– The employment income would only be taxed in Malaysia if the employment income is deemed derived from Malaysia under Section 13(2) and Section 13(3) of Income Tax Act 1967.
Employer is a resident in Malaysia
What is Section 13(3) of the Income Tax Act?
An employee is a citizen and public service/statutory authority
What factors are irrelevant to determining the derivation of employment income?
The irrelevant factors in determining the derivation of employment income include:
– The place where the employment income is received (e.g. payment of salary made outside Malaysia)
– The location of the employer (e.g. the employer is not in Malaysia)
– The source of the employment income (e.g. the employment income is not received in Malaysia)
– The residence status of the employee (e.g. the employee is a non-resident)
Under what circumstances, the employment income derived from Malaysia would not be taxed in Malaysia?
– Employment income received is exempt under paragraph 21, schedule 6 if the employee is a non-resident and exercises employment for ≤60 days in a year in Malaysia.
– This exemption is not applicable to public entertainers unless part of the income is paid out of the public funds of the government of a country outside Malaysia and directors of resident companies.
Tax consulting is the core service of ANC Group. Our tax professionals provide clients with comprehensive tax support and guidance. We offer tax consulting and compliance services for expatriates, entrepreneurs, and listed and non-listed companies.
Our tax consulting services include business tax, transaction tax, personal tax, and corporate income tax. We don’t just guide you in interpreting and applying complicated taxation rules, but to explore new opportunities and business trends.
We keep you abreast with Malaysia tax updates and any changes in the local regulations.
We work closely with industry specialists, authorities, and associated professionals within ANC Group to provide the best-in-class integrated tax planning solutions. ANC specialists coordinate the accounting and taxation services to bring your business to success.