MOF Proposes Global Services Hub Tax Incentive Review To Boost Competitiveness

KUALA LUMPUR, Oct 12 (Bernama) --The Ministry of Finance (MoF) has proposed revising the tax incentives for the Global Services Hub (GSH) to strengthen Malaysia’s competitiveness and attract treasury management activities.

The GSH incentive is available to companies that use Malaysia as a base for high-value services, including managing, controlling and supporting key business functions.

In the Budget 2027 tax measures document, MoF said the revision would cover new companies that had not previously conducted GSH or Principal Hub (PH) activities.

“It also covers existing companies that have previously been approved for GSH or PH tax incentives, as well as companies seeking an extension to undertake new additional services.

“The baseline income for existing companies will be based on their average income over the past three years,” said the ministry.

MoF said the tax rate on GSH income would be five per cent for new companies. For existing companies, a 15 per cent rate would apply to income up to or equal to the baseline, while income exceeding the baseline would be taxed at five per cent.

The incentive would be granted for five years at a time, for a maximum of 30 years, subject to the company’s performance and commitments during the preceding incentive period and its commitments for the subsequent period.

Eligible services include regional business management or profit-and-loss management, strategic business planning and corporate development.

“Companies are also required to undertake at least two additional service activities, including strategic services, business services such as treasury fund management (TFM), or shared services.

“Additional incentives are also available to GSH companies undertaking TFM activities, including withholding tax exemptions on interest paid to non-residents and a 100 per cent stamp duty exemption on loan agreements between companies denominated in foreign currencies,” said MoF.

-- BERNAMA