Pursuant to Public Ruling (PR) 9/2013 (issued by the Inland Revenue Board on June 27, 2013), Malaysian companies no longer will be able to claim a local tax deduction for reimbursement payments made for shares issued to employees in Malaysia in settlement of equity compensation awards where the awards are settled with newly-issued shares. Instead, a local tax deduction for reimbursement payments only will be available where the awards are settled with treasury shares.
Companies that have reimbursement arrangements in place with their local subsidiaries in Malaysia and want to ensure the availability of a local tax deduction should review their settlement procedures to ensure that awards granted to employees in Malaysia are settled with treasury shares.
For additional information about the new requirements for claiming equity compensation-related local tax deductions in Malaysia, please contact your GES attorney.
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RegisterIssuance of treasury shares required for local tax deduction in Malaysia
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Malaysia
October 3 2013
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