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Malaysian Tax Issues for Expatriates and Non-Residents

Are you looking for a job in Malaysia, considering an expat assignment in the country or already working here, but is still confused on the country’s tax structure?

Then this article will try to explain the various tax issues and help you understand it better.

1. What is Malaysian Tax Rate for Expatriate & Non-Residents?

The current tax structures for expatriates and non-residents are as follows:

  • If your stay in Malaysia is less than 60 days, then any income, fee, commissions or bonus received will not be taxed
  • If during your period of employment, your stay is not more than 182 days in a year, then you are a non-resident. As a non-resident, you will be taxed at a flat rate of 25% and you will not enjoy any tax incentives. UPDATE: LHDN had increased the tax to 28% with effect from Year Assessment 2016
  • If your stay is more than 182 days in a year, then you are a RESIDENT (see below for definition of a RESIDENT). A resident will be taxed at a graduated rate of 0% to 25% depending on your income. You will also enjoy the tax incentives that includes personal and family rebates, allowances, etc. that will reduce your net taxable income considerably
  • If you work on board a Malaysian ship, your income is not taxable

Definition of a Resident

You will fall under the category of RESIDENT if you meet one of the following criteria;

  • You are in Malaysia for at least 182 days during the calendar year
  • If your stay is less than 182 days for that calendar year (e.g. 20 days in 2015) but your stay continues in 2016 for another 182 days or more

What if I Have to Travel OUT of Malaysia within this 182-day period?

If you have to be physically away from Malaysia for the following reasons:

  • To attend meetings, seminars, exhibitions or conferences which are all related to your job
  • To seek medical treatment related to your health or your immediate family member
  • Social visit but not exceeding 14 days

then this brief absence shall be considered as part of your required 182-day.

2. How to Get Your Income Tax Number

Usually, your company will arrange this for you. If this is not the case, then go to the nearest Inland Revenue Board of Malaysia's office or known locally as Lembaga Hasil Dalam Negeri, to register and get your income tax number. You need to bring your passport with you.

Please do this within two months of your arrival into the country.

3. When to File Your Tax Return

The last day to submit your Malaysian tax return is 30th April each year. But do not wait until this very last day as the Inland Revenue Board of Malaysia's (IRBM) office will be packed with last minute submission and you are bound to be stuck there for hours.

This also applies if you file online.

Filing of Malaysian tax return can either be online (e-Filing) or manual filing.

If you prefer manual filing, then go to the nearest IRBM office and get the following form that applies to you:

  • Form B, for individual who carries on business in Malaysia. In most cases this may not be applicable to you if you are employed by a company OR
  • Form BT for individual who is classified as a knowledge worker or expert worker and approved by the Minister OR
  • Form BE for individual who does not carry on business and is employed by a company
  • Form M if you are a non-resident

Fill in the form and submit before 30th April for each year.

For e-Filing, you must first be registered as an online user. To register, you can email them at pin@hasil.gov.my and attach a scanned copy of your passport. Alternatively, you can go to the nearest IRBM's office to register. This is a one-time process and you do not need to register again for your next assessment year. Just do not lose your username and password.

Supporting Documents

For both manual and e-filing, you do not need to submit your supporting documents. However, you must keep it for at least seven years as within this period IRBM has the right to check and audit your submission.

Before you can fill in the manual or e-file form, you need information from your company on the total remuneration paid to you during that assessment year. This EA form is issued by the end of February each year and you will use the information as given out in that form, when filing your tax return.

If you loves the outdoor, you will love Malaysia
If you loves the outdoor, you will love Malaysia | Source

4. Documents to Keep for Record Keeping

The followings are supporting documents that you must keep for at least seven years (from the end of the assessment year) for any possible audit by IRBM:

  • Your EA Form
  • Original receipts for books purchased, medical bills, donations that you had made to approved bodies or funds*, insurance premiums, zakat receipts (for Muslims), and dividend vouchers
  • Your marriage certificate and your children's birth certificates
  • Any other supporting documents such as your letter of appointment from the company that employed you

* as approved by the Director General of IRBM.

Malaysian Tax Guide

Malaysia tax year is the calendar year.

Tax in Malaysia is based on the self-assessment regime. Your income is deducted by your employer under the pay-as-you-earn scheme, and then remitted to IRBM on a monthly basis.

5. Is There a Penalty for Late Submission?

A penalty is levied for any delay in submitting your Malaysian tax return forms.

As mentioned earlier, all submissions must be on or before 30th April for each year.

6. How Do I Calculate My Tax if I Worked for only 1.5 years

Income received during your first 182 days will be taxed based on a non-resident flat rate of 25%. From 183rd day onward, the tax rate will vary. It will be based on the tax table as provided below.

Since your contract is more than a year, you will be filing your tax return twice, e.g. assessment year 2014 and 2015. Your assessment year 2015 will be calculated based on the resident tax rate and the non-resident flat rate of 25% will no longer be applicable.

Resident Individuals Income Tax Rate

Chargeable Income
Tax Rate for 2013 and 2014
Reduced Tax Rate for 2015 onwards
From RM1 to RM5,000
0%
0%
From RM5,001- RM20,000
2%
1%
From RM20,001- RM35,000
6%
5%
From RM35,001- RM50,000
11%
10%
From RM50,001- RM70,000
19%
16%
From RM70,001- RM100,000
24%
21%
From RM100,001- RM250,000
26%
24%
From RM250,001- RM400,000
26%
24.5%
From RM400,001 and above
26%
25%
Exchange rate RM3.2 = US$1

7. Can I Get Any Tax Reliefs for My Family?

If you have family staying with you in Malaysia and you are considered a resident, i.e. stayed more than 182 days in a year, then you will be entitled to several tax exemptions. Please refer to IRBM Explanatory Notes for this list of tax exemptions.

8. Can I Get Tax Rebates at the End of My Contract?

Unfortunately, there are no special tax rebates at the end of your contract period.

Any tax incentives and rebates are already provided for (follow the link provided above to see these rebates) and are the same as when you do your yearly tax return.

Before leaving Malaysia at the end of your contract, don't forget to get your tax clearance from Income-Tax Office, LHDN.

9. Will I be Subject to Withholding Tax?

Non-residents will be subject to withholding tax only on the following types of income derived in Malaysia.

Type of Income
Rate
Use of movable property
10%
Technical services, assistance or advice
10%
Fees charged for installation of machinery, plant & other similar assets
10%
Personal services for use of intangible property
10%
Royalties on the use of intangible property
10%
Interest
15%

10. Is the Reduced 15% Tax Rate Applicable to me as a Foreigner if I Work in ISDR?

Both Malaysian and foreign national that are categorized as “knowledge worker” will enjoy the reduced tax rate of 15% if you resides and work in the Iskandar Development Region.

Definition of “knowledge worker” is working in certain qualifying activity with a designated company. Your employment must start on or after October 24, 2009, but before December 31, 2015.

You must not receive any Malaysian employment income for at least three years prior to the date of this reduced tax application.

Property in Malaysia is still the cheapest in the region
Property in Malaysia is still the cheapest in the region | Source

11. Will I be Subject to Capital Gains Tax?

The answer is no.

However, if you bought and sold real property in Malaysia, any gains received from this disposal is subject to real property gains tax or RPGT.

Any disposal made within the first three years, is subject to 30% RPGT. For sales made in third, fourth and fifth year will be charged at 30%, 20% and 15% rate respectively.

No RPGT for any disposals made after the fifth year.

An update on purchase of Malaysian properties by foreigners; the current minimum price of RM500,000 will be increased to RM1m. However, at the time of this writing, this new ruling is not enforced yet as it has yet to be gazetted.

Malaysian Tax Rate is One of the Lowest in the Region

The current maximum tax rate of 26% for personal income is the second lowest in the region. This rate will be reduced further to 25% from assessment year 2015 onward.

For an expatriate who had gained resident status, they will enjoy tax rebates and other incentives. Their effective tax rate can hence, go down to 21%.

12. If I Work for Foreign Companies in Malaysia whose Office is Classified as Operational Headquarters, how will I be Taxed?

You will be taxed only on your chargeable income earned during your stay in Malaysia.

13. What is the Tax Rate for Foreign Public Entertainer?

Currently it is a flat rate of 15%, provided your stay is less than 182 days.

Non-Dutiable Goods in Malaysia

You can buy the following items at duty free prices in Malaysia

  • fountain pens
  • books
  • perfume and cosmetics
  • portable radios
  • watches
  • cameras and video cameras
  • calculators and computers
  • fishing equipment
  • golf clubs, tennis and badminton racquets
  • medical equipment
  • manicure preparation items
  • leather goods (handbag, luggage, shoes, etc.)

