For the taxation on the gains from the stock scheme, my understanding is per following.
There are no specific provisions in the Income Tax Act 1967 to cater for the tax treatment of stock purchase. As the right to participate in the stock purchase accrues to the employee as a result of him / her exercising employment with an employer in Malaysia, any benefit arising there-from will be regarded as part of his / her employment income and therefore subject to Malaysian tax.
Where the shares are purchased at a discount, the taxable benefit is the difference between the market price of the shares on the purchase date and the purchase price (which is net of the discount) paid by the employee. Effectively, the discount is taxable on the employee at the date of purchase of the shares.
The taxable benefit arising from the stock purchase would be regarded as a benefit derived from the employment with the employer and therefore subject to tax. Such taxable benefit would need to be reported in the Statement of Remuneration from Employment (Form EA) of each employee for the relevant period concerned.
On the administrative side, the Technical Unit of the Malaysian Inland Revenue Board (MIRB) has to be furnished with a copy of the stock purchase plan for its review to ascertain the taxable benefit or to confirm how the taxable benefit should be computed. The notification should be made once the plan has been launched to the employees.
The notification is by way of the submission of the MIRBís prescribed form, i.e. Form BT/ESOS/2000. Other supporting documents, including the stock purchase plan, are required to be submitted to the Technical Unit of the MIRB within 30 days from the date of implementation of the plan.
Kindly confirm if it is still valid for such understanding, as one of our client state that the RSU should be taxed at 25% rather than bonus tax.