Malaysia Personal Income Tax Guide For Expatriate Employment Pass Visa Holders
Attention to expatriates who works in Malaysia. Before you can renew your employment pass (EP), have you gotten your income tax submission to your nearest LHDN / Inland Revenue Board of Malaysia (IRB) and paid the tax?
It is mandatory for all expatriates to pay taxes and failing to do that may risk the chances of your professional work visa renewal. The consequences is you wont able to have valid permit to stay in Malaysia and has to make arrangement to leave the country.
Lets look at the Malaysia Income Tax Guide below.
Assessment Year 2020
|
Chargeable Income |
Calculations (RM) |
Rate % |
Tax(RM) |
|
0 – 5,000 |
On the First 5,000 |
0 |
0 |
|
5,001 – 20,000 |
On the First 5,000 |
1 |
0 |
|
20,001 – 35,000 |
On the First 20,000 |
3 |
150 |
|
35,001 – 50,000 |
On the First 35,000 |
8 |
600 |
|
50,001 – 70,000 |
On the First 50,000 |
14 |
1,800 |
|
70,001 – 100,000 |
On the First 70,000 |
21 |
4,600 |
|
100,001 – 250,000 |
On the First 100,000 |
24 |
10,900 |
|
250,001 – 400,000 |
On the First 250,000 |
24.5 |
46,900 |
|
400,001 – 600,000 |
On the First 400,000 |
25 |
83,650 |
|
600,001 – 1,000,000 |
On the First 600,000 |
26 |
133,650 |
|
1,000,001 – 2,000,000 |
On the First 1,000,000 |
28 |
237,650 |
|
Exceeding 2,000,000 |
On the First 2,000,000 |
30 |
517,650 |
Tax relief and deductions
The Malaysian government offers several tax deductions and benefits that expatriate workers who qualify as tax residents are eligible for.
These include:
- Tax relief for a spouse (so long as the spouse does not earn an income in or out of Malaysia);
- Tax relief for taxpayers who have to pay parental care;
- Tax relief for each child below the age of 18; and
- Tax relief for children studying at the tertiary level.
Compliance and payment
In Malaysia, the tax year runs in accordance with the calendar year, beginning on January 1 and ending on December 31. All tax returns must be completed and returned before April 30 of the following year.
To file income tax, an expatriate needs to obtain an income tax number from the LHDN / Inland Revenue Board of Malaysia (IRB). Typically, companies obtain income tax numbers for their foreign expatriates. However, if a company fails to obtain one, the expatriates can register for an income tax number at the nearest IRB office.
If an expatriate makes an incorrect tax return either by omitting or understating their income, the IRB has the right to fine that individual 100 percent of the undercharged tax.
Late income tax submissions may result in a disciplinary fee amounting to a 10 percent increment of the tax payable.
Expatriates working in Malaysia for more than 60 days but less than 182 days are considered non-tax residents and are subject to a tax rate of 30 percent. Foreign expatriates should seek help from registered local tax advisors to better understand their tax liabilities.
Article source: Malaysia Personal Income Tax Guide For Expatriate Employment Pass Visa Holders
Should you need assistance from registered local tax advisors / book keepers for income tax submission, kindly contact us.