14. How Do I Claim for Refund of Excess Tax Payment Made through the Monthly Tax Deductions?

You do not have to apply or request for refund as IRBM will process this within 30 working days for e-filing submissions and within 90 days if submissions was posted or hand delivered.

If you do not receive it within this stipulated time frame, there is a possibility that IRBM may want to audit your tax return.

If this is the case, you should have received a letter from them on this matter.

If you have not heard from them, then you should visit the nearest IRBM office for information relating to your tax return.

One of the perks of working and staying in Malaysia is the choice of duty free items such as cameras
One of the perks of working and staying in Malaysia is the choice of duty free items such as cameras | Source

15. What if I Submit My Tax Return After the Due Date and There's a Refund to be Made by IRBM?

Any late submission of your Malaysian tax return will be fined and once you pay this penalty, any excess tax payment will then be processed for reimbursement.

16. How Do I Know That IRBM had Made the Refund of Excess Tax Payment?

IRBM will credit directly to your bank account that you had registered with them. Unfortunately, there is no notification from IRBM when this transfer happened.

You have to check your bank statement for any 'additional' credits to your bank account, which can be daunting to some people! That is the only way to check otherwise you can call IRBM on when they credited your account.

English is widely spoken by most Malaysians and this is one of the many reasons, why expatriates love to stay in Malaysia
English is widely spoken by most Malaysians and this is one of the many reasons, why expatriates love to stay in Malaysia | Source

Malaysia Tax Guide for Expatriate

Malaysia's personal tax rate may not be the best.

The current personal tax rate bands are still in need of fine tweaking, so that taxpayers do not reach the maximum income tax rate too quickly,

For Malaysia to stay competitive, it needs to lower the current direct tax rates. The government had earlier announced the reduction to 25% from the current 26% for personal income tax, for assessment year 2015 onward.

Although this is a good move, it is still high compared to neighboring country such as Singapore. I hope that when the country implements the GST, the personal tax rate will be reduced further.

Malaysia is Still a Competitive Country to Work & Live

Despite all these, Malaysia remains an attractive country to work and stay. The slightly higher tax rate is offset by the relatively lower cost of living compared to Singapore.

Hence, effectively you get to spend less and have more.

I hope this article helps clear some of the issues and questions that you, as an expat or would-be expat may have on our country's personal income tax structures. If you need more information on other tax matters or for location and address of IRBM nearest branch office, you can visit the Inland Revenue Board of Malaysia website.

While you are here, don't forget to go out and enjoy your stay here in Malaysia.

© 2014 Mazlan

More by this Author


171 comments

greatstuff profile image

greatstuff 6 hours ago from Malaysia Author

Rinie, you posted this same question on my other article on Tax Clearance. I have already replied, pls check at:

https://toughnickel.com/personal-finance/Guide-on-...


Rinie 7 hours ago

Hi Mazlan (Greatstuff),

Thanks for your article, it's very useful!

My contract was ended on last November 2016 and not extended, but I have left the country due to an important health recovery.

Then I got an email from HR just recently saying that I need to do the tax clearance before they could release the last salary. They attached the filled CP21 form (but not signed yet), EA And PCB.

Please your further assistant as I'm in hometown already and not possible for me to go to LHDN for the tax clearance.

My work permit is still valid however until next year and have not cancelled it.

Thanks,

Rinie


greatstuff profile image

greatstuff 7 hours ago from Malaysia Author

PJ,

Resident status is calculated on the basis of the individual being residing in Malaysia for less than 182 days of the tax year but was resident in the country for a total of 182 consecutive days linked to days from the year immediately preceding or following that tax year.

So whether 31st Dec or 1st Jan doesn't matter, provided you did not leave for more than 14 days in that calendar year.


greatstuff profile image

greatstuff 7 hours ago from Malaysia Author

james0711, as long as you have a total of 182 consecutive days linked to days from the year immediately preceding or following that tax year, you will still be considered a resident, provided you do not leave the country for more than 14days in the calendar year (see exceptions, as listed in the article).


greatstuff profile image

greatstuff 8 hours ago from Malaysia Author

Dare2risk.

Pls read my article on tax clearance before leaving the country and get your last month salary paid to you by your company, here https://toughnickel.com/personal-finance/Guide-on-...

Your tax refund, if any, is not connected to your 1-year employment contract.


greatstuff profile image

greatstuff 8 hours ago from Malaysia Author

Varghese, the clock reset to zero once your 14-days out of the country is triggered. What your new company told you is correct.


greatstuff profile image

greatstuff 8 hours ago from Malaysia Author

Divyu Hira Nandani , the tax is calculated for each calendar year. So no refund.


greatstuff profile image

greatstuff 8 hours ago from Malaysia Author

Ricky, you need to file your tax return for every calendar year. So income received in 2016 will be submitted by April 2017.

For 2017 income, it will be at resident status as you will exceed the 182days requirement. Your tax submission must be submitted before you leave the country (since you are on 1-year contract). See my other article on Tax Clearance on how and when to submit for TC and get your last month salary, here: https://toughnickel.com/personal-finance/Guide-on-...


greatstuff profile image

greatstuff 8 hours ago from Malaysia Author

Hi, Ng.

Answer to your Q1: Since your employment starts mid-Nov 2016 and continues into 2017, you will be taxed.

Q2: Any income received including your sign on bonus is taxable.


greatstuff profile image

greatstuff 8 hours ago from Malaysia Author

Divyu, your taxable income is for every calendar year.

So for 2016 you are considered a non-resident and will be taxed at 28%.

For 2017 income, if your stay is 182 days continuously and satisfy all other conditions, then your tax will be under Resident category.

There is no rebate on the 28% tax paid in 2016 just because in 2017 you are eligible to be a Resident.


greatstuff profile image

greatstuff 9 hours ago from Malaysia Author

Anna, see LHDN that handles your file and get them to issue a notice to your company to adjust your monthly tax deduction accordingly.


PJ 5 days ago

Dear Mazlan, Can you shed any light on the significance of being back in the country Dec 31st as opposed to Jan 1st for new expats who are yet to receive resident status for tax purposes?


james0711 profile image

james0711 5 days ago

Hi, as per my employment i will get 1 year visa and it will be renewed every year as per my employer communicated. I have a question - on completion of 1 year when my visa will be renewed does i will get resident status or i have to wait agian 180 days to get it.


Dare2risk 6 days ago

Hi greatstuff,

Its really great stuff for us.

I am getting job in cyberjaya for 5500 myr per month. I understand i will be taxed at 28% for 6 months. I will join in jan 2017.

After 6 months when i will be resident, suppose i leave malaysia permanently in oct 2017, can i file my tax refund online from india ?

Also, is it a mandatory condition to complete 1 year of employment to get my tax refund ?


Varghese Cherian 9 days ago

I had a query regarding the resident/non resident status calculation .I was employed on a contract basis from September 13 2015 till September 14 2016. During this period i have been to india only for one week.After the contract ended i came back to india and found another job in Malaysia after two months.Now the new company says i will be considered as a non resident since i stayed outside Malaysia for more than 14 days.Is this valid considering the fact that i was present more than 182 days for the year 2016.


Divyu Hira Nandani 10 days ago

Hey greatstuff ! Great Article

Have a small query:As far as i understood your article if a person has joined an MNC in Nov and he gets paid for Nov & Dec and accordingly tax has been deducted at source @ 28% and he continues to stay for more than a year then weather for this calendar year 2016 in which he is considered as a non resident and paid excess tax, weather can this be adjusted in the subsequent year and excess tax can be refunded??


Ricky 11 days ago

Hi, greatstuff, my contract is 1 year, and i will be starting work in Dec 25, so in the year 2017, will all my tax be taxed 28% or after 182 days, i will be taxed base on the resident rate table? Because i will only submit 1 tax return if i don't recontract again. Thank you.


J Ng 11 days ago

Hi Greatstuff,

Please help me clarify 2 questions below:

1. I arrived in KL on 12nd Nov 2016, and my EP will be valid from mid of Dec 2016. Therefor, in 2016, my stay in Malaysia is less than 60 days, so will my salary of Dec 2016 be taxed? (Note: I will continuously stay in KL in 2017)

2. Company gives me a sign on bonus to cover my initial expenses. Will that amount be taxed?

I am looking forward to hear from you soon.

