malaysiantaxsystem.docVIP

Malaysian Tax System Personal Income Tax Who is Liable? Any individual who has income accruing in or derived from Malaysia or received in Malaysia from outside Malaysia for a year of assessment is liable to tax in Malaysia. A resident individual is subject to tax on income accruing in or derived from Malaysia; and income received in Malaysia from outside Malaysia, while a non-resident individual is subject to tax on income accruing in or derived from Malaysia. However, with effect from the year of assessment 2004, income?received in?Malaysia by an individual for a year of assessment that is derived from sources outside Malaysia is exempted from tax. Income Subject to tax Section 4, Income Tax Act 1967 (ITA 1967), classifies income that is subject to tax into main classes as follows: Gains or profits from a business, for whatever period of time carried on; Gains or profits from an employment; Dividends, interest or discounts; Rents, royalties or premiums; Pensions, annuities or other periodical payments not falling under any of the foregoing paragraphs; Gains or profits not falling under any of the foregoing paragraphs. In addition, under section 4A, ITA 1967, the special classes of income derived from Malaysia of a non-resident individual are subject to tax in respect of the following: Amounts paid in consideration of services rendered by the person or his employee in connection with the use of property or rights belonging to, or the installation or operation of any plant, machinery or other apparatus purchased from, such person. Amounts paid in consideration of technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme; Rent or other payments made under any agreement or arrangement for the use of any moveable property. Capital Gains In Malaysia, capital gains tax is in the form of Real Property Gains Tax (RPGT). RP