• 1000

Further to the Ministry of Finance (“MOF”)’s announcement on 30 December 2021, the long awaited Orders on FSI received in Malaysia have been gazetted.

The following FSI which is brought into Malaysia from 1 January 2022 to 31 December 2026 will remain exempt from Malaysian income tax:


Category of Resident Taxpayers

Type of Foreign Income Exempted



All classes of income under Section 4 of the Income Tax Act, 1967 (excluding a source of income from a partnership business in Malaysia)



  • Companies incorporated or registered under the Companies Act 2016
  • Limited Liability Partnerships registered under the Limited Liability Partnerships Act 2012
  • Individuals who brought into Malaysia foreign sourced dividends in relation to a partnership business in Malaysia

(excluding those carrying on the business of banking, insurance, or sea or air transport)


Dividend income

The exemption of the said foreign income would be subjected to the fulfillment of the following conditions:




  1. The income has been subjected to tax of a similar character to income tax under the law of the originating jurisdiction.


  1. The income has been subjected to tax of a similar character to income tax under the law of the originating jurisdiction; and

  2. The highest rate of tax charged by the originating jurisdiction is not less than 15%.

Based on the Orders, the exemptions are subject to compliance with the conditions imposed by the MOF as specified in the guidelines to be issued by the Malaysian Inland Revenue Board (“MIRB”).  This will be particularly important in meeting the minimum 15% tax rate charged by the originating jurisdiction where dividends are paid to a Malaysian resident through intermediate holding companies.  The guidelines have not been issued by the MIRB to date.

Further, any deduction in relation to the income exempted shall be disregarded in ascertaining the chargeable income of the qualifying person.

The Orders may be accessed from the links above.

Petaling Jaya Office

Soh Lian Seng
Executive Director -
Head of Tax and Head of Tax Dispute Resolution
+ 603 7721 7019

Bob Kee
Executive Director -
Head of Transfer Pricing
+ 603 7721 7029

Tai Lai Kok
Executive Director -
Head of Corporate Tax
+ 603 7721 7020

Long Yen Ping
Executive Director -
Head of Global Mobility Services
+ 603 7721 7018

Ng Sue Lynn
Executive Director -
Head of Indirect Tax
+ 603 7721 7271

Outstation Offices

Penang Office

Evelyn Lee
Executive Director -
Penang Tax
+604 238 2288 (ext. 312)

Ipoh Office

Crystal Chuah Yoke Chin
Associate Director -
Ipoh Tax
+605 253 1188 (ext. 320)

Kuching & Miri Office

Regina Lau
Executive Director -
Kuching & Miri Tax
+6082 268 308 (ext. 2188)

Kota Kinabalu Office

Titus Tseu
Executive Director -
Kota Kinabalu Tax
+6088 363 020 (ext. 2822)

Johor Bahru Office

Ng Fie Lih
Executive Director -
Johor Bahru Tax
+607 266 2213 (ext. 2514)