Thank you much,

J Ng


Divyu 12 days ago

Nice article but have a query

If a person joins employment on 1st of Novmber 2016 and for the calendar year 2016 he is a non resident as he has stayed only for 61 days and for the next year 2017 in which he has served more than 182 days becomes a resident:Weather he would be eligible for the excess tax amount deducted on account of NRI status for 2016 ???


Anna 12 days ago

when will be my tax rate lowered? i started working june5 2016 but up to date my tax rate is still 28%..?


greatstuff profile image

greatstuff 2 weeks ago from Malaysia Author

Hi, Chong Hai Yong.

Withholding tax for remuneration has always been imposed through pay-as-you-earn scheme and the %age will be determined by LHDN who will advise the employer on the monthly deduction quantum. This is determined by your salary and other liabilities/perks that you have.


greatstuff profile image

greatstuff 2 weeks ago from Malaysia Author

Hi, april. I am not sure if I understood your question correctly. Anyway, my response as follows: since your contract ended in jan 2016 (or do you mean 2017?), your trip to Bali in June makes no difference to your tax.

But if you meant Jan 2017, then you have to file both your 2016 tax return before April 2017 and your Jan 2017 income on the 2017 tax return to be submitted before April 2018. If your trip to Bali is less than 14 days, you will still enjoy Resident status.


Chong Hai Yong 2 weeks ago

Is it true that wef 01/01/17, payment of remuneration or labour cost is subjected to 15% withholding tax when remittance is made to foreign contractors for work carried out abroad by any local company ? To make it clear, a local company has a contract to be carried out abroad but materials and labour are supplied by that foreigners too.


april 2 weeks ago

i am working here for atleast 3 years, last june 23-25 i go Bali indonesia, and my contract will end this january 2016, does that means i will be taxed also?


greatstuff profile image

greatstuff 2 weeks ago from Malaysia Author

DN, you can try this website on the Malaysian Employment Act 1955

http://www.ilo.org/dyn/natlex/docs/WEBTEXT/48055/6...

or this website

http://www.mylabourlaw.net/

I am not too sure on the regulation with regards to language allowance, sorry I can't help you on this matter.


DN 2 weeks ago

Hi greatstuff, thanks for your article. Do you know where I can find information about regulations related to basic salary and language allowance for expatriate? I would like to know whether there is a specific rule about those from the government.


KM 2 weeks ago

thanks for the input. let me check on the basics with HR and comment if need more to you greatstuff.

thanks a lot.


greatstuff profile image

greatstuff 2 weeks ago from Malaysia Author

Fra, as mentioned in my article if your stay is not more than 182 days in a year, then you are a non-resident and will be taxed at a flat rate of 28% of your salary. If your monthly salary is RM5,000 then 28% of 5,000 goes to tax.

(LHDN had imposed an increased tax of 28% With Effect From Year Assessment 2016)


greatstuff profile image

greatstuff 2 weeks ago from Malaysia Author

KM, You net take home pay is dependent on many factors, not just taxes. For budgetary purposes just assume 25% of your salary goes to tax. Of course, this %age will reduce drastically once you are under the RESIDENT status.

So depending on your lifestyle, your choice of accommodation and other creature comforts, your balance of salary, if you know how to budget should be sufficient for you to save and send back home.

Malaysia is probably the best country for air travel as we have lots of budget airlines that flies to India. If you plan and buy ahead you get a very good bargain and at your salary, you can afford it.

My advice is to be savvy and since you are single, share accommodation with others.

You can read my article on the Cost of Living in KL here.

http://hubpages.com/travel/Cost-of-Living-in-Kuala...


Fra 2 weeks ago

Hi I'm an IT support guy.

I only work here in KL started 27th June 2016 and will end on the 2nd Dec. It means i am not resident.

How do I make computation with the 26%?


KM 2 weeks ago

Hi ,

i have been offered to malaysia with 5500 myr as basic. i'm single, but having old parents as dependents. and if i ok i may be moved to KL , PJ malaysia next jan or feb.

here my questions..

* what would be by take home salary if 5500 is a basic..!?

* is 5500 per month is enough to stay and save and send money to India ? (currently getting 55,000 INR and able to save give home 25000 post tax and expenses.

* how would be my take home salary after tax amount can happen for a month.

* i could be travel back to india to visit twice or thrice .. will this can be managed with above salary pack..!?

* but believe i could stay 182 days in a year.. what would be approx month tax i can expect..

it will be useful to accept or decline an offer if above questions answered.


greatstuff profile image

greatstuff 3 weeks ago from Malaysia Author

Shree, then go to tax dept, explain your predicament and if they agree, you will be issued with the tax refund


Shree 3 weeks ago

thanks for your reply. Yes I discussed with Employer, but unfortunately HR was not helping much and she asked me to check with Tax department directly. I'm stucked now.


greatstuff profile image

greatstuff 3 weeks ago from Malaysia Author

Shree, I am not sure why you were listed as Non-Resident. It is best that you bring all the relevant documents and discuss with your employer (who may not be familiar with tax for expart) as well as with LHDN (tax office)


greatstuff profile image

greatstuff 3 weeks ago from Malaysia Author

james0711, it is rm1,700 total for the 6 months income. It is only a rough estimate.

RM7.5k is good. For guideline on cost of living in KL, read my article

http://hubpages.com/travel/Cost-of-Living-in-Kuala...


Shree 3 weeks ago

Hello GreatStuff, This information is very useful, however I have one query.

I just completed my contract in Malaysia and I met my RESIDENT category (stayed more than 182 days as well as less than 14 days I was out from country and this was confirmed with IRB officer as well while submitting my tax returns last week). But I received my tax statement from EMPLOYER (of-course they received from government) with NON RESIDENT which is expected to pay more tax. could you please advise how to solve this?


james0711 profile image

james0711 3 weeks ago

Hi Thanks for the reply and valuable Info. I am single. Will be living in KL. So after 183 days ..(after 6 months). will i be taxed 1700 per month or 1700 in total for 6 months. Just a question is 7.5K per month (with tax deductions )salary is enough to survive in KL?


greatstuff profile image

greatstuff 3 weeks ago from Malaysia Author

James0711 7. yes, income received during your first 182 days will be taxed based on a non-resident flat rate of 25%. From 183rd day onward, the tax rate will vary and will be based on the tax table as provided in the article above. Your example of 15% for the next six months is incorrect as it is on a graduated scale. As a resident, you will also enjoy some tax deduction allowances.

Assuming you are still single ( a married person will get wife and children tax deduction allowances), after your personal, insurance and pension fund deduction, your tax to be paid for the 6-month as a resident is only RM1,700. You can get more deductions if you add on your expenses on books, sports equipment etc.


james0711 profile image

james0711 3 weeks ago

Hi I have to join on jan 2017 onwards in IT as developer. Correct me if i am wrong about my tax deductions ... as of from jan to june i have to pay 25 % tax and after that 15% as i will be resident after that. my monthly salary is 10k .so total of tax will be : 2500 * 6 + 1500 * 6 = 24000 per year.


greatstuff profile image

greatstuff 3 weeks ago from Malaysia Author

G,

If you are away on official business related to your company, then your 182-day is still running from your 1st Jan date.


3 weeks ago

Hi,

Thank you for your reply greatstuff. If let say say I was away from Malaysia for something related to work (meeting) on 15-19 jan. And I got my work permit on 1st Jan. That day on 15-19 jan will be counted as I am in Malaysia (19 days) or the counter will start to count again on 20th (16 days on 20th jan)?


greatstuff profile image

greatstuff 3 weeks ago from Malaysia Author

G,

The 182 days must be continuously for the calendar year i.e. from Jan 1st to Dec 31st. If you leave the country for more than 14 days (see exceptions in the article) during this 182 day period, your counter resets to zero.

In your example, you had quoted 5 days every month. On your third month you had exceeded the ‘14 day out of the country’ ruling, so your 182 day will restart after you re-enter the country.

If these 5 days are under company’s business, seminars, social visits etc. (as per my explanations in the article) then your 182 days is not disrupted.

Hope this answers your query.


3 weeks ago

Hi,

I get confuse about this 182 days in a year. Are this 182 days continuously, or 182 days in total for a year? Would you mind to explain me more?

For example, we have 365 days in a year. Let say I always go out of Malaysia for 5 days every month (from jan - dec). As per the calculation, I stay in malaysia dor 305 days ( 365 - (5x12)). Will they consider me as resident or non resident?


3 weeks ago

Hi,

I get confuse about this 182 days in a year. Are this 182 days continuously, or 182 days in total for a year? Would you mind to explain me more?

For example, we have 365 days in a year. Let say I always go out of Malaysia for 5 days every month (from jan - dec). As per the calculation, I stay in malaysia dor 305 days ( 365 - (5x12)). Will they consider me as resident or non resident?


greatstuff profile image

greatstuff 3 weeks ago from Malaysia Author

Chandru, it is income for the taxable year.


Chandru 3 weeks ago

Hi greatstuff, the chargeable income you mentioned in your article for per annum or month? can you please clarify

Thanks in Advance


greatstuff profile image

greatstuff 3 weeks ago from Malaysia Author

Hi chithu, it starts from the date of your work permit


chithu 3 weeks ago

I was in professional pass for last one year(not salaried), then i changed to employment pass to another employer. my employment pass starts this month, still that 182 days and normal resident tax is considerable? or it will be flat 28%???

Thanks in Advance...


greatstuff profile image

greatstuff 4 weeks ago from Malaysia Author

Hi, Rizwan

I have a question,

I started working in Malaysia by Oct 2016. My tax deduction has been started as non-resident. Here are my two questions:

1. Your question on Social visit for around 21 days: Pls see my reply to similar question below.

2. I am not clear on your 2nd question. All tax return for the year have to be submitted by end April. So if there are any overpayment in your tax, you will get the refund the following month.


Rizwan 4 weeks ago

I have a question,

I started working in Malaysia by Oct 2016. My tax deduction has been started as non-resident. Here are my two questions:

1. If i move out of Malaysia on a Social visit for around 21 days and come back. What effect would it have?

2. My 182 days will be completed in April 2017, would I be able to claim tax returns in April 2017 (adjustment in the tax)?


greatstuff profile image

greatstuff 4 weeks ago from Malaysia Author

Harris, if your social visit does not exceed 14 days, then your 182-day calculation still continues.

But in your case, you will be away for 24 days.

So this interruption in the calculation means that you will be tax as a non-resident IF the timing is almost close to April, i.e. the submission month for income tax. If there are still time and the 182 days are still possible, then I guess you will be tax as a resident.


Harris 4 weeks ago

Hi greatstuff,

Excellent article. If you can please clarify one thing. I Have to Travel OUT of Malaysia within this 182-day period and my social visit will be for 24 days. In that situation can you tell me how the tax structure will be applicable to me? Thanks


greatstuff profile image

greatstuff 4 weeks ago from Malaysia Author

Joe, for stay less than 60 days, then any income, fee, commissions or bonus received will not be .


Joe 4 weeks ago

Hi greatstuff,

I'm Thai engineer and occasionally will go to Malaysia for installation/technical services of large scaled display systems like in control rooms, etc, normally it will takes less than 1 month time and my fees charge will paid by Malaysia company. Can you advice how many percent will be tax deducted.

Thank you.


greatstuff profile image

greatstuff 5 weeks ago from Malaysia Author

FT, any source of income is taxable and the rate is based on the total nett income for the taxable year.

Are you seconded by a Malaysian company to work in Dubai? If so, then you may want to read LHD's guideline on Taxation of Malaysian Seconded Overseas. here is the link to download the pdf file:

http://www.ctim.org.my/download.asp?cat=14&file=DE...


Hi Greatstuff, 5 weeks ago

I am Malaysian. I work in Dubai. Every year I go to Malaysia for holidays for less than 60 days.

I have residential rental income in Malaysia. The property is owned by my wife and myself equally. Do I need to pay tax in Malaysia? If yes, what is the rate?

Thanks.

Regards,

FT


greatstuff profile image

greatstuff 6 weeks ago from Malaysia Author

Menaga, are you a student here in Malaysia? With a student visa, you are not allowed to work.

Assuming you are here under working visa and had worked since June 2014, you are considered a resident. You tax deduction will be as per table for 'Resident Individuals Income Tax Rate'

I cannot determine if your monthly deduction is correct without sufficient info such as monthly salary etc.


Menaga 6 weeks ago

Hi Sir,

I'm just a student and learning about expatriate tax deduction. I still blur with the calculation. I a expatriate joined on June 2014 how much monthly deduction will be? Which table rate I need to follow?

I got RM 111.43 monthly deduction. Is this right amount? Thank You.


greatstuff profile image

greatstuff 7 weeks ago from Malaysia Author

ajeeshys, as long as the work visa is still valid, your wife can continue work after your holiday. Tax rate as per table in the article


ajeeshys 7 weeks ago

yes,definitely this calendar year she is not gonna become resident(since we are taking 15days off).

Is it ok if she stays 182 from january(to become a resident and claim the 26% tax amount) ?


greatstuff profile image

greatstuff 7 weeks ago from Malaysia Author

Hi, ajeeshys.

If I understood your question correctly, for visiting your home country, pls see my explanation under 'What if I Have to Travel OUT of Malaysia within this 182-day period?' - your social visit should not exceed 14days.

On your wife's working tax status: I believe your wife now has a working visa? The calculation will start from the date of working visa was issued.


ajeeshys 7 weeks ago

hi, my wife is working here(malaysia) for 5 months now.we need to go back to our country for 15 days.before starting her job,she was in her dependent visa for more than 6 months.so she became a resident? or her 26% 182 non resident tax claimable?


greatstuff profile image

greatstuff 2 months ago from Malaysia Author

Srinivas, your 2016 tax return (for your 5 months ) must be filed before end April 2017.

And your social visit to India in early 2017 will not affect your status (more info on this in my article).

Hope this answereded your queries and have a good holiday back home.


greatstuff profile image

greatstuff 2 months ago from Malaysia Author

Hi Bala.

Yes, your tax for year of assessment 2016 is 28%, which you need to file in before end April 2017. As per my article, your 18days social visit will not affect your status.


Srinivas 2 months ago

Hi, I came to KL on 11/08/2016 on employment pass for 2 years.

1. What is my doubt is for this calender year I am non-resident and they will charge flat 28%, and I am going to continue stay next year also, So once my status changed to resident, is there any tax returns for the five months in 2016 year.

2. And looking for another information also within this 182 days if I go morethan 14 days out of malaysia for my social visit in January 2017, they will start my 182 days count next year once I will come back again...?

Waiting for your reply, Thanks in advance.


Bala 2 months ago

Hi, I came to Malaysia on 31/07/2016 on employment pass for 2 years, So as per the site information I got the point like I will be non-resident for this calender year and I have to pay 28% tax for these five months,while tax filing in the next year right? My doubt is in the next year Janury I am planning to visit India for 18 days social trip, is it will effect my non-resident to resident status and in that case how much tax I have to pay and is there any tax returns for the five months(01/08/2016 to 31/12/2016).


greatstuff profile image

greatstuff 2 months ago from Malaysia Author

Mehwish, sorry for the late reply. Pls see my answer to your earlier question. Thanks for dropping by.


greatstuff profile image

greatstuff 2 months ago from Malaysia Author

Mehwish, I suggest you go to the nearest LHD office and explain your situation. They will also tell you if there are any penalty or otherwise, to be paid.


Mehwish 3 months ago

Hi Great stuff,can u plz answer me some of the questions.i will b really grateful.i got my employment visa in Jan 2015 then I start working on Rm 5000.but I did not get registered and also not file the tax return for the year 2015.but now I want to get register and also want to settle my tax dues for 2015. Can u plz tell me now how can I do this and how much they will charge the penalty for not filling my tax return and not paying my tax dues.even I did not get registered at tax office.plz reply me.i will be very thankful to u.


Mehwish 3 months ago

Hi I just want to ask tha I joined as an expatriate in January 2015.but I did not registered as a tax payer for last year.now i want to b registered and want to fill my tax return.can u plz tell me how much they will charge penalty for not registration and not filling the tax return.


greatstuff profile image

greatstuff 3 months ago from Malaysia Author

Hi, CobraKai. That applies only if you are working in Malaysia. You have to enter Malaysia under the usual visit visa. I am assuming that the property will be purchased under your Malaysian wife's name.

But as a foreigner, you can buy under Malaysia My Second Home (MM2H) programme and you get a 10-year visa. No hassle to commute every day from Malaysia to Singapore. Some of the requirements for this program are:

Foreigners below 50 year-old must have a minimum of RM500,000 in Savings or Current Account or Fixed Deposit. If you are above 50 year-old then you only need at least RM350,000 in similar accounts.


