The Goverment has decided to abolish the tax incentive on the purchase of a new locally assembled vehicle or the import of a pre-owned private vehicle into Malaysia under MM2H Programme.
Therefore, this tax incentive will be terminated effective from 1 January 2018.
However, Ministry of Finance will give special consideration to MM2H participant with first MM2H’s Visa approved beginning 1 January 2017 until 31 December 2017 to submit complete application via Sistem Maklumat Pengurusan Cukai / Sistem Maklumat Pengurusan Cukai Kerajaan Malaysia not later than 31 December 2018.
TAX INCENTIVE ON THE PURCHASE OF A NEW LOCALLY ASSEMBLED VEHICLE OR THE IMPORT OF A PRE-OWNED PRIVATE VEHICLE INTO MALAYSIA UNDER MM2H PROGRAMME
An approved participant under the MM2H Programme, with first MM2H’s Visa approved from 1 January 2017 until 31 December 2017, is eligible for:
(i) Exemption of excise duty to purchase a new locally assembled vehicle (Completely Knocked-Down -CKD); OR
(ii) Exemption of import duty and excise duty to import a pre-owned private vehicle (Completely Built-Up – CBU) into Malaysia.
An approved MM2H participant is eligible to enjoy this incentive, limited to RM150,000, for purchasing a new locally assembled vehicle (CKD) OR for importing a pre-owned private vehicle (CBU). This incentive is subject to the following terms and conditions as below:
1) The total value of exemption for excise duty to purchase a new locally assembled vehicle (CKD) is limited to RM150,000 OR the total value of exemption for import duty and excise duty exemption is limited to RM150,000 for importing a pre-owned private vehicle (CBU).
2) The application to purchase a new locally assembled vehicle (CKD) OR to import a pre-owned private vehicle (CBU) shall be made not later than 31 December 2018. If a participant fails to apply for the duty exemption within the stipulated period, no further extension will be provided.
3) For the purchase of a new locally assembled vehicle (CKD):
i. the vehicle shall be obtained from the new stock of vehicles which have not been registered and duties have not been paid; and
ii. the chassis number and engine number needs to be submitted during application.
4) For importing a pre-owned private vehicle (CBU):
i. the vehicle shall be pre-owned for at least thirty-six (36) months by the MM2H applicant before the commencement of the MM2H visa; and
ii. the vehicle shall be imported from the country of origin or last domicile country of the MM2H applicant.
5) A MM2H participant who has obtained duty exemption approval for the vehicle shall submit the approval letter to the Royal Malaysian Customs Department to obtain the duty exemption and to the Road Transport Department for the registration of the vehicle.
6) The approved vehicle shall be directly used by the MM2H participant for personal use only, while in Malaysia.
7) Each MM2H participant is entitled to enjoy the duty exemption for only one unit of vehicle. The types of vehicles entitled under this incentive are saloon cars, MultiPurpose Vehicles (MPV), Sports Utility Vehicles (SUV) and Four-Wheel Drive (4WD) vehicles only.
8) Commercial vehicles such as lorries, vans, buses, limousines and other types of vehicles are not eligible for this tax incentive.
9) The approved MM2H participant shall reside and have a permanent address in Malaysia. A copy of the proof of purchase (Sales and Purchase Agreement); or rental residence (Tenancy Agreement); is required to be submitted for each application.
10) An MM2H participant is only allowed to sell/transfer ownership of the exempted vehicle after five (5) years from the date of registration of the vehicle with the consent of the Royal Malaysian Customs Department. The duties, based on the current evaluation determined by the Royal Malaysian Customs Department, need to be paid before the transfer of ownership takes place.
11) Any breach of the above conditions shall lead to the revocation of this incentive and the MM2H participant shall be required to refund to the Government of Malaysia, the amount of duties exempted for the said vehicle.
12) The application of participants will be rejected if they failed to comply with the said terms and conditions.
