MALAYSIA: The Ministry of Finance (MOF) announced that individuals with foreign income sources, and dividend incomes from limited liability companies and partnerships, are exempted from paying taxes effective January 2, 2022, to December 31, 2026.
“For individual taxpayers, the government provides (an) exemption to all individuals except those who conduct business partnership in Malaysia, which will be subject to tax on foreign-sourced income (FSI) received. Non-resident categories (individuals, companies, and others) remain eligible for income tax exemption,” it said in a statement.
The ministry added that FSIs received in the year of assessment 2022 is also exempt from tax calculation.
Last year, while tackling Budget 2022, the government had proposed the removal of the tax exemption on FSIs remitted to Malaysia, citing it as part of revenue sustainability measures in line with international regulations. Companies and individuals with income sources abroad objected to the plan.
FSI exemptions have been implemented since 1998 for companies. Individual earners have been exempted since 2004.