FWA Income Tax Deduction

Overview

A work-life friendly workplace can be established by introducing and implementing Flexible Work Arrangements (FWA) that allow employees to vary their work arrangements to suit their individual needs.

The FWA incentives were announced by the Prime Minister under the Pelan Jana Semula Ekonomi Negara (PENJANA), also known as the National Economic Recovery Plan as an approach to cushion Malaysia’s economy recovery and to propel local businesses.

The PENJANA scheme focuses on 3 key thrusts: ‘Empower People’, ‘Propel Businesses’ and ‘Stimulate the Economy’.

This initiative - the Flexible Work Arrangements Tax Deduction - falls under the ‘Empower People’ umbrella, is intended to encourage the effective implementation of FWA, which can support both employers and employees.

To embrace the new normal, the Malaysian Government is supporting eligible employers with further tax deduction for implementing FWA, or undertaking enhancement of their existing FWA. This initiative, known as the Flexible Work Arrangements Income Tax Deduction is effective from 1 July 2020.

Eligibility

A company incorporated under the Companies Act 2016 [Act 777]
A limited liability partnership registered under the Limited Liability Partnerships Act 2012 [Act 743]
A partnership registered under the Partnership Act 1961 [Act 135]

Companies that are eligible for the Income Tax Deduction Cost of Implementation of Flexible Work Arrangements (FWA) may claim this tax deduction twice up to a maximum amount of RM500,000 for each year, up to three (3) consecutive years of assessment starting from the date of implementation approval obtained from TalentCorp. Applications is for expenses incurred within the period of 1 July 2020 to 31 December 2022.

How to Apply

Refer to the Guidelines and Frequently Asked Questions (FAQs) for the eligibility and criteria.
After reading the Guidelines and FAQs, please fill in the Application Form and the Declaration Form.
Submit the application, supporting documents and signed declaration form via email to flexworklife@talentcorp.com.my.
Once your application is successful, you will receive the Surat Pengesahan Pengaturan Kerja Fleksibel, for your e-filling with Lembaga Hasil Dalam Negeri Malaysia (LHDNM).

For more information, kindly refer to the Guidelines and its relevant forms below:

FWA Income Tax Deduction Guidelines

VERSI BAHASA MALAYSIA

ENGLISH VERSION

FWA Income Tax Deduction Application Form

VERSI BAHASA MALAYSIA

ENGLISH VERSION

FWA Income Tax Deduction Declaration Form

VERSI BAHASA MALAYSIA

ENGLISH VERSION

FWA Income Tax Deduction FAQ

VERSI BAHASA MALAYSIA