eKTP 43

Withholding Tax
Part 1 of 3


Withholding Tax (WHT) is withhold on the payment made to non-residents (NR) who has business dealing in Malaysia.

Withholding Tax is applicable for the following six types of payments made to NR

a. Special class of income (Section 4A)
b. Interest (Section 15)
c. Royalty (section 15)
d. Contract payment (Section 107)
e. Public entertainer (Section 109A)
f. Other income under Section 4(f) (Section 15B)

The WHT is applicable only when all the following factors are present

1. The recipient is a non-resident (NR);
2. The income of NR has to be one of the income stated in the above (a) to (f)
3. Such income has to be deemed derived from Malaysia;
4. The income is not attributable to a business carried on by the NR in Malaysia.

The responsibility of the Malaysian payer is the agent for the non-resident. When the payer is made the type of payment as stated in the above (a) to (f) or credit such payment to the non-resident. He shall within one month after the payment or crediting such payment render an account and pay the amount of WHT to the Director General.

Prior to 17 January 2017, income from services rendered by non-resident under Special Classes of Income under Section 4A where the services rendered at outside Malaysia, the payment made to NR is not subject to WHT.

In the past few months, there are minor changes on WHT, i.e. the Finance Act 2017 has been published in the Gazette on 16 January 2017 and come into operation on 17 January 2017.

Please follow us on the minor changes on WHT in next eKTP 44.