Malaysia: Remittance of withholding tax on payments made to resident individual agents, dealers or distributors deferred

An announcement that implementation of remittance of withholding tax will be deferred until 31 March 2022

Remittance of withholding tax will be deferred until 31 March 2022

Effective from 1 January 2022, payments made by companies in monetary form to their authorised agents, dealers or distributors (ADDs) arising from sales, transactions or schemes carried out by them, are subjected to 2% withholding tax.

The withholding tax is only applicable when the ADDs are resident individuals who have received payments of more than RM100,000 whether in monetary form or otherwise, from the same company in the preceding basis year for a year of assessment.  The withholding tax must be remitted to the Director General of the Inland Revenue Board within 30 days after paying or crediting the ADDs.

The Inland Revenue Board on 12 January 2022, issued a media release to announce that the implementation of the remittance of the withholding tax will be deferred until 31 March 2022.  In this regard, companies are allowed to remit the withholding tax, when applicable, on payments made to ADDs from January 2022 to March 2022, starting from 1 April 2022.

Read a January 2022 report prepared by the KPMG member firm in Malaysia


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