Tax Exemption for Women Returning to Workforce Gazetted
27 August 2019
The Income Tax (Exemption)(No. 9) Order 2019
(‘EO9/19’) was gazetted on 23 August 2019. EO9/19 provides for exemption from income tax for a period of up to 12 months for women returning to the workforce after a career break of at least 24 months.
The exemption under EO9/19 was announced at the Malaysian Budget 2018 on 27 October 2017. EO9/19 is effective from year of assessment 2018 until year of assessment 2020.
To encourage women who have taken a career break of at least 24 months, a woman who is an ‘approved individual’ will be granted exemption from payment of income tax for a period not exceeding 12 months.
To qualify for exemption under EO9/19, an applicant must submit an application to the Minister of Finance (‘Minister’) through Talent Corporation Malaysia Berhad on or after 1 January 2018 but not later than 31 December 2019.
To be an ‘approved individual’, an applicant must satisfy the following criteria –
- she must be a Malaysian citizen;
- she must be residing in Malaysia;
- she must have ceased employment[i] and has not derived any employment income for a continuous period of at least 24 months prior to or as at 27 October 2017;
- she must have been employed on a full time basis for at least three years prior to the cessation of employment referred to in paragraph (c) above;
- she must not be more than 58 years of age on the date of submission of her application;
- she must have signed a full time employment contract (‘relevant contract’) in Malaysia with a qualifying employer[ii] for a period of at least 24 months;
- she must have worked with the same qualifying employer for at least 12 consecutive months of the contract period under the relevant contract during the period between 27 October 2017 and 31 December 2020;
- her gross monthly income from the relevant contract must be at least RM5,000; and
- her application for exemption under EO9/19 must have been approved by the Minister.
An approved individual must comply with all the conditions imposed by the Minister in relation to the exemption.
The grant of tax exemption under EO9/19 does not exempt an approved individual from complying with the requirements to submit any return, statement of accounts or furnish any other information under the Income Tax Act 1967.
[i] The expression ‘ceased employment’ does not include any no pay leave, half pay leave or full pay leave.
[ii] A ‘qualifying employer’ does not include (a) a company which is directly or indirectly controlled by the approved individual; (b) a sole proprietorship; or (c) a relative of the approved individual who is a parent, parent-in-law, child, adopted child, stepchild, brother, sister, grandparent, grandchild or spouse.