Different Types of Taxes in Malaysia

How many types of taxes are in Malaysia?

There are two types of taxes in Malaysia which consists of direct tax and indirect tax.

1. Direct Tax

   Direct tax is a tax that is levied on a person or enterprise’s income. The taxpayer is paid directly to the tax collector. Inland Revenue Board Malaysia (IRBM) is responsible for the direct tax. The direct tax consists of:
   

   Types of Taxes	Individual	Corporate
   Income Tax	Tax Resident : 0% – 30%	SME : 1st RM600,000 Chargeable Income at 17% ; and subsequent at 24%
   	Non Tax Resident : 30%	Non SME : 24%
   Withholding Tax	N/A	Interest : 15% Services : 10% Royalty : 10% Contract Fees : 10% (Corporate) + 3% (Staff) Public Entertainer : 15% Other Income : 10%
   Petroleum Income Tax	N/A	38%
   Real Property Gains Tax [also applicable to Real Property Shares (RPC)]	0% – 30%	10% to 30%
   Stamp Duty (Ad Valorem)	Properties 1% – 4% Stocks : 0.3% Service / Loan Agreements : 0.5%	Properties 1% – 4% Stocks : 0.3% Service / Loan Agreements : 0.5%

   .

2. Indirect Tax

   An indirect tax is a tax that is excised to a person who consumes goods and services. The taxpayer is paid indirectly to the tax collector. Royal Malaysian Customs Department is responsible for the indirect tax. The indirect tax consists of:

   Types of Taxes	Threshold or Products	Tax Rate
   Sales Tax	Upon Importation; or Registered Manufacturer (achieved RM50,000 Sales of Taxable Goods)	Exempt, 5% or 10%
   Service Tax	Registered Taxable Service Provider; Imported Taxable Service; and Digital Services	6%
   Excise Duties	Liquor; Cigarettes, tobacco and tobacco products; Motor Vehicles; Playing cards (Playing Cards); and Mahjong tiles.	Vary according to different types of products
   Import Duties	Classes of Goods can refer to : Link	2% to 60%

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