🚀 What SMEs Need to Know

The Malaysia Budget 2025 brings exciting new tax updates with fresh opportunities for businesses to maximize savings. This summary, prepared by Ms. Lim Nguan Lian, our Head of Client Relationship, highlights the most relevant tax changes for SMEs.

If you’re planning your 2025 budget or seeking ways to optimize expenses, these incentives will help you stay ahead. Don’t miss out on the potential savings!

Below is a breakdown of the latest updates :

1. Childcare & Elderly Care Allowance for Employees
   ✅ What’s New? Childcare allowance is now extended to cover elderly care for parents and grandparents.
   📅 Effective: From YA 2025.
2. Sponsorship of Smart AI-Driven Reverse Vending Machine (RVM)
   ♻️ Contributions towards RVMs are tax-deductible for two additional years.
   📅 Effective Period: 1 January 2025 – 31 December 2026.
3. Flexible Working Arrangements (FWA)
   💡 50% Additional Deduction on capacity-building and software acquisition costs related to FWA.
   💼 One-off Limit: Up to RM500,000.
   📝 Acknowledgment Required: Talent Corporation Malaysia Berhad.
   📅 Application Window: 1 January 2025 – 31 December 2027.
4. Care Leave Incentive
   ❤️ Employers offering up to 12 months of paid care leave for employees supporting sick or disabled family members can enjoy 50% additional deduction.
   📅 Application Period: 1 January 2025 – 31 December 2027 via TalentCorp.
5. Incentive for Hiring Women Returning to Work
   👩‍💼 50% Additional Deduction on employment costs for hiring women re-entering the workforce.
   📆 Eligibility: 12 months of employment.
   📅 Application Window: 1 January 2025 – 31 December 2027 via TalentCorp.
6. Developing New Courses at Private Educational Institutions
   📚 Faster Deduction: Full course development costs can now be deducted in the same year of assessment.
   🏫 Who Benefits? Private education institutions and TVET training institutes.
   📅 Effective Period: YA 2025 to YA 2030.
7. Accelerated Capital Allowance (ACA) for ICT Investments
   💻 Shorter Deduction Period: ACA can now be claimed within 2 years.
   🔢 Allowance Rates:
   Initial Allowance (IA): 20%
   Annual Allowance (AA): 40%
   📅 Effective Periods:
   YA 2024 to YA 2025
   YA 2025 to YA 2027

These incentives reflect the government’s push toward sustainability, workforce inclusivity, and business flexibility. Plan ahead to make the most of these opportunities and submit your applications on time.