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Budget 2027 Malaysia Tax Guide

Budget 2027 (tabled 9 October 2026) proposes raising individual relief from RM9,000 to RM12,000 and cutting tax rates by one percentage point on chargeable income of RM70,001–RM150,000, from YA 2027. The return you file in 2027 (YA 2026) still uses RM9,000. Below: every proposed measure on rates, reliefs, SMEs, stamp duty and eldercare SST, from the MOF annex.

Budget 2027
Proposed

Status: proposed until gazetted

Every measure on this page is a Budget 2027 / Finance Bill-track proposal. Effective dates below are as stated in the MOF annex. Re-check after gazettal and HASiL forms are published.

Key highlights

Individual income tax ratesCurrent chargeable-income rates versus proposed Year of Assessment 2027.See details Individual and dependent relatives reliefAnnual cap rises from RM9,000 to RM12,000 (unchanged since 2010).See details SME (PMKS) company tax ratesEligible if paid-up ordinary share / LLP capital ≤ RM2.5m and annual sales ≤ RM50m.See details First-home stamp dutyExemption for SPAs executed 1 Jan 2027 – 31 Dec 2030.See details Service tax — eldercareRate 8% → 6%; fees ≤ RM96,000 per elder per year exempt at registered centres.See details

Individual tax rates

Changed bands are marked. Full current versus proposed YA 2027 schedule.

Individual income tax rates

Year of Assessment 2027

Current chargeable-income rates versus proposed Year of Assessment 2027.

Individual income tax rates
RMCurrentProposed YA 2027
RM0 – RM5,0000%0%
RM5,001 – RM20,0001%1%
RM20,001 – RM35,0003%3%
RM35,001 – RM50,0006%6%
RM50,001 – RM70,00011%11%
RM70,001 – RM100,00019%Changed: 18%
RM100,001 – RM150,00025%Changed: 24%
RM150,001 – RM400,00025%25%
RM400,001 – RM600,00026%26%
RM600,001 – RM1,000,00028%28%
RM1,000,001 – RM2,000,00028%Changed: 30%
Above RM2,000,00130%30%

Government estimate: about 5 million taxpayers; up to RM1,600 extra disposable income from rate cuts and reliefs.

Personal reliefs

Proposed personal relief changes for Year of Assessment 2027.

Individual and dependent relatives relief

Year of Assessment 2027

Annual cap rises from RM9,000 to RM12,000 (unchanged since 2010).

From
RM9,000
Proposed
RM12,000

Parents / grandparents care

Year of Assessment 2027

Cap stays RM8,000; scope widens to all care expenses, not only healthcare.

Same annual capRM8,000
  • Home, day-care, and residential care expanded to all care expenses
  • Medical practitioner confirmation no longer required for care claims
  • Need written certification from a caregiver (excluding self/spouse/child) or work-permit copy, plus receipts

Health Wellbeing

Year of Assessment 2027

Cap stays RM10,000; medical relief renamed with postpartum and breastfeeding sub-caps.

Same annual capRM10,000
  • Postpartum care at an eligible centre or individual
  • Breastfeeding equipment (self or spouse) folded into this relief
Postpartum careRM3,000
Breastfeeding equipmentRM1,000
  • Standalone breastfeeding equipment relief removed/merged

Education and skills training fees

Year of Assessment 2027

Cap stays RM7,000; education fees merge with lifestyle skill courses under one bucket.

Same annual capRM7,000
  • Self: recognised Certificate/Diploma/Bachelor/Master/PhD in any field at a recognised Malaysian institution or professional body
  • Lifestyle skill-course claims moved into this relief
TVET skills courses (self/spouse, Act 652)RM3,000
Non-job self-improvement or children STEM/arts/language/religion classesRM2,000

Lifestyle

Year of Assessment 2027

Cap stays RM2,500; scope adds AI subscriptions, pet adoption, and vet vaccination/neutering.

Same annual capRM2,500
  • AI software/app subscriptions (self/spouse/child)
  • Pet adoption from registered shelters
  • Registered vet vaccination and neutering

Sports lifestyle

Year of Assessment 2027

Cap stays RM1,000; sports shoes up to RM300 added.

Same annual capRM1,000
  • Sports shoes up to RM300
Sports shoesRM300

Domestic tourism

Year of Assessment 2027

RM1,000 relief extended for Year of Assessment 2027 (Visit Malaysia 2026 extended into 2027).

  • Annual cap remains RM1,000
  • Extended for YA 2027 in line with the Visit Malaysia extension

PERKESO / SOCSO contributions

Year of Assessment 2027

Existing RM350 scope expands; additional relief up to RM150 for certain voluntary sectors.

  • Existing RM350 scope expands to mandatory LINDUNG KENDIRI (passenger/goods/food transport + hawkers) under Act 789
  • Additional relief up to RM150 for voluntary LINDUNG 24 + 17 non-mandatory LINDUNG KENDIRI sectors

SMEs and capital allowance

SME company rates and small-value asset capital allowance thresholds.

SME (PMKS) company tax rates

Year of Assessment 2027

Eligible if paid-up ordinary share / LLP capital ≤ RM2.5m and annual sales ≤ RM50m.

