Tax is a topic that we all prefer to ignore. However, as an ex-pat, it’s necessary to understand how the tax laws in Malaysia affect you.

Need to know

  • The Malaysian tax year runs from 1 January to 31 December.

  • Tax returns are to be lodged by 30 April.

  • The tax authority is the IRBM, The Inland Revenue Board of Malaysia.

  • For tax purposes, you are a resident if you have lived 182 days in a calendar year in Malaysia.

  • You can use an income tax calculator to estimate your taxes.

  • Consult the Inland Revenue Board of Malaysia website for all tax-related queries and which form you need to file.

  • It’s often advisable to employ a reputable tax agent to assist you with your tax return and any tax-related queries.

What taxes apply to ex-pats?

The amount of tax payable in Malaysia depends on your residence status and the kind of visa you have.

  • Holders of the MM2H visa, Malaysia My Second Home, pay no tax on their earnings. This visa is a government initiative to attract foreign investors and promote Malaysia as a safe and positive country to live in for foreigners.

  • If you qualify as a resident in Malaysia, you will pay the same amount of tax as Malaysians.

Taxable income of RM 50,001 to RM 70,000 pay 13% tax

Taxable income of RM 70,001 to RM 100,000 pay 21% tax

Taxable income of RM 100,001 to RM 250,000 pay 24% tax

Taxable income of RM 250,001 to RM 400,000 pay 24.5% tax

With over RM 2,000,001 paying 30% tax

  • Non-residents are taxed at a flat 30% on all income.

Goods and Services Taxes in Malaysia

The GST in Malaysia is known as Sales and Services tax SST and is 10 % on most goods and services.

SST is reduced to 6 % for restaurants, hotels and accommodations, car hire, domestic flights, insurance, credit cards, legal and accounting, business consulting, electricity, pay-TV, and digital supplies.

SST is reduced to 5 % for food and petrol and building materials.

The SST is payable by the consumer in the price of the goods or services.

Capital Gains Tax

If you decide to sell a property, business, or residential, you will be subject to tax on any profit.

In case your home sells at a loss, no tax will be payable.

In Conclusion

No one looks forward to tax time. Completing one’s tax form is a stressful chore for most people, especially, when tax rules change each year. Therefore, it is advisable to consult a reputable tax agent who knows the ins and outs and can save you the most money.