Siena:Tax incentives for Malaysian shipping companies are set to be reviewed as part of efforts to bolster the Malaysian shipping fleet and decrease reliance on foreign vessels. This initiative aims to enhance the inflow of ship freight revenue into Malaysia over the long term.

According to BERNAMA News Agency, The Ministry of Finance has announced that a full income tax exemption will be available to Malaysian shipping companies, contingent upon strategic management and effective control being executed within Malaysia. Additionally, these companies must incur annual operating expenditures of at least RM250,000 for each Malaysian ship.

A further condition for the tax incentive is the employment of at least four Malaysian workers per ship, each earning an average monthly salary of RM15,000.

The Ministry also noted revisions in stamp duty, with a maximum limit of RM2,000 for loan or financing agreements up to RM100 million and RM5,000 for those exceeding RM100 million related to the purchase or construction of Malaysian ships.

Full stamp duty exemption remains in place for instruments executed by a Labuan entity in connection with a Labuan business activity, as per the Stamp Duty (Exemption) (No. 3) Order 2012. The income tax exemption will apply from the years of assessment 2027 until 2036, while the stamp duty limits will apply to agreements executed from January 1, 2027.