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Malaysia adopts a territorial principle of taxation, meaning only incomes which have a source in Malaysia are taxable there

Territorial principal expat tax

Expatriate tax

 Malaysia adopts a territorial principle of taxation, meaning only incomes which have a source in Malaysia are taxable there, regardless of where the expatriate is paid. 

It’s important to know that all tax residents and non-residents of Malaysia (this includes every person in the country regardless of nationality) will be taxed on all income earned within Malaysia if they are liable. Foreign income earned is not taxable.

Tax Residents

You are considered a resident for tax purposes if:

  • You reside in Malaysia for a period of more than 182 days in an assessment year (usually 1st Jan to 31st Dec)

  • You earn at least RM34,000 a year after EPF deductions.

Non-Resident

You are considered a non-resident for tax purposes if you stay in the country for a period of less than 182 days in a year. All expats must notify the Non-Resident branch of the Inland Revenue Board of Malaysia (IRBM) of your chargeability within two months of arriving in Malaysia.

You will not have to pay income tax if you are:

  • Employed in Malaysia for less than 60 days

  • Employed on board a Malaysian ship

  • Aged 55 years old and receiving pension from Malaysian employment

  • Receiving interest from banks

  • Receiving tax exempt dividends

Contact us to find out more. 

 

Meet the team who are experts in expatriate tax
CINDY YEW
THERESA LOW