1. OCTOBER 2012 in NEW ORLEANS

2. GEP ASSOCIATES

3.  Population : 28.86 million as at December 2011  English speaking with 2 official languages  Safe and green; stable government  Technology based  GDP : RM456,291,000,000 as at second quarter of 2012  King of fruit : Durian  Strong family bonding GEP ASSOCIATES

4.  TAXATION  Corporate Taxes  Personal Taxes  Capital Gains  Losses  Withholding Taxes  Double Tax Treaties  VAT/Sales Taxes  INVESTMENTS INCENTIVES  IMPORTANT COMMERCIAL LEGAL ASPECTS  Exchange control  Major labour laws  2013 BUDGET HIGHLIGHTS GEP ASSOCIATES

5.  A company (resident or not) is assessable on income accrued / derived in Malaysia  Overseas income is exempted from tax, except banking and insurance business, and sea and air transport undertakings  Resident in Malaysia means the control and management of its affair are exercised in Malaysia GEP ASSOCIATES

6.  Companies subject to corporate income tax, RPGT and sales & service tax  Tax rate for SME is 20% on the first RM500,000 on the chargeable income and 25% on the exceeding amount  Tax rate for Non-SME is 20% on the chargeable income  Single tier system replace the imputation system from YA 2008; where dividend is non-taxable on the hands of the recipients  Transitional period is given to companies up to 31 December 2013 GEP ASSOCIATES

7.  Income accrued in and derived from Malaysia or received in Malaysia from outside Malaysia is liable to tax on all individuals  Income remitted to Malaysia by a resident individual is tax exempted  A non-resident individual will be taxed only on income earned in Malaysia GEP ASSOCIATES

8.  Resident status is granted for those who stay in Malaysia for a minimum of 182 days in a calendar year  Residents are taxed on his chargeable income after deducting personal relief at a sliding scale from 0% to 26%  Non-residents are taxed at a flat rate of 26% on Malaysia-source income without any personal relief  However, rebates can be claimed in respect for fees paid to the Government for the issuance of an employment permit GEP ASSOCIATES

9.  Malaysia does not tax capital gains from the sale of investments or capital assets other than land and buildings  W.e.f. 01.01.2013; chargeable gains made by individuals and companies are subject to RPGT as follows :-  Disposal within 2 years 15%  Disposal between 2 to 5 years10%  Disposal after 5 years Tax exempted GEP ASSOCIATES

10.  Losses may be carried indefinitely forward except for dormant companies with substantial change in the ownership  Losses carried forward may offset income from all business source  Carry back losses is not allowed except for the year 2009 and 2010 up to a maximum of RM100,000  Carry back losses is where current year losses can be carried back to the immediate preceding year GEP ASSOCIATES

11.  Non-residents are subject to final WHT 1.10% on special classes of income a)services rendered in connection with the use of property or rights, installation of or operation of any plant, machinery or other apparatus b)technical advice, assistance or services rendered in connection with technical management or administration; or c)rent or other payments made under any agreement or arrangement for the use of movable property WHT is not applicable to (a) and (b) if services performed outside Malaysia GEP ASSOCIATES

12. 2.15% on the interest paid to non-residents 3.10% on royalties and technical fees paid to non- residents 4.10% on gains or profits falling under section 4(f); i.e. income that is not business, employment, dividend, interest, discount, rent, royalty, premium, pension, annuity or other periodical payments. Refers to one-off income received by the non- resident Note :-  WHT may be waived or reduced under the applicable tax treaty for income 1-3.  No WHT is imposed on dividends paid to non- residents GEP ASSOCIATES

13.  The objective of Malaysian tax treaty :-  To create favorable climate for both inbound and outbound investments  To make Malaysia’s tax incentives fully effective for taxpayers of capital exporting countries  To obtain more effective relief from double taxation compared to relief gained under unilateral measures  To prevent evasion and avoidance of tax  To provide investor with certainty and guarantees in the area of taxation GEP ASSOCIATES

14.  WHT may be reduced under an applicable tax treaty  Where the rate of WHT is not specifically mentioned in the respective tax treaty, the applicable tax rate in the Malaysian Income Tax Act 1967 (the Act) will be used  If the tax rate in the Act is lower than the maximum rate in the respective tax treaty, the lower rate of tax shall apply GEP ASSOCIATES

15.  No VAT is implemented in Malaysia  However, Goods and Service Tax (GST) is expected to be introduced to replace the existing sales & service tax regime  Sales tax between 5% to 10% applies to taxable goods; imported or locally produced  Manufacturers are exempted from paying sales tax on raw materials and packaging materials used directly in producing taxable finished goods  Refund of sales tax are available to exporters and manufacturers whose goods are subsequently re- exported GEP ASSOCIATES

16.  Direct and indirect incentives covers  Manufacturing  Agriculture  Tourism  Approved services sector  Research and development  Training and environment protection activities  Direct incentives  Pioneer status  Investment tax allowances  Reinvestment allowances  Group relief  Accelerated capital allowance grant partially or total relief from income tax payment for a specified period  Indirect incentives  Exemptions from import duty, sales tax and excise duty GEP ASSOCIATES

17.  Repatriations of capital, profits and income are freely permitted; to include :-  Dividend  Interest  Royalties  Rental  Commissions  Foreign exchange rules have been relaxed or eliminated GEP ASSOCIATES

18.  Employment Act 1955  EPF Act 1991  Employees’ Social Security Act 1969  Workman’s Compensation Act 1952  Occupational Safety & Health Act 1994 GEP ASSOCIATES

19.  2013 Budget was announced on 28.09.2012 to focus on both long-term growth of the economy and the lower-income groups  Review of the Tax System  Review of Individual Income Tax  Time Bar for Tax Assessments  Real Property Gains Tax  Limited Liability Partnership  Business Trust  Withholding Tax – New Section 109H – Appeal by payer  Change in tax treatment of interest income  Treasury shares  Assets held for sale GEP ASSOCIATES

20. THANK YOU GEP ASSOCIATES