Effective 1 January 2022, the tax exemption for foreign-sourced income (“FSI”) received by Malaysian residents provided for under Para 28 was removed following the Budget 2022 made on 29 October 2021.
The removal of the tax exemption for foreign-sourced income received by Malaysian residents implies that this type of income will be taxable in Malaysia, unless eligible for tax exemptions. Foreign Income received in Malaysia which is eligible for the tax exemptions are as follows:
- Foreign dividend income received in Malaysia by a resident company, resident LLP and resident individual in relation to a partnership business in Malaysia [P.U.(A) 235/2022].
- All foreign income excludes income from a partnership business received in Malaysia by a resident individual [P.U.(A) 234/2022].
This means that Malaysian residents who receive income from foreign sources, unless qualifying for the exemption, will have to pay taxes on that income to the Malaysian government.
The amount of tax to be paid will depend on the applicable tax rates and the amount of foreign-sourced income received.
Amended Guidelines for tax treatment in relation to income received from abroad provide explanations and clarifications on the subsequent terms: 4.2 "Received in Malaysia" means transferred or brought into Malaysia whether in the form of cash or through electronic funds transfer, or both. 4.3 “Cash” means notes, coins, and cheques; 4.4 "Electronic fund transfer" means bank transfer (e.g. credit transfer, debit transfer), payment card (debit card, credit card, and charge card), electronic money (e-money), privately-issued digital assets (e.g. crypto assets, stablecoins) and Central bank digital currency (CBDC).
CTIM has requested clarification from IRBM regarding the Foreign currency exchange rate for foreign-source income received in Malaysia.
Such exchange rates:-
1) must refer to the monthly rate that is available via the link published on IRBM’s website: Accountant Generals Department of Malaysia (AGD) – Foreign Currency Exchange, or
2) must this be based on the remittance date (e.g. rate available on the BNM website)?
LHDNM’s Feedback:
The amount of foreign income received in Malaysia must be reported according to the foreign currency exchange rate on the date the income is received in Malaysia.
Taxpayers can use the exchange rate based on the rate on the Official Portal of the Accountant General’s Department (AGD) or, if the transfer is through a bank entity, the foreign currency exchange rate used by the bank.
The exchange rate, either AGD or the foreign currency exchange rate used by the bank (through a bank entity), should be consistent for a particular assessment year.
Disclaimer:
The articles, templates, and other materials on our website are provided only for your reference.
While we strive to ensure that the information presented is current and accurate, we cannot guarantee the completeness, reliability, suitability, or availability of the website or its content, including any related graphics. Consequently, any reliance on this information is entirely at your own risk.
If you intend to use the content of our videos and publications as a reference, we recommend that you take the following steps:
- Verify that the information provided is current, accurate, and complete.
- Seek additional professional opinions, as the scope and extent of each issue, may be unique.
免责声明:
我们网站上的文章、模板和其他材料只供参考。
虽然我们努力确保所提供的信息是最新和准确的,但我们不能保证网站或其内容,包括任何相关图形的完整性、可靠性、适用性或可用性。因此,您需要承担使用这些信息所带来的风险。
如果你打算使用我们的视频和出版物的内容作为参考,我们建议你采取以下步骤:
- 核实所提供的信息是最新的、准确的和完整的。
- 寻求额外的专业意见,因为每个问题的范围和程度,可能是独特的。
Keep in touch with us so that you can receive timely updates
请与我们保持联系,以获得即时更新。
1. Website ✍️ https://www.ccs-co.com/ 2. Telegram ✍️ http://bit.ly/YourAuditor 3. Facebook ✍
- https://www.facebook.com/YourHRAdvisory/?ref=pages_you_manage
- https://www.facebook.com/YourAuditor/?ref=pages_you_manage
4. Blog ✍ https://lnkd.in/e-Pu8_G 5. Google ✍ https://lnkd.in/ehZE6mxy
6. LinkedIn ✍ https://www.linkedin.com/company/74734209/admin/