In today’s 2023 Budget Speech, the Malaysian government joined the growing number of countries that have announced they will be implementing the 15% global minimum tax under Pillar Two.
Whilst the Budget Speech is, as you’d expect, lacking any detail, the Finance Minister said:
‘…To enable Malaysia to broaden its tax base while remaining competitive in attracting foreign direct investment, the Government will introduce a minimum effective tax rate globally as recommended under Pillar 2 of the BEPS 1 Action Plan and intend to implement the Qualified Domestic Minimum Top-up Tax after further research is made and targeted in 2024…’
Malaysia is therefore to both implement Pillar Two and enact a qualified domestic minimum top-up tax in 2024.
The OECD Report on Tax Incentives and Pillar Two recommends that jurisdictions consider implementing a qualifying domestic minimum top-up tax.
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