Foreign Income Remitted Into Malaysia Taxable 2022

Don’t forget to claim double tax relief. T&C apply

Previously, Malaysia taxes only income that accrues in or is derived from the country, foreign income derived by a resident is not taxed in Malaysia.

But …From 1 January 2022

01Foreign income remitted into Malaysia will be subjected to tax.

02Double Tax Relief

A tax resident is entitled to claim foreign tax credits against Malaysian tax.

Where a double tax treaty exists, the credit available is the whole of the foreign tax paid or the Malaysian tax levied, whichever is lower.

In the absence of a double tax treaty, the credit available is restricted to half of the foreign tax paid.

03Double Tax Treaty (DTA)

The objective of a Double Tax Agreement (DTA) is the avoidance or minimisation of double taxation.

This is achieved mainly by the granting of double tax relief by the country of residence.

Foreign tax paid may be credited against Malaysian tax on the same profits, but the credit is limited to the amount of Malaysian tax payable on the foreign income.

04How to claim double tax relief

A claim for tax treaty relief can be made in a taxpayer' s income tax return form or a written request can be made for treaty relief within two years from the end of the relevant year.

05Double Tax Treat with Malaysia

As at 21 June 2019, the status of Malaysian DTAs

https://www.hasil.gov.my/bt_goindex.php?bt_kump=5&bt_skum=5&bt_posi=4&bt_unit=1&bt_sequ=1&bt_lgv=2

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