Procedimiento para la presentación telemática por Internet de las declaraciones correspondientes al modelo 270

14.1 Tax residence

For tax purposes, an individual is treated as a resident if he is physically present in Malaysia in a particular calendar year for 182 days or more. However, if his period of stay is less, he may still be resident if certain conditions are satisfied.

14.2 Rates of tax and personal reliefs

For residents, the rate of tax is on a graduated scale on the chargeable income after deduction of reliefs. The rates of tax are as shown in Appendix VI.

The reliefs available to a resident in Malaysia are summarised in Appendix VII.

For non-residents, the rate of tax is 28% on the gross income. No reliefs are available to a non-resident.

14.3 Separate assessment for wife

A wife's incomes from all sources are separately assessed from that of her husband unless she elects for her income to be combined with that of her husband.

14.4 Short term employment

Income from an employment exercised in Malaysia for a period not exceeding sixty days in a calendar year is tax exempt provided the employee is not resident in Malaysia for tax purposes for the basis year concerned. This provision does not apply to professional entertainers and non-resident directors.

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14.5 Employees in Malaysia

An employee exercising an employment in Malaysia is taxable on his full income for the exercise of that employment, notwithstanding that part of his income may be paid to him outside Malaysia.

Employment income is deemed to be derived from Malaysia:

a. For any period during which the employment is exercised in Malaysia;

b. For any period of leave attributable to the exercise of the employment in Malaysia; or

c. For any period during which the employee performs outside Malaysia duties incidental to the exercise of the employment in Malaysia.

14.6 Exemptions

Exemption from income tax in the following circumstances: Period of less than 60 days in Malaysia

The income of an individual who is not a tax resident, from an employment exercised in Malaysia is exempted from tax where the employment is exercised for the following period(s):-

a. for a period or periods which together do not exceed sixty (60) days in a calendar year; or b. or a continuous period (not exceeding sixty days) which overlaps over two calendar years.

Double Taxation Agreements 

Period of more than 60 days but less than 183 days in Malaysia 

Malaysia has signed double taxation agreements (DTA) with more than 65 countries. Generally, the income of an individual from an employment exercised in Malaysia is exempted from Malaysian income tax where the following conditions are satisfied:-

a. the employee is present in Malaysia for a period or periods not exceeding in the aggregate 183 days in the basis year;

b. the remuneration of the employee is paid by, or on behalf of, a person who is not a resident of Malaysia; and

c. the remuneration is not deductible in determining taxable profits of a permanent establishment which that person has in Malaysia.

The precise conditions are provided in the DTA of the countries concerned.

Operational Headquarter/Regional Office 

The income of a non-citizen who is employed by a company with Approved Operational Headquarter status or a Malaysian regional office of a foreign company is exempted from income tax on income derived in respect of the period during which the employment is exercised outside Malaysia. The exemption would only apply to the period when the employment is exercised outside Malaysia and would not be applicable for the number of days that the individual is outside Malaysia for personal reasons or on vacation.

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International Procurement Centre (IPC) / Regional Distribution Centre (RDC)

Expatriate employees employed by companies with IPC or RDC status are accorded the same tax treatment as that given to expatriate employees working in an OHQ or a Regional Office.

Labuan Offshore Company  Managers

50% of gross income derived by a non-citizen exercising an employment in Labuan, in a managerial capacity in an offshore company, is exempted from income tax.

Effective: From Year of assessment 1992 to Year of assessment 2010

Directors

Fees received by a non-citizen individual in his capacity as a director of an offshore company is exempted from income tax.

Effective: Year of Assessment 2002 to Year of Assessment 2010

Offshore Company

An offshore company refers to an offshore company incorporated under the Offshore Companies Act 1990, and includes a foreign offshore company registered under the Of fshore Companies Act 1990, a licensed Malaysian offshore bank, an offshore limited partnership and an offshore trust.

Compliance requirements for an expatriate employee exercising employment in Malaysia

1. UPON ARRIVAL IN MALAYSIA

An expatriate employee having a source of income in Malaysia for the first time is required to notif y the Inland Revenue within two months of arrival in Malaysia.

2. SUBMISSION OF INCOME TAX RETURN

An expatriate employee is required to complete the Income Tax Return and submit it to the Inland Revenue before 30th April of each year.

3. BEFORE LEAVING MALAYSIA

An expatriate employee is required to obtain tax clearance before leaving Malaysia upon expiry of his employment contract or cessation of employment.

To determine the tax residence of an expatriate employee for tax purpose for the duration of his employment in Malaysia, the employee is required to submit his original passport together with a photostated copy thereof to the Inland Revenue for verification, before departure from Malaysia on completion of assignment.

It is therefore important for the expatriate employee to ensure that all his entries and exits from Malaysia are properly recorded and stamped on his ori ginal passport. In the absence of t he original passport or any other documentary proof of his stay in Malaysia, the Inland Revenue may tax the expatriate employee as a non – resident at the rate of 28% on his gross income without granting any personal reliefs.

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Where a “smart” card is used for entering and leaving Malaysia, the expatriate employee is required to obtain a summary of his movements into and outside Malaysia from the Malaysian Immigration Department for every entry and departure to facilitate the determination of his tax residence during the duration of his employment in Malaysia. The expatriate employee is advised to r etain the counterfoil of all his air tickets for easy retrieval of information regarding his movements into and outside Malaysia.

Where the employee has already left Malaysia w ithout his passport being verified by t he Inland Revenue, a photostated copy (complete passport) verified by the Malaysian Embassy/Consular overseas is acceptable by the Inland Revenue.

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