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Malaysia On January 1, 2025, Malaysia introduced a two per cent tax on annual dividend income exceeding 100,000 ringgit (around US$23,700). The move, part of Budget 2025, was a shift from the long-standing exemption under the single-tier tax system. The goal was to boost national revenue by increasing tax contributions from higher-income earners. The policy has been in effect for a few months, however, many investors and businesses are still adjusting their tax planning strategies. Under Malaysia’s single-tier system, companies pay corporate tax on profits and dividends but have typically been exempt from additional tax. The approach helped attract both domestic and foreign investment by avoiding double taxation. The new tax applies an extra charge to high dividend earners without dismantling the single-tier framework. The threshold applies per taxpayer per year, regardless of residency or entity type. It is based on total dividend income, not per source. For example, for someone earning 120,000 ringgit in dividends, only the 20,000 ringgit exceeding the threshold is taxed. Foreign-sourced dividends may be treated differently, particularly where tax treaties are in place. ASEAN Briefing breaks down the formula, its application, exemptions and compliance obligations.
India In April 2025, Andhra Pradesh signed a Memorandum of Understanding (MoU) with Google for an AI data centre in Visakhapatnam, and Madhya Pradesh launched India’s first purpose-built AI data centre, supported by policy reforms and infrastructure grants. Recent key developments in the nation’s AI Infrastructure include: Rapid growth in data centre investment Investments in India’s data centre sector have surpassed US$60 billion and are expected to reach over $100 billion by 2027, driven by AI, mobile, and cloud demand. Government support and green goals The government has approved over $1.2 billion to boost AI-ready infrastructure, with a strong focus on sustainability and renewable energy. Expansion beyond major cities Smaller cities like Jaipur and Kochi have gained new edge data centres, helping power real-time AI, Internet of Things (IoT), and 5G applications. Global tech interest Open FDI policies have attracted key players, including AWS and Microsoft, and India is expected to attract US$5 billion in data centre investment in 2025 alone. India’s current AI infrastructure momentum demonstrates that it is becoming a serious contender in the global digital economy. Dezan Shira & Associates’ India Briefing takes a deeper dive into the current outlook.
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ISSUE 12 GLOBAL PAYROLL MAGAZINE
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