Expatriate tax ebook - Malaysia

Facts and figures

Pre arrival procedures
Employment visas
Tax year
Tax returns and compliance
Income tax rates

Pre arrival procedures
An expatriate who requires a work visa must apply for their visa before taking up an employment in Malaysia.

Employment visas
An expatriate taking up employment in Malaysia must apply for an employment pass before commencing employment. A local sponsor, who is usually the employing company in Malaysia, is required to support the application.

If the expatriate’s spouse and children also relocate to Malaysia, they will require a dependent’s pass.

Tax year
The tax year or year of assessment (YA) for individual tax runs from 1 January to 31 December. Malaysia adopts a current year basis of assessment. This means that income for the calendar year 2011 is taxable in the YA 2011.

Tax returns and compliance
An employee has to file an income tax return by 30 April each year. There are schedular tax deductions (STD, i.e. pay-as-you-earn scheme) to be made by the employer for remuneration paid to an employee.

The employer is required to file a leavers form with the tax authorities no later than 1 month from the employee’s expected date of departure. For tax clearance purposes, the employer is required to withhold monies due to the employee from the date of notification of departure from Malaysia.

Income tax rates - YA 2011
The tax charged for YA 2011 is at progressive rates, ranging from 0% (for the first RM2,500) to 26% (for income exceeding RM250,000).

Information about Malaysia: