KUALA LUMPUR – The government has proposed a 50% further tax deduction on expenses borne by employers for capacity building and software acquisition to implement flexible working arrangements (FWA) under Budget 2025.
According to the Finance Ministry (MoF), the eligible spending for deductions is capped at RM500,000.
“(It is) subject to a one-off claim and to be verified by Talent Corporation Malaysia Bhd (Talent Corp),” said the ministry.
The deduction aims to encourage more employers to offer flexible working options and promote work-life balance. It applies to applications submitted to Talent Corp from January 1, 2025, to December 31, 2027.
Additionally, the government is offering tax incentives for employers who provide caregiving leave benefits to cushion financial loss and support job retention, aligning with a care-focused economy.
Thus, a 50% further deduction is proposed for employers who offer up to 12 months of additional paid leave for employees caring for children, or ill or disabled family members.
The tax incentive is effective for applications received by Talent Corp from January 1 next year until December 31, 2027
Tax relief for first homes not for profit-making
For individual income tax relief on housing loan interest payments for a first home, MoF specified that the relief only applies if the home is not used to generate income.
Additionally, the sales and purchase agreement (SPA) must be executed from January 1 next year until December 31, 2027.
MoF stated that the tax relief on interest payments is applicable for three consecutive assessment years, starting from the year the housing loan interest is first paid.
Furthermore, two or more individuals can claim tax relief on the same home’s loan interest, based on their share of the interest payments. – October 19, 2024