Hanoi:The Ministry of Finance has proposed a review of tax incentives aimed at supporting Malaysian shipping companies. The initiative is intended to boost the growth of the local shipping fleet, reduce reliance on foreign vessels, and increase ship freight revenue into Malaysia over the long term.

According to BERNAMA News Agency, the proposal includes a full income tax exemption for Malaysian shipping companies, conditional on strategic management and effective control being implemented within Malaysia. Companies must also have an annual operating expenditure of at least RM250,000 per ship.

Additionally, the proposal mandates the employment of at least four Malaysian workers with an average monthly salary of RM15,000 for each ship to qualify for the tax incentive, as outlined in the Budget 2027 Tax Measures document.

The Ministry also discussed changes to stamp duty regulations, setting a maximum limit on duty imposed on loan or financing agreements for purchasing or constructing Malaysian ships. The maximum stamp duty would be RM2,000 for loans up to RM100 million and RM5,000 for loans exceeding RM100 million. A full stamp duty exemption will continue for instruments executed by a Labuan entity related to a Labuan business activity, as per the Stamp Duty (Exemption) (No. 3) Order 2012.

The proposed income tax exemption would apply from the assessment years 2027 to 2036, while the maximum stamp duty limits would take effect for agreements executed from January 1, 2027.