May I add that there's some minor correction to be made to your statement. The statement "Only income received in Malaysia but derived outside Malaysia is tax-exempt" is not necessarily true in all cases. If the employer is a Malaysian company and sends the Malaysian employee to a Korean company (secondment) for work purposes eg: 2 years, and the employer completely remunerates the employee, he would be subject to Malaysian tax. In this case, although income received in Malaysia but derived outside Malaysia, still, it is taxable. Hence, your statement is not quite right.

Alternatively, if the Malaysian employer sends the employee to Korea to work closely with a Korean company, and the secondment agreement is such that the employee shall be remunerated by the Korean company for the 2 years, then the scenario is that the work done overseas is for the Korean company. This will constitute income received in Malaysia but derived outside Malaysia.

In a nutshell, two conditions to fulfill the criteria: 1) Employee shall not perform work in Malaysia & 2) The Employer shall not be Malaysian employer (if the employer is any foreign companies based in Malaysia, this automatically means Malaysian company)

Well, I'm afraid it is not to confuse people. It is the law, and the responsibility lies on the individual to research the laws of the land in detail and plan the "arrangements" accordingly to safeguard oneself from taxation.

I'm attaching a Malaysian employee secondment to overseas scenario. You may want to read it at your leisure.  Secondment_of_Malaysian_employees_to_Overseas.pdf ( 554.7k ) Number of downloads: 57

I wish I could upload more such documents, but it do consume considerable amount of time. A good way for anyone would be to start some searching on LHDN website.

Appreciated on your intention to educate the layman. Along those same lines, my only intention was to add more value to your statement, whereby those layman may take your statement as a blanket guideline, whereas, in practice, it depends on multitude of complex scenarios which are already outlined by LHDN.

However, if the layman tries to arrange himself/herself to fulfill both rules of:-

Rule 1) He/she perform work outside Malaysia &
Rule 2) His/Her employer shall be Foreign employer (if the employer is any foreign companies based in Malaysia, this automatically means Malaysian employer)

If both the above rules are met, the layman can rest assured that all the complex scenarios outlined by LHDN shall not apply and his/her foreign income shall be tax-exempt.

Having said the above, I do appreciate what you've enlightened them.