Malaysia Budget 2027: 10 Tax Changes Every Business Owner Should Know
Published: 23 October 2026 | Reading time: 5–6 minute
Malaysia Budget 2027 introduces several proposed tax changes that could affect how businesses manage their taxes, expenses and cash flow.
From lower income tax rates for micro, small and medium enterprises (MSMEs) to expanded capital allowances and stamp duty relief, these measures could create opportunities for Malaysian businesses to reduce costs and plan more effectively.
But what do these changes actually mean for your business?
Here are 10 key Malaysia Budget 2027 tax proposals, explained in simple terms.
1. Lower Income Tax Rates for MSMEs
One of the most significant Budget 2027 proposals is a reduction in income tax rates for eligible MSMEs.
The proposed rates for the Year of Assessment (YA) 2027 are:
Chargeable income | Proposed tax rate |
First RM150,000 | 14% |
RM150,001–RM600,000 | 16% |
Above RM600,000 | 24% |
The first two bands represent a one-percentage-point reduction from the existing rates.
What this means for your business:
Eligible MSMEs could save up to RM6,000 annually in income tax, depending on their chargeable income. These savings could help businesses manage operating expenses or reinvest in growth.
2. Higher Capital Allowance Limits for Small-Value Assets
Businesses regularly purchase equipment such as office furniture, computers and other tools.
Budget 2027 proposes increasing the qualifying small-value asset limit from RM2,000 to RM3,000 per asset.
For companies other than qualifying MSMEs, the overall annual claim limit would also increase from RM20,000 to RM30,000.
What this means for your business:
More equipment purchases may qualify for small-value asset capital allowances, potentially reducing taxable income. Businesses should review their planned purchases and keep accurate asset records.
3. Revised Tax Deduction Rules for Salary Payments
Budget 2027 proposes stricter conditions for salary expense deductions for companies other than qualifying MSMEs, beginning in YA2028.
Under the proposal, salary expenses would generally need to be paid through financial institutions or prescribed cashless payment instruments to qualify for tax deductions.
What this means for your business:
Businesses affected by this proposal should review their payroll procedures and payment records to ensure salary expenses remain eligible for tax deductions.
4. Stamp Duty Exemption for Opening Bank Accounts
From 1 January 2027, a full stamp duty exemption is proposed for qualifying instruments used when opening savings or current accounts.
The exemption applies to eligible account-opening instruments, rather than every fee associated with opening or maintaining a bank account.
What this means for your business:
Businesses opening new accounts may benefit from lower documentation costs where the exemption applies.
5. Revised Stamp Duty for Foreign Currency Loans
Budget 2027 proposes revised stamp duty limits for foreign currency loan agreements.
The proposed stamp duty caps are:
RM2,000 for qualifying loans up to RM100 million.
RM5,000 for qualifying loans exceeding RM100 million.
The proposed effective date is 1 January 2027.
What this means for your business:
Companies using foreign currency financing may benefit from greater certainty over stamp duty costs when structuring qualifying loan agreements.
6. Changes to Peer-to-Peer (P2P) Financing Stamp Duty
Peer-to-peer financing provides businesses with an alternative way to obtain funding.
Budget 2027 proposes replacing the existing full stamp duty exemption for eligible P2P financing agreements with a remission mechanism, resulting in RM10 stamp duty payable.
The proposed change begins on 1 January 2027.
What this means for your business:
Businesses exploring P2P financing should include the revised stamp duty treatment when evaluating financing costs.
7. Extension of Accelerated Capital Allowance (ACA)
The government proposes extending the Accelerated Capital Allowance incentive for qualifying expenditure on locally sourced plant and machinery, as well as eligible ICT equipment and software, until 31 December 2030.
What this means for your business:
Businesses planning investments in machinery, productivity improvements or digitalisation may be able to claim qualifying capital allowances more quickly, subject to the relevant rules.
8. Tax Deductions for Employers Repaying PTPTN Loans
Employers who repay employees' National Higher Education Fund Corporation (PTPTN) loans may qualify for a tax deduction under the Budget 2027 proposal.
The incentive covers eligible repayments made from 1 January 2027 to 31 December 2028, subject to conditions.
What this means for your business:
Eligible employers may consider PTPTN repayment assistance as part of their employee benefits strategy while assessing the potential tax deduction.
9. Sales Tax Refunds for Eligible Local Traders
Budget 2027 proposes a sales tax refund facility for eligible local traders and distributors supplying specified goods to manufacturers.
This includes qualifying machinery, spare parts, equipment and certain raw materials.
What this means for your business:
Eligible traders and distributors may be able to recover sales tax paid on qualifying goods. Proper invoices, transaction records and supporting documentation will be important.
10. Green Technology Tax Incentives
Budget 2027 also proposes revisions and extensions to selected Green Investment Tax Allowance (GITA) incentives.
The measures are intended to support qualifying investments in green technology projects and assets, with selected incentives covering the period from 1 January 2027 to 31 December 2030.
What this means for your business:
Businesses considering eligible green technology investments should assess whether their planned projects or assets meet the relevant incentive requirements.
What Should Malaysian Business Owners Do Next?
Although many of these proposals are scheduled to take effect in 2027, businesses can start preparing now.
Consider taking these practical steps:
Review your tax position. Determine whether your company qualifies for the proposed MSME tax rates and other incentives.
Check your accounting records. Ensure purchases, payroll expenses and financing transactions are properly documented.
Plan upcoming investments. Review equipment, ICT and green technology expenditure against potential tax incentives.
Monitor official announcements. Follow the final legislation and guidance before applying any proposed tax treatment.
Seek professional guidance. Consult a qualified tax professional to understand which measures apply to your business.
Need Help Understanding How Budget 2027 Affects Your Business?
Tax changes can create opportunities, but understanding eligibility, documentation requirements and compliance obligations is essential.
CR Consultancy supports businesses with accounting, and related business services.
If you're unsure how the proposed Malaysia Budget 2027 tax changes could affect your company, our team can help you review your situation and identify the next steps.
Contact CR Consultancy to discuss your business financial needs.
Disclaimer: This article summarises selected proposals announced under Malaysia Budget 2027 as of 23 October 2026. The measures remain subject to legislation, eligibility requirements and official implementation guidelines. This article is for general information and does not constitute professional tax advice.
Sources: Ministry of Finance Malaysia, Budget 2027 speech and tax measures announced on 9 October 2026.
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