Loke: Tax exemption extension to attract shipping firms to Malaysia
PUTRAJAYA (Oct 12): In a move to boost the maritime sector, Malaysia has announced a 10-year extension of income tax exemptions for shipping companies. Transport Minister Anthony Loke stated that this extension, covering the years 2027 to 2036, aims to attract more shipping companies to register their vessels in Malaysia instead of in other countries offering tax incentives.
Greater Certainty for Long-Term Investments
Speaking at a news conference in Putrajaya, Loke emphasized that the income tax exemption would provide the maritime sector with greater certainty to plan long-term investments. Previously, shipping companies had to renew their income tax exemptions every two years, creating uncertainty that hindered long-term investments, including vessel purchases.
Prime Minister Datuk Seri Anwar Ibrahim announced the extension of the income tax exemption for Malaysian shipping companies until the 2036 year of assessment during the tabling of the 2027 Budget in the Dewan Rakyat. The theme of the budget was “Reaching For The Skies, While Anchored On Our Values.”
Fixed Stamp Duty Rates Introduced
Apart from the tax exemption, the government has introduced fixed stamp duty rates for financing the purchase or construction of vessels. Financing up to RM100 million will attract a stamp duty of RM2,000, while financing exceeding RM100 million will incur a duty of RM5,000. This marks a significant reduction from the previous stamp duty charges of 0.5% of the vessel or financing value.
Encouraging Investment in Shipping
Loke highlighted that the reduction in stamp duty rates would make investment in shipping more attractive, leading to increased vessel construction and investment in the maritime industry. The measures are expected to stimulate investment in vessel ownership and benefit Malaysia’s domestic shipping and shipbuilding industries, including in Sibu, Sarawak.
Welcoming the extension, Malaysian Shipowners’ Association (Masa) chairman Mohamed Safwan Othman expressed gratitude for the long-term certainty provided by the tax exemption. He credited Loke for persistently addressing this issue with the Finance Ministry, ultimately securing a tax exemption for a significantly longer period.
The extension of income tax exemptions and the introduction of fixed stamp duty rates are poised to enhance Malaysia’s position in the global shipping industry and foster growth in the domestic maritime sector.