CobraKai 3 months ago

I am working in Singapore as an expat (non-Singaporean or Malaysian), but married to a Malaysian. I am thinking of buying a house in Malaysia and commuting to Singapore (lower cost of living etc). In this case if I spend more than 182 days (weekends, public holidays, other leave & business trips) would I be counted as a tax resident even though I have no income in Malaysia?


greatstuff profile image

greatstuff 3 months ago from Malaysia Author

Yes, you are right saurabhv.


saurabhv 3 months ago

Hi,

I will be joining an IT firm in Malaysia in October 2016. My Monthly salary will be 10000 per month including allowances.My stay there is at least for a year. I just want to know how much income tax will be deducted from my salary. What I understand from your blog is that I will be charged with flat 25% for first 182 days i.e. 2500 per month will be deducted from my salary for first 182 days, after which the tax rate will reduce, right??


greatstuff profile image

greatstuff 3 months ago from Malaysia Author

Hi MIN, the article does provide answers to these issues. Let me know if you are still unclear.


lswuk3432 4 months ago

Hi, I came to KL on 9th July 2016 and I started working on 12th. Since I'll not be eligible to apply for resident this year (less than 182 days) I'll apply for it next year. But the thing is the company will send me to the Philippines for a month in May. I'm not sure whether Malaysia Gov. will count 6months after I come back from Philippines or the months (January to April) Will be counted as well so that I can apply the resident in July at least. Also, I'd like to know about the non-resident tax refund. Since the due date of Tax refund (Non resident) is on or before 30th of April, I'll not be able to change my statue to resident (less than 6 months in 2017), Can I submit for tax refund without supporting document anyway so that I can get all the tax I've pained so far to be refunded? If refund is available, how much of tax can be refunded? If you know the answer, please make a comment, 28% tax is too much!


MIN 4 months ago

Hi, i'd like to know if i'm eligible for tax refund. I arrived in 09th July '16 in KL and started working from 12th. My contract is 1 and a half year, so I'll basically stay at least 18 months here. But, I'll go to Philippines next year for a month from the company in May. i'm not sure whether the government will calculate the 6tmonths stay in Malaysia (In order to apply for the resident) after I come back from Philippines or the months that are before going to philippines are counted. Also, The due date for tax refund for non-resident without business source (M form) is on or before April. So, since I'll not be eligible for resident (less than 6month in 2017), will I be able to submit the M form without supporting documents showing that I've worked for 6months? I really have to get my tax refunded. 28% is too much! If you know the answer for my question, please make a comment. Thanks


Karthik 4 months ago

what is the income tax for every month if the salary is 7500 RM per month ?


Swarup 4 months ago

I want to know if I am in Malaysia for 182 days in this financial year but at the same time outside the country for more than 14 days continuously or in staggered manner, will that impact my resident status.

Is there something related to reset of 182 days if you stay continuous outside Malaysia.

Appreciate quick response.


Andrada C 4 months ago

Hi Greatstuff!

So I've been working in Malaysia for 6 months for an MDS company and my salary has been tax free because of it, but now I'm moving on to another company and they are telling me I have to pay 28% tax for the following 6 months! Isn't the taxation system based on resident status? If I've already been here 6 months, shouldn't they simply apply the progressive tax instead? I'm confused!


Vivian H 4 months ago

Hi Greatstuff,

Here is my question that need your advise.

1) i got a expatriates worker that working with my company for 2 months only (with a valid working permit). Within this 2 months that we had deducted their personal tax (28%) & submitted to LHDN. Now he already resigned & leave Malaysia. I need to fill up the form of CP21 to inform LHDN that this worker had left & also need to fill up the Borang M to help them to declare their tax assessment for 2016. Normally for those expatriates that not stay more than 182 days in Malaysia , how many percent for their tax chargeable?

2) For those expatriates that work & stay more than 182 days in Malaysia , when come to 2017, what form they need to fill up to do their tax assessment for 2016?


Binh Le 4 months ago

Hi

How can I pay income tax? Please read my situation below:

I am Vietnamese, I came to Malaysia on March, 2016 for one year contract - until March, 2017. But I had some issues in my family and have decided to quit that contract by the end of May, 2016, it meant I was in Malaysia less than 100 days. Now I am in Vietnam, but still do not pay income tax. My question are:

1. How much money do I have to pay for income tax?

2. Is my company responsible for doing paper work or I have to do it myself?

For last salary, my company is keeping and they talked to me that it is for income tax, then they will send balance to me back after paying. But one month has gone, they still do not pay for me?!

Just would like to get confirmation for two question above.

Thanks!


lloi 4 months ago

Hi, i am a Malaysian currently work and reside in Singapore. I bought a condo in JB with a housing loan that the full loan monthly repayment will only start in April 2018. I received a letter from inland revenue to require me to report my income because i owned a property in Malaysia. Do i need to fill income tax return now as the condo is not ready yet and thus no rental or whatsoever gain now? I pay income tax in Singapore. thank you.


rasheed 4 months ago

Hi,

im from india.on employee visa in malaysia working for 1900 basic salary.

do i need to pay tax for my basic salry?

if i have to pay how much i need to pay per year

pls send your reply to my mail

harunrasheed225@gmail.com


Haikal 5 months ago

hi, what is to be done by a non-residing Malaysian shareholder who has stopped filing his income tax - whether he needs to get income tax return statement from the country he is working in or from Malaysia.


Monica 5 months ago

Hi greatstuff, Thanks for your very useful article. Hope you can assist me further. I am a citizen of Malaysia but not a resident. I would like to invest in a property ( shop houses or land) in Malaysia. I read that there is a minimum amount of RM500k that I have to invest in. Is that correct? Also if I sell the property, will I be subjected to Capital Gains Tax? If yes, how much?


jay 5 months ago

Hi greatstuff, thanks for the information. I am expatriate working in malaysia. I have 3 sons under 18 yrs old of age and my wife is not working she just taking care of my sons. Can I submit their birth certificate to get some tax relief?


greatstuff profile image

greatstuff 5 months ago from Malaysia Author

Hi Pavan, no you cannot.


greatstuff profile image

greatstuff 5 months ago from Malaysia Author

If your stay in 2017 is for one full year, then it will be under resident


Andrew 5 months ago

I arrived in Malaysia Jan 2014 and started work in August 2014, I will be working until 25th June 2016, so I have now gone to the Tax office to get my clearance letter, (I have been paying Tax every month as a resident tax payer) and guess what they want to back date my Tax as a non resident to August 2014 as I do not have in/out stamps in my passport as I have been using an i-card... Guess what the Immigration department cannot provide me with a list of in/out of Malaysia .... guess what the Malaysian Tax department cannot check with the Malaysian immigration department but they are both Malaysian government agencies.... can you believe Malaysia needs people like me with skill sets and experience yet they basically try and cheat you when it comes to paying Tax with this kind of BS .....Its such a shame as Malaysia is a beautiful country with great people.


Hera 6 months ago

Hi,

May I ask something about my case?

I have enter in Malaysia 12 July 2015. I got the visa working on September. My company deducted my tax 26% from July 2015 and stopped at January 2016.

I could not claim the tax in April because i am not residence in 2015.

I have plan cancel my visa 23 June and come back ML on 29 June for renew visa with the other company. 30 June I will clear the tax. Because my last working is 7th July 2016 but i take the annual leave.

My question is:

1. When I clear the tax, can I claim the tax (26%)? If I can not, when will i receive the tax?

2. Any relation between tax and cancellation visa?

3. When the new company make the new visa for me, my income tax number will be change. Is it correct?

4. What difference if i cancel visa at 1 july after i clear the tax?

If I could not claim the tax for this year? Can I claim in next year? May I know the time schedule for refund the tax?

Many thanks,

Hera


David Laugharne 6 months ago

Hi Greatstuff,

I wonder if you could help.

My partner, a Philippine national has worked (on an employment pass visa) for the past 2 years.

Recently she has changed job. This involved the old visa expiring in March, a series of special passes and new visa or new company activating in April. For this tax year she has been physically present in Malaysia (apart from a 4 day exit) since January.

However, she has just received her first payslip and they have deducted 28% non resident tax. They say that on a new contract every foreigner needs to pay non resident tax from the start of their contract without considering the 2 years prior work visa or indeed the days full time in the country since January (on old work permit/special passes).

Would you be able to shed some light of the situation for us?

Also, if determined that 28% tax is unavoidable for 182 days from start of contract what exactly happens of day 183? Revert to non resident tax immediately? Is there a partial rebate for the excess tax paid during the first 182 days?

Hope you can clear these questions up for us.

