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 tax on foreign income?

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h0lycha0s
post Aug 31 2017, 04:29 AM

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QUOTE(Forum-Modding Newb @ Apr 6 2016, 12:56 AM)
This thread is really helpful!

I'm in a rather different situation. I'm a Malaysian but not in Malaysia, and by the tax definition I'm a "non-resident". I work in a foreign country and they pay me for my services, but I am curious to know this (in all cases, I work overseas)

Assumption A: I sign an individual work contract in this country with my employer, as an individual
1. If they pay me in this country, I pay personal tax here (which is more than 30%). That's obvious.

Assumption B: I sign a service contract between my sole proprietor company & my employer
2. I have a sole proprietor company registered in Malaysia. What happens tax-wise if my sole-prop company bills my foreign employer (in lieu of salary), invoice from Malaysia for services rendered outside of Malaysia? What tax do I pay?

Assumption C: I sign an individual work contract in Malaysia with my foreign employer, as an individual
3. Next scenario, what if my employer pays me as an individual for services rendered outside Malaysia, but the payment method is TT to a Malaysian bank account?

I understand that sole proprietorship means that I'm taxed as an individual. But I'm unable to find information what happens if I'm a non-resident, no one seems to know which category I'm in. Do help!
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I am currently in the same situation as her, except that in 24 days I will be a tax resident in Malaysia. If that's the case, what do I do with the income derived from a service exported to Italy and performed in Italy. ?

What if I am neither a tax resident of both Malaysia and Italy ? Will I be able to pick just one to pay tax to e.g Malaysia and claim that it's a foreign income and get exemption ? Does it work this way ?

Thanks for your input !
h0lycha0s
post Aug 31 2017, 01:57 PM

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QUOTE(cherroy @ Aug 31 2017, 11:47 AM)
You don't care whether the service is exported or not.
It is always depends where the income is derived.
You make a deal in Malaysia and delivered goods/services to overseas customer, it is still deemed income derived in Malaysia.
If not, all export company don't need to pay tax already. So the word "export" is irrelevant.

Non-tax resident still needs to pay tax one, as long as income is derived in Malaysia.
While for Italy, then you need to look on their specific ruling on non-tax resident, whether it will be charged as witholding tax or whatever.
http://www.hasil.gov.my/bt_goindex.php?bt_...sequ=1&bt_lgv=2
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Cherroy, thanks for the reply !Ah, you must be pretty frustrated with the recurring questions now bangwall.gif

Hear me out, income is not derived in Malaysia, which is why I wrote 'exported and performed' in Italy. I will stay until I am a tax resident here, but performing such service exported to Italy in Italy.


Looked at the Double Taxation Avoidance Agreement between ITA-MY, it only has paragraphs when I am both a resident or one of the resident of either countries.

It's my fault for not asking the question properly, I meant what if I am a non-resident for both countries or any countries, with foreign derived income, can I choose which country to file my tax under DTA ?
Perhaps I should look at the ruling on non-tax resident with the withholding tax thing.

Appreciate it Cherroy rclxms.gif

This post has been edited by h0lycha0s: Aug 31 2017, 02:00 PM

 

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