Foreign source income taxable in Malaysia 2022

01Foreign source income taxable in Malaysia 2022

THE government has made a surprising U-turn on Dec 30, 2021 after announcing that foreign-sourced income received in Malaysia by Malaysian tax residents will be taxed.

02Current Ruling

The following foreign-sourced income received will continue to be exempted from Malaysian income tax from 1 January 2022 to 31 December 2026 (5 years)

• Dividend income received by resident companies and limited liability partnerships will be exempted to 2026.
• All classes of income received by resident individuals will be exempted by 2026.

03Why Partnership not Exempted?

Resident partnerships which carry on business will not be exempted. But partnerships as a general rule are not taxed. It is the individual partners who are taxed.

04Final Words

Let’s wait for IRB further clarification on partnership matter

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