Many thanks and best wishes

David


Pavan 6 months ago

Hi,

I'm travelling alone to Malaysia for work and will stay more than 200 days in Malaysia.

My doubt is, can I claim the Insurance premiums, Education Fees & Home Loan repayment amount (which incurred in India) against Malaysia Income or not?

Thanks in advance.

Pavan


ahmad hub 6 months ago

hi, i came in Malaysia in July 2015 and my company applied for my work permit the same month, according to my understanding 26% tax will be deducted from my income every month, i want to know few things, which are really confusing for me, they are: my salary is RM 2500, my employer says half of the 26% will be paid by the employer and half of it will be deducted from my salary... i left the job in the January 2016, now my company says that the i owe rm 1300 to the company which i do not understand how. secondly when i joined he company my stay was less than 182 days in Malaysia, according to this situation, advise me, how much tax i am entitled for the basic salary of 2500 RM per month, how do i owe my company this amount of 1300 rm after when i leave the company for working only for 13 days for the last working month and received the pro-rated salary for that month...


Tien 6 months ago

Hi,

I will waitting to aprrove visa. Maybe will start on july 2016 . So with this case , i dont have enough to stay malaysia 182 days in 2016. So how am i tax status in 2017 ?

1. Do I still get deduct tax rate 28% continue for first 6 month 2017

2. Do I just deduted tax as resident in 2017 ?

Hope your reply. Tks


greatstuff profile image

greatstuff 7 months ago from Malaysia Author

Study visa does not give you the right to work. When you finally get your work permit, the day will start counting from March 2016. So the tax rate will be as per the above table, depending on how long your stay during the WORK permit period (not STUDY period)


greatstuff profile image

greatstuff 7 months ago from Malaysia Author

No, it does not work that way as long as your work permit is still valid.


Lee 7 months ago

I would like to know what is my tax rate if I was here holding with study visa for 3 years and start with working visa in March 2016?


ZAHEEN 7 months ago

HI

I have completed my 160 days in Malaysia. can I take leave for 10 days (Mid of july). will again I have to start my 182 days counting or it will start from 160 days.


Deep 9 months ago

Hello greatstuff, greetings! If I stay for less than 182 days and will leave the country and do not pay the tax, then what will be be legal repercussions. Regards.


AJ 10 months ago

Hey i wonder if i already more than 6 month in previous year (2015) and already received resident status will it be continue for 2016 as well or will they start it over 6 month again and deduct now as 28% which is very high!


Michael 10 months ago

Hi,

I have a question about non-residence status tax of 2016

I arrived in KL on 9th Aug 2015, and my company helped me to apply Working Visa after it, and I got the visa in around 10 days later and start to work on 18th Aug 2015. From that time to Dec 2015, I am paying 25% non residence tax rate, and I found that this month it is changed to 28% (due to budget 2016), and on 7th Feb I still stay 182 days already and should have the "resident status" after that day, so what will happen of my salary on Feb, will company still deduct me 28% or prorated (first 7 days 28%, the remaining days are resident status rate?)

The company was telling me before I come to work, that I am able to get back the difference between resident rate and non-resident rate after I stayed here 182 days, is that true? Thanks.


Kuee 12 months ago

Hi greatstuff, wonderful and very helpful post. I have a question regarding my case. I arrived in Malaysia on 12th June 2015 and employment pass was issued on 19th June 2015. I visited my home country for 17 days in September and went to Europe for 6 days in October to attend an official meeting. I believe since I would be spending more than 182 days in Malaysia by end of 2015, I should be considered as a resident. My payroll doesn't agree and they are deducting 26% flat. My query is when I submit my tax return in Mar/Apr 2016, would I be able to claim back the excess amount I paid in 2015?

Many thanks


mady 12 months ago

Hello I'd like to know, how about for contract work that lasts only 3 weeks. I have a friend who cannot receive his contract check unless he pays the tax. He is unprepared for this and has no sufficient fund to pay the tax. Couldn't the government simply deduct the tax from the total contract price? The project is going on but this problem is serious as he also needs logistics throughout the project. What help is available for him? Thank you!


kelvin 12 months ago

Hi Greatstuff,

During the first 182 days, I will be taxed based on the flat 25% and once past the 182 days, it will start following the table, right?My question is, will some value of the flat 25% tax be available for tax relief during the basis year end, or will it be gone forever?


greatstuff profile image

greatstuff 12 months ago from Malaysia Author

Hi VKrudra. Go the nearest IRD office and present your case to them. They will assist you.


VKrudra 13 months ago

Hi,

I have filed my income tax last year( as a tax resident) and I need to get a refund. I started work in Sep 8 th 2014 and I was taxed at 25% TDS. I am a tax resident for the year 2015 ( though the tax filing is not done yet ) , so , I assumed that I will be a tax resident for 2014 as well and filed accordingly. I have not received the refund till date. What should I do now ?

Regards


greatstuff profile image

greatstuff 17 months ago from Malaysia Author

Hi Sean, it should be from the date of your work permit


Sean 17 months ago

Hi, Greatstuff, I have a question.

I start working since the end of April but I moved to Malaysia in the end of March (1 month waiting for work permit). So 182 days will be counted from April (working day) or from March (since I arrived in Malay)?

Thanks for your help in advance.


Ramesh 17 months ago

Hi greatstuff ,

Thanks for sharing good info.

I'm from india and I joined on 13 april 2014 as IT admin in malaysia. Currently my company is deducting 26% tax everymonth.

I've 2 Question in regards to Tax, please reply

1. Suppose If i stay more then 182 days i.e till september and i wish to leave by November. How will i get refund of my excess tax paid and how to file return??

2. If i stay for an year then leave by may-june 2016 then what will be the tax amount from Jan-2016 cycle start and will leave before 182 days in 2016 tax year?

Thanks in advance , ramesh


Meed 17 months ago

Hi greatstuff, thank you very much for this wonderful info, it cleared many questions that were in my mind. Just a quick question, I joined my company in Malaysia on 12th June, 2015. This way by the end of calender year 2015, i would have already lived 201 days i.e. more than 182 days. Does that mean that I will be taxed as a resident FTY 2015, or for initial 182 days it's 25% flat and for remaining 19 days and years after as per the given slabs?


greatstuff profile image

greatstuff 17 months ago from Malaysia Author

Hi keshan. At RM1500pm salary scale, your net income that is taxable will be below the taxable bracket. Hence, based on your RM1500pm salary (assuming it is inclusive of all benefits, allowances, bonuses, overtime etc) and provided you have been living/working in Malaysia for more than 182 days per year, there is no tax to be paid


keshan 17 months ago

Hi,

i came to malaysia under contractor visa.my salary is 1500rm per month.and my visa going to expire on 31st of july..and same time i decided to go back my country after my visa finish.so now my boss going to keep my last salary he said that i must pay income tax..i am confused in this matter plz give me a great answer.thankz


greatstuff profile image

greatstuff 18 months ago from Malaysia Author

Hi jk. Sorry, I don't quite understand your question. If you intend to change company and work for another company when your visa expires, you will have to get that new company to assist you. Depending on the position applied for, the salary is immaterial for the work visa.


jk 18 months ago

hi

i am working here since 2013 sep, my visa is going to finish this year my salary is 3000 myr, the tax based on the above mentioned amount is cleared.Now i want to change to my company somebody told me for applying new visa i have to pay the a tax based on 5000 myr which is minimum salary in Malaysia nw i am in confusion please help me to get a solution


Amit Kumar 19 months ago

Hi Great Stuff ,

Thanks for the such a nice description

I have joined company in malaysia in april 2015 , and will leave malaysia after 7 months from the date of arrival

. since I will complete 183 days , can I claim my extra Income tax deducted , if yes then how to do that?

Thanks


greatstuff profile image

greatstuff 19 months ago from Malaysia Author

Hi SH

Refunds are credited directly to your bank account, but you don't get any letter from them to inform you when this is done. If you have doubt on this matter, I suggest you go and see them to clarify on your refund.


SH 19 months ago

hi GreatStuff,

I've been working in malaysia since 9/2013 and did my e-filling for 2013, 2014.

but i am yet to receive any refunds!!!!

the tax paid in excess for 2013 was almost 5000 and for 2014 was 0.01 cents.

I'm thinking of visit the hasil tomorrow and ask what's happening.

Can i still get my refund for 2013 as long as I'm done with e-filling before due date?

and one more thing, do i get my refund by cheque? or to my account?


George 20 months ago

Hi GreatStuff, quick question, for example your monthly salary is 10000RM for a year, will this be correct?

the first 6 months will be taxed by 25% since its already 2015?

the next 6 months will be taxed by 1% without any allowances added?


RJ 20 months ago

Hi GreatStuff,

Thanks for the info. Appreciated your reply.


greatstuff profile image

greatstuff 20 months ago from Malaysia Author

Hi RJ

Irrespective of the amount earned and your tax status as an expatriate worker, you still need to file in your tax return. If there is no deduction required, Inland Revenue will advise you accordingly.


RJ 20 months ago

Hi GreatStuff,

Just to add info, my employer haven't deducted me yet for Dec2014 for tax. They only have started to deduct on the month of Jan2015 and onwards.

My question is, does the tax return filing is still necessary?

Apologies for asking too many questions.

Thanks again and have a great day!


RJ 20 months ago

Hi GreatStuff,

Thank you very much to your prompt reply. Very much appreciated and helpful.

Just to clarify, it's around 8,000RM gross and not 800RM. Is it still not taxable?

Thanks in advance!


greatstuff profile image

greatstuff 20 months ago from Malaysia Author

Hi RJ

You still have to file in your tax return irrespective of your tax status and income.

For 2014, I believe that amount of RM 800 gross will not be taxable


RJ 20 months ago

Hi GreatStuff,

Another question for:

'If your stay in Malaysia is less than 60 days, then any income, fee, commissions or bonus received will not be taxed"

In my case, I arrived here in Malaysia last Dec2014 and my Working Visa was issued also within the same month. I started to work on the first week of Dec214 as well. And I earned more or less 8000RM for that month. Will I be exempted for the tax payment since I was in less than 60days regardless of the salary being received? Though my work still continues up until now.

Is there still a need for me to do my tax filing? Hoping for your kind response.

Thank you!


Fantazzy 21 months ago

Hi Greatstuff.

I come from Indonesia. I married with Malaysian on January 2014 and get my spouse visa 6 month later which is on July 2014. I started worked on January 2015. So how my income tax will be calculated? based on 25% or residence tax? Thanks


Abheshek 21 months ago

I came to Malaysia on 4th of August have joined my Company on 25th of August , and company is deducting the 26 % TAX from my salary and said they will be doing the same till June 2015. I have query as the TAX filling dates are nearby . Am I eligible to get 2014 tax refund as i completed only 126 days in Malaysia till Dec 2014 what formalities i need to completed to get the refund , I have been here in Malaysia since 4th August and never went out of the country. My employment in Malaysia is 100% confirmed till Oct 2015 and I will be out of country for 25 days in May 2015.


greatstuff profile image

greatstuff 22 months ago from Malaysia Author

Hi vivi, yes you are right.


vivi 22 months ago

Hi. thank you so much for answering. It was very helpful since I've been lost with those questions (There were no answers anywhere, I tried to call the place regarding on the tax, the number the company sent me, but even them could not answer me).

However, I have one more question to make sure. So, you mean that the days of 182 days will count only after I receive the employment pass right? Which mean I will be non-resident until September if I start working from March?


greatstuff profile image

greatstuff 22 months ago from Malaysia Author

Hi vivi. Your student visa is basically for you to stay in the country for you to study. Nothing more. So even if you stayed for more than 10 years you are not allowed to work, under your study visa. But once you are given a work permit, then your visa status change and your tax structure will be based on the table as I had shown in the article. Hope this explained your situation.


vivi 22 months ago

Hi. I had been living in Malaysia since 2002, studying. I have graduated university here 2014 Nov, and i went to Korea for 20 days. I will be working from March, 2015. The company said i will have to pay for tax since I went to Korea for more than 14 days (which is the maximum days and will make me non-residents). I called the number the company gave me to confirm whether I will be treated as non-residents, however, they don't have any answer for me. Will i be treated as non-resident although i have lived here for more than 10 years?


greatstuff profile image

greatstuff 22 months ago from Malaysia Author

Hi Ramesh PS1, I am assuming that your work visa is issued in Nov 2014 (since you started work in Nov 2014), then your tax will be according to the structure as in the table shown in the article.


Ramesh PS1 22 months ago

One more scenario,

Assuming that, I have reached Malaysia on 6th November 2014 for first time and started working.

Say I did travel out of Malaysia on personnel work on 10th of Feb 2015 and return on 28th of Feb2015.

I believe my counter of 182 days will be reset while it is counting 56 days and I will restart the counter again on 28th Feb 2015 and will complete 182 days on 28th of Aug 2015 and gain resident status.

My question is,

Do I need to pay tax from 6th Nov 2014 till 28th Aug 2014 as non-Resident and rest at resident rates?

Or,

Since I got resident status in the same year, will I have to pay first 182 days at non-resident rate and rest of the income at Resident Rate?


greatstuff profile image

greatstuff 22 months ago from Malaysia Author

Hi Hendry. If you entered the country under tourist visa, then you are not allowed to work. Hence, you have no income in 2014 to declare. If your Work Visa is issued only in January 2015, then your income only starts in Jan 2015!


Hendry 22 months ago

Hi greatstuff, this is a good guides for foreigners.

I have a questions. If I work from Dec 2014, but my Work Visa is only come out on January 2015, then do I need to report my 2014 income? I am not sure if this is a common case in Malaysia (working first before the Work Visa finished), but in my office, it seems that this is a normal case :)


greatstuff profile image

greatstuff 23 months ago from Malaysia Author

Hi Ramesh. If you entered the country with a work visa that is valid from Nov 2014 onwards, then irrespective of your stay for 2014 being less than 60 days, you will still be subjected to the tax structure as described in the article. But to be sure, please drop by at the nearest IRD office to reconfirm your status.


Ramesh PS1 23 months ago

This is very helpful post and informative.

I have a clarification on the first point.

"If your stay in Malaysia is less than 60 days, then any income, fee, commissions or bonus received will not be taxed"

I came to Malaysia on 6th Nov 2014 and started working form 21st Nov 2014. I am continuing to work in 2015 but need to understand if I have to pay tax for salary and other allowance received in first 41 days of 2014 as my number of days of employment is less than 60 days in the financial year 2014.

Can you please clarify?


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

junedang, no worries. Hope you will resolve your tax issue soonest possible.


junedang 2 years ago

Thanks so much Greetstuff for ur very informative article n well informed reply. Really appreciate!


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greatstuff 2 years ago from Malaysia Author

Hi junedang. Even if the company deducts 26% for tax, the Inland Revenue will refund the difference; if it is wrongly calculated by the company. Most company will deduct more, to be on the safe side. The only disadvantage is having lesser take home pay every month, but you will get this back by May, after your tax submission. Since you have called the tax office, I strongly suggest you see them in person. Get the Inland Revenue to give a statement on the amount to deduct every month. This will be addressed to the company, and copied to you


junedang 2 years ago

Hi Greetstuff,

Many thanks for your reply, I was under Visit Pass( Professional) when I came for training. I called to the tax department, they replied that by right, I am not subjected to 26%. But Im still unsure why the company deducted. It would be great if you can help me to reconfirm again here regarding my case before I directly contact with the tax office. Thanks a lot!


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi junedang. What was the status of your visa when you came for your training? Is it under visit visa or you were already issued with a work visa?

You might have been on a visit visa when you had your training. That's why your company deducted 26% for tax.

I suggest you clear this matter directly with the nearest Inland Revenue office.


junedang 2 years ago

Hi greetstuff,

Thanks for the very informative article. May you help me to clarify the issue as below:

- Since March till August, 2014(more than 182 days), I had stayed in KL for my training program, I got allowance of RM1000/ month and didn't pay any tax.

In October, 2014 I got a new job, my first official job in Malaysia. So in this case, I believe I have already gained my resident status during the previous 6 months of training and not subjected to 26% tax. However, I still got deducted at the rate of 26% by my company since they said it my first job in Malaysia, could you please advise me on this case and to whom or which office I need to contact with, preferably by email, to get the official confirmation on this issue? Thank you very much for your help!


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi Peter. I don't think what your friend told you is correct. As long as your work permit is still valid, the holidays that you took to travel out of the country on those dates will not be used 'against you'. But to be doubly sure, I suggest you go to the nearest Inland Revenue office and seek their clarification.


Peter 2 years ago

I heard from people that I will not get my tax amount If I leave malaysia on dec 31 st and 1 st of jan. if we are out of country on these dates then there will be not be any tax returns also for the coming year there will be tax of 26% again for the first six months. Is this true? Because I am planning to visit india for my christmas holidays.Please someone clarify


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi Jack

If your stay is more than 182 days, the flat rate of 26% no longer applies. Your tax rate will vary based on your salary and it will be lower than 26% even for the first 182 days IF your stay is more than 182 days.

