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
Taxable Income
The following sources of income are considered taxable in Malaysia:
• Business or profession
• Employment
• Dividends
• Interests (except bank deposit interests)
• Discounts
• Rent collected
• Royalties
• Premiums
• Pensions
• Annuities
Tax Exemption
Tax exemptions are "a personal allowance or specific monetary exemption which may be claimed by an individual to reduce taxable income". Tax exemptions are items which are completely removed from your taxable income, unlike tax reliefs which are deductions upon your taxable income.
The following items are qualified for tax exemption:
• Leave passage
• Medical and dental benefit
• Retirement gratuity
• Gratuity paid out of public funds
• Gratuity paid to a contract officer
• Compensation for Loss of Employment
• Pensions
• Death gratuities
• Scholarships
• Income of an individual resident in Malaysia in respect of his appearances in cultural performances approved by the Minister
• Income Remitted from Outside Malaysia
• Fees or Honorarium for Expert Services
• Income Derived from Research Findings
While the following items are included under taxable income, they are tax exempted if they fall under certain criteria.
• Interests
• Dividends
• Royalties
Please refer to the Inland Revenue Board of Malaysia's page on tax exemption for further information regarding the items above.
Contact Us
If you have further queries, please contact Tannet
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Email: mytannet@gmail.com
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