Malaysia Hotline: +603- 2141 8908
Income tax in Malaysia
is imposed on income accruing in or derived from Malaysia except for income of
a resident company carrying on a business of air/sea transport, banking and
insurance, which is assessable on a world income scope.
Who is taxable?
All persons staying in
Malaysia for more than 182 days are considered as residents under Malaysian tax
law, regardless of nationality. All persons staying less than 182 are regarded
non-residents and are taxed on a different scale. Apart from that there is a
third group of persons who are exempt from taxation. This applies to those who
are employed in Malaysia for less than 60 days in a year, who are aged over 55
years and receive Malaysian pension or persons who are receiving interest from
banks.
Expatriates who are in
Malaysia under the “Malaysia My Second Home Programme” (MM2H) are not required
to pay tax on their pension or income remitted from abroad. Apart from this,
all income achieved in or derived to Malaysia is liable to tax.
Malaysia has an
Agreement for the Avoidance of Double Taxation for several countries. For
further details, you may go the website of the Malaysian Inland Revenue Board
Taxes in Malaysia
1) Corporate Income
Tax
A company, whether
resident or not, is assessable on income accrued in or derived from Malaysia.
The current corporate income tax rate (for assessment year 2008) is 26%. The
rate will be further reduced to 25% for assessment year 2009. A company
carrying on petroleum upstream operations is subject to a Petroleum Income Tax
of 38%. Currently, corporate tax is based on the imputation system. With effect
from assessment year 2008, the current imputation tax system will be replaced,
over a transition period of 6 year, with a single-tier tax system. Under the
single-tier system, profits are taxed only at the company’s level and dividends
received are exempted from tax.
2) Personal Income Tax
Whether an individual
is a “resident” in Malaysia under the Malaysian Income Tax Act 1967 is
determined by the duration of his stay in the country. Generally, an individual
residing in Malaysia for 182 days or more in a year has resident status. A
resident individual is taxed on his chargeable income at a graduated rate from
0% to 28% after deducting relevant tax relief. There are also available tax
rebates. A non-resident individual is liable to tax (on income earned in
Malaysia) at the rate of 28% without any personal relief.
3) Withholding Tax
Withholding tax is
imposed on certain payments made by residents to non-residents such as
interest, royalty, technical fees and rentals for moveable properties. The
resident has the obligation to withhold tax when making the payments and to pay
the amount within a certain time, failing which the resident is liable to pay a
penalty equal to 10% of the unpaid tax and the total sum shall be a debt due to
the Government. Due to double tax agreements, residents in some countries may
enjoy exemption or reduced withholding tax rates.
Contact us
If you have further queries, please contact Tannet
24 hours Malaysia hotline：603-21418908;
24 hours Hong Kong hotline：852-27837818;
24 hours Hong Kong hotline：86-755- 36990589;
Email: mytannet@gmail.com
TANNET GROUP : http://www.tannet-group.net, http://en.tannet.com.my