SME (PMKS) company tax rates
RMCurrentProposed YA 2027
RM0 – RM150,00015%Changed: 14%
RM150,001 – RM600,00017%Changed: 16%
Above RM600,00124%24%

Speech estimate: up to RM6,000 extra for about 300,000 SMEs.

Small-value asset capital allowance

Year of Assessment 2027

Per-asset threshold RM2,000 → RM3,000; non-SME annual ceiling RM20,000 → RM30,000.

From
RM2,000
Proposed
RM3,000
  • Non-SME annual claim ceiling: RM20,000 → RM30,000
  • SMEs remain uncapped on aggregate small-value claims

Stamp duty

Selected stamp duty measures with calendar effective dates.

First-home stamp duty

1 Jan 2027 – 31 Dec 2030

Exemption for SPAs executed 1 Jan 2027 – 31 Dec 2030.

  • Price ≤ RM500,000
    100% exemption on loan agreement + instrument of transfer
  • Price ≤ RM750,000
    100% on first RM500,000 + 50% on remainder to RM750,000

Abandoned housing rescue

1 Jan 2027 – 31 Dec 2030

100% exemption for rescue contractor/developer and original buyer (KPKT-confirmed).

  • Period: 1 Jan 2027 – 31 Dec 2030

Bank savings/current account instruments

From 1 Jan 2027

100% exemption for account-opening instruments with separate legal obligations, from 1 Jan 2027.

FX loan / financing

From 1 Jan 2027

Stamp duty capped RM2,000 (≤ RM100m) / RM5,000 (> RM100m) from Malaysian banks.

  • Cap RM2,000 if value ≤ RM100m; RM5,000 if > RM100m

P2P lending (SMEs)

1 Jan 2027 – 31 Dec 2030

Remittance of stamp duty above RM10 (1 Jan 2027 – 31 Dec 2030).

Remittance aboveRM10

MTC supplier financing excess credit agreements

1 Jan 2027 – 31 Dec 2030

Remittance above RM10 for second-stage agreements (conditions apply).

Remittance aboveRM10

CAKNA stamp duty remittance

1 Jan 2027 – 31 Dec 2030

CAKNA II remittance above RM10 (2027–2030); CAKNA I extended to 2029–2030.

  • CAKNA II: remittance above RM10, 1 Jan 2027 – 31 Dec 2030
  • CAKNA I: extended to 1 Jan 2029 – 31 Dec 2030

Service tax

Service tax — eldercare

From 1 Jan 2027

Rate 8% → 6%; fees ≤ RM96,000 per elder per year exempt at registered centres.

From
8%
Proposed
6%
Exemption ceiling per elder / yearRM96,000
  • Moved to Group I; registration threshold stays RM500,000
  • Fees ≤ RM96,000 per elder per year: service-tax exempt for centres registered under the Care Centres Act 1993 or Private Aged Healthcare Facilities and Services Act 2018
  • Fees above RM96,000: 6% SST

YA 2027 versus calendar 2027

  • Most individual tax and relief measures apply from Year of Assessment 2027 (income year 2027, typically filed in 2028).
  • Filing in calendar 2027 for YA 2026 still uses YA 2026 rules unless separately stated.
  • Stamp duty and SST measures use calendar effective dates (often 1 Jan 2027).

Other annex items

Secondary annex items for the consumer page — not full measures. See the MOF PDF for full detail.

  • School public contribution fund (TSUWAS)

    Year of Assessment 2027

    Scope widened; applications via HASiL with MOE certification (YA 2027).

  • Shariah fund management tax exemption

    Revised to 40% for YA 2028–2030.

  • Salary deduction via cashless instruments only

    From YA 2028, salary deduction only if paid via financial institution / cashless instruments (SME exception).

  • Sukuk Prisma issuance costs

    Year of Assessment 2027

    Issuance cost deduction YA 2027–2030.

  • Other incentives (GSH, shipping, green tech, ECF, and more)

    Global Services Hub, shipping, green tech, ECF, angel investor, ACA ICT, international trade/event incentives — see MOF annex.

  • Import duty / free island / sales tax refund / FT entertainment duty

    Import duty, free island, sales tax refund, and Federal Territory entertainment duty measures in the annex.

Frequently asked questions

Not yet. These measures are proposed in the Budget 2027 / Finance Bill track until gazetted. Check the MOF annex and finance legislation for final effective dates.

Related guides

Guide
Tax Relief 2026
Year of Assessment 2026 relief guide still used for calendar-2027 filing
Guide
Income tax calculator
Estimate tax with current rates and reliefs
Guide
Tax guides hub
All Malaysian income tax guides
Guide
Tax deadlines
Key e-Filing and payment dates

Official sources

Budget 2027 · published 2026-10-09
MOF — Budget 2027 Tax Measures Annex
Official Budget 2027 tax measures annex
Budget 2027 · published 2026-10-09
MOF — Budget 2027 Speech (Malay)
Full Budget 2027 speech text (Malay)
Budget 2027 · published 2026-10-09
MOF — Budget 2027 Speech (English)
Full Budget 2027 speech text (English)
Budget 2027 · published 2026-10-09
PMO — Fifth Madani Budget 2027 Speech
Official Prime Minister speech page

Track your reliefs and receipts early

Organise receipts and relief categories early. Start for the current YA now — YA 2027 rules remain proposed until gazetted.

Start tracking reliefs

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