Malaysia: Tax on foreign-source income remittance
The tax would be imposed at a transitional tax rate of 3% based on the gross amount received.
Tax would be imposed at a transitional tax rate of 3% based on the gross amount received
A provision in the Finance Bill would tax foreign-source income received by any Malaysian resident person, effective from 1 January 2022.
The tax would be imposed at a transitional tax rate of 3% based on the gross amount received, from 1 January 2022 through 30 June 2022.
The Inland Revenue Board issued a media release about the introduction of a special program for foreign income remittance during the transitional period. Under the program, only remittances of foreign income would be subject to the tax.
- The tax authority is ready to accept any disclosure / declaration made by taxpayers, without conducting a tax audit or investigation.
- Taxpayers seeking to participate in the program must make a declaration not later than 30 days after the end of program (on or before 30 July 2022).
- Any tax payment arising from such foreign income remittance would be due on the statutory or extended submission deadline of the tax return for the relevant year of assessment.
- Once the program expires, the tax authority will scrutinize information on funds kept overseas by Malaysian resident persons, pursuant to exchange of information agreements with foreign countries. Where taxpayers are subsequently found to be under-declaring their foreign-sourced income remitted into Malaysia, or even not reporting Malaysian-sourced income from overseas, additional assessment together with penalties could be assessed.
Read a November 2021 report prepared by the KPMG member firm in Malaysia
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.