Every year, you are to submit your tax return by end of April and if your submissions are in order, any excess payment will be refunded by the following month in May. This will be credited directly to your Malaysian bank account.

(Your question on how to claim back excess tax paid - this will be computed when you submit your yearly return. No need to put in an additional submission)


Jack 2 years ago

Hi greatstuff,

Yes you are right I think.

So what i understood is this:

1. For the 1st 6months (or 182 days approx) I will be charged a flat tax rate of 26%.

2. Starting from the 7th month I will be put in slab as you mentioned above(resident tax rate).

Am I correct? Few more questions:

1. In general, when does a Malasyian employer refunds the excess tax deducted (during the 1st 182 days) if the employee becomes a resident thereafter? Is it after one year or from the 7th month?

2. What is the procedure to claim back the excess tax paid?

Thanks again!


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi Jack. Let me recap the tax structure first:

1. If your stay is not more than 182 days (abt 6 months), then your tax rate is 26%

2. If it is more than 182 days in a year, then your tax rate is between 0% to 26%, depending on your salary.

I believe what your employer is doing is to deduct 26% in case you decided to leave/resign earlier, within that 182 days. But if you decided to stay on, then your tax rate will be different.

I think what your employer meant is to refund the difference between your actual tax and the 26% that was deducted earlier.


Jack 2 years ago

Hi greatstuff

Hope you are doing well. I have the same questions.

I am planning to move to Malaysia from India.My employer in Malaysia mentioned that 26% of my salary will be deducted as tax for 1st 6 months.They also mentioned that all the tax that I paid in the first 6 months will be refunded to me once I complete one year of stay in Malaysia.

Can you please validate this statement given by my employer?Is the tax that I pay in the first 6 months totally refundable after one year?

Please help.

Thanks.


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi Umesh. Since you have not filed your return for the previous year, I suggest you go to the nearest IRBM to sort out your filing. If there are any excess tax payments from your monthly deduction, you will get your refund.


umesh 2 years ago

Hi ..I am umesh..I am working in malaysia last 2 years..but never apply for claim tax..is there any possibility to get back -2012/2013 tax claim.thanks


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi Ady, for your assessment year 2013, you will be subjected to 26% as it is below 182 days. For 2014 assessment, it will be calculated based on the table as shown above.


Ady 2 years ago

Hi I arrived here on 1st Aug 2013. and started working, After exactly 3 month I went back to India for 20 days. My salary was below 5k in 2013 please guide me what would be my tax. and now its too late what i need to do.

for 2014 my company is deducting Tax from my salary. in this year I went back to india for 17 days In first half of April 14. does it reflect 182 day criteria.


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Amir, your student visa will not qualify you for the Resident Status. Hence, you have to pay the 26%.


Amir 2 years ago

Hi, I was a student in Malaysia for the past 2 years. Now I am employed with a work permit. Am I considered resident? Do I still need to pay 26% on the first 182 days salary?


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi Wai. Tax rate in Malaysia is on chargeable income which is your total income less all the tax reliefs and exemptions. Rule of the thumb: if you total income averages ABOVE RM3000 per month, then you will have to pay tax.

I am assuming that your RM3,600 pm is the only source of income and your wife is not working. If she works, then either you do a joint or separate assessments.

However, if your tax reliefs and exemptions bring down the total chargeable income for the year, then you might not have to pay tax.

Example of tax reliefs are payment made for EPF and Insurance, amount spent on books and computers (with conditions), deductions for you, your wife and children etc. Example of tax exemption is money that you spent for medical expenses for your parents etc.

Hence, I will not be able to say how much is your tax payable. If any, it will be at maximum 6% of the chargeable income and not on your total salary.


Wai Ho Fung profile image

Wai Ho Fung 2 years ago from Penang, Malaysia

I was born in Hong Kong and was raised here. Married to a malaysian wife and currently under Malaysian spouse visa and work permit. My current salary is RM3600. Is my salary taxable? If yes, how much?


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greatstuff 2 years ago from Malaysia Author

Hi Julie. For the initial 182 days in 2014, you are classified as a non-resident and you will be taxed at a flat rate of 26%. After that, the total amount earned up to 31st Dec 2014 will be calculated according to the table as shown in #6. The 15.33% as shown in your pay slip could be the deduction made by your employer for payment to Inland Revenue. I can't say if the 2% is your tax rate as you have to add up all your incomes and less the allowable expenses. If there are any excess payments, these will be refunded after the April 2015 (since 30th April of every year is the last day to submit your Income tax return). Your tax return for 2015 (for income earned in Jan -March 2015) will be submitted by 30th April 2016. This will be based on the table as in #6, since your stay (which I assume is continuous with no break) is more than 182 days (as calculated from March 2014)


Julie 2 years ago

Hello,

I am an IT consultant.

I have a 1 year contract in Malaysia - March 2014 to March 2015.

My salary is MYR11,000.

In my payslip, my tax is 15.33%.

In #6 above, I fall under MYR5001-20000 which has 2%.

When will this 2% applicable to me?

Is my current tax rate of 15.33% correct?

If ever, is there a tax refund?

Thanks.


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi veera. From the information given, I assumed that you will continue to work here right up to year 2015.

For income derived in 2014 (up to 31st Dec 2014) your stay is less than 182 days. Hence, for taxation year 2014, you will be taxed based on a non-resident flat rate of 26%.

If there is no break in your stay and you continue to work in 2015, then tax for 2015 will not be a flat 26%, but will vary according to the table as shown above.


veera 2 years ago

Hi,

I am working here from 19/07/2014 as a expariate, Which is not covering 182 days. on 17/Jan/2014 it will be 182 days. So will i get the taxation as 0-26% or again 26% flat... ???? Kindly revert.

Or on Next financial year, I need to stay 182 days. Since i am not covering 182 days as of 2014. Awaiting for your reply.


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi dev. If your stay is not more than 182 days in a year, then you are a non-resident. Your working period from 24/06/2013 to 19/12/2013 is 179 days, hence you will fall under the non-resident status. However, to be sure, drop by at the Inland Revenue office to clarify if your arrival on 12 June (on Business Visa) is considered as a working period; which will then move you to the resident status.


dev 2 years ago

Hi

i come on business visa on 12/06/2013 and got Employment pass on 24/06/2013 and work till 19/12/2013.

so should i consider as resident or not resident.


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi daniha, since your stay is more than 182 days, then income received for your first 182 days will be taxed based on a non-resident flat rate of 26%. From 183rd day onward, the tax rate will vary, based on the tax table as shown above. Although you will be out the country between May and June, the above calculation still applies. If you need further clarification, visit the nearest Inland Revenue office, they will guide you on your issues if you have any.


daniha 2 years ago

Hi just want to know if I work in Malaysia since middle 2013 and I going back to my country may 2014 (come back june 2014) and will resign on 1 July. Just want to know either I need pay 26% tax


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi Marini. Technically under student visa, you are not allowed to work except at the university and there are also conditions attached to that. Hence, why do you need to go to the income tax office when you are not allowed to work with your student visa?

If you go personally to the Wangsa Maju LHDN office, I am sure someone will help you out. Don't call them, see them in person.

I hope this helps.


Marini 2 years ago

Hi, I believe that I am a resident in year 2014 because I have been staying in Malaysia since 2011 for my master degree. Came back several time to my country but the duration for each trip is less than 14 days. But, how to prove it? Because I did come to LHDN Wangsamaju, the staff in the counter said that I am not resident because I stay as a student, not with employment pass. I have been calling LHDN several time but no success in finding an answer.


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

@teaches12345, we are in the midst of filing our taxes as well. Last day will be end of next month! Thanks for the visit and commenting


teaches12345 profile image

teaches12345 2 years ago

You certainly have done your work on this post. As we prepare to do our taxes, you have reminded me of some issues we still must cover here in the US. Well done!


greatstuff profile image

greatstuff 2 years ago from Malaysia Author

Hi Nell. Thanks for your visit, your comment, vote & share. Tax is always a problem even if you don't work abroad. Some countries are tax free, but there are other hidden costs that will add to your overall cost of living. Dubai is a classic example of this.


Nell Rose profile image

Nell Rose 2 years ago from England

Hi greatstuff, this is really useful, and well explained for someone who needs to know this information, moving abroad can be a daunting thing, so anything that can help especially with the tax problems is good, voted up and shared.

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