Thanks! I needed this info! But I got additional questions.
The situation is this: I work in software development from home. The company who hired me does not have a branch here and they pay me directly from their company based in London through Paypal. We communicate through the internet.

So based on your reasoning, I would still need to pay income tax because even though the physical location of the company I work with is in London, during my working hours I am still here in Malaysia. The keyword being "derived from Malaysia" means "when you were working you were physically here in Malaysia", correct?

My question is this, if my company was already deducting my pay for taxes in London, wouldn't that mean I am being double taxed? Or is there a clause somewhere that says if I'm being taxed in London I won't have to be taxed here?


This post has been edited by JaggedEdge: Feb 25 2016, 05:02 PM

I just asked because someone told me that if my income was taxed at its source (the company), I won't have to pay income tax for it again here.

My current arrangement with them is they pay me the full amount. Taxes wasn't included in that discussion. I was thinking if this was the case I would ask them to tax me there instead since I might be in a lower tax bracket.


Edit: Also, theoretically, if say I was somehow working and living and paying taxes overseas and then came back Malaysia and continued working with that company here, what happens then?

This post has been edited by JaggedEdge: Feb 25 2016, 05:57 PM

You're right. I just checked and the tax rate there is 20% for 0 to 30k a year. There goes that idea