: Farah Fasihah binti Hamizi PERAK Ipoh Branch 43A Medan Soon Choon 1 Jalan Raja Dr Nazrin Shah 31350 Ipoh, Perak Darul Ridzuan Tel: 016-226 5970 PIC: Nur Alyaa binti Yaacob Sitiawan Branch No. 10, Ground Floor, Wisma Tian Siang Jalan Datuk Ahmad Yunus 32000 Sitiawan, Perak Darul Ridzuan Tel: 05-692 4357 PIC: Nur Alyaa binti Yaacob PENANG No. 49, 2nd Floor Jalan Todak 4 Pusat Bandar Seberang Jaya 13700 Perai, Pulau Pinang Tel: 04-397 2085 / 04-3866 899 PIC: Rafiah binti Ramli NEGERI SEMBILAN No. 631, 1st Floor Jalan Haruan 4/9 Oakland Commercial Centre 70300 Seremban, Negeri Sembilan Darul Khusus Tel: 06-6323 078 / 06-6010 656 / 016-661 1049 PIC: Mohd Haziq Emir bin Mohd Nasri JOHOR Johor Bahru Branch No. 11-01, Jalan Cengkerik 3 Pusat Perdagangan Kempas 81200 Johor Bahru, Johor Darul Takzim Tel: 07-2350 473 / 016-229 9430 PIC: Sharifah Norkhairina binti Syed Khaidzir Muar Branch No. 5-1, Jalan Prima Sakeh 2 Pusat Perniagaan Prima Sakeh 84000 Muar, Johor Darul Takzim Tel : 016-661 1049 PIC: Mohd Haziq Emir bin Mohd Nasri PAHANG No. 13A, 1st Floor, China Town Jalan Putra Square 3, Putra Square 25200 Kuantan, Pahang Darul Makmur Tel: 09-5173 606 PIC: Hanisah binti Mohd Ali MELAKA No. 84-1, Jalan TU 40 Taman Tasik Utama 75450 Ayer Keroh, Melaka Bandaraya Bersejarah Tel: 06-2519 489 / 016-226 5263 PIC: Melisa Suhaila binti Musa SABAH No. F-2-4, Lot 34, Block F 2nd Floor, Lorong Plaza Utama Plaza Utama Alamesra 88400 Kota Kinabalu, Sabah Tel: 088-485 245 PIC: Muhammad Shafiq Amri bin Lamat

T A X S E R V I C E S S D N B H DOCTOBER 2026Disclaimer : The content of this publication is provided for general informational purposes only and should not be considered as advice tailored to the circumstances of any specific individual or organisation. While reasonable efforts have been made to ensure that the information is accurate and up to date, no representation or warranty is given as to its accuracy, completeness or continued validity. Tax laws, regulations and interpretations may change over time. Readers are advised to seek appropriate professional advice based on their specific circumstances before making any decisions or taking action in reliance on the information contained in this publication.mnzwajataxservicessdnbhdFollow us on