Strange why I can access the link ...

anyway, try this : https://www.parlimen.gov.my/bills-dewan-rak...web=dr&lang=en#

and check the 1st one in the table.

https://assets.kpmg/content/dam/kpmg/my/pdf...-highlights.pdf

The cat is pretty much out of the bag... active or passive income all kena tax :-(

This post has been edited by Vector88: Nov 11 2021, 01:43 PM

Page 5, bullet 1

Strange, on mobile, can copy amd paste:

here it is....

Under existing law, it is provided that any person who derives and remits foreign source
income into Malaysia enjoys exemption from income tax. However, this exemption does not
apply to a bank, insurance company, shipping company or airline which is a Malaysian resident.
It is now proposed that foreign source income is to be subject to tax on any Malaysian resident
person when such income is received in Malaysia, effective from 1 January 2022. This foreign
source income will effectively be added onto the taxpayer’s other sources of income and will
be taxed at the prevailing tax rates. A transitional tax rate of 3% is accorded on the gross
amount remitted from 1 January 2022 to 30 June 2022.
In view of the above, taxpayers with significant amounts of unremitted foreign source income
accrued in earlier YAs should start assessing the tax impact if the said amounts are remitted
into Malaysia from 1 January 2022 onwards.
In addition, the proposal effectively covers the taxation of all income, both passively and
actively derived. In this respect, taxpayers need to study the relevant DTAs, if any, to ascertain
whether Malaysia has the taxing rights over such income as DTAs prevail over the domestic
law. Where the same foreign income is being taxed in both Malaysia and the foreign country,
tax credit in the form of bilateral relief under a DTA or unilateral relief under the domestic law (if
there is no available DTA or a limited DTA does not contain such relief article) may be given on
such income to eliminate / minimise double taxation

It is noteworthy that certain DTAs provide that the tax credit shall take into account the foreign
tax payable by the foreign company in respect of its income out of which the dividend is paid
("underlying tax credit"), if the conditions are met. However, this poses practical issues in
calculating the underlying tax credit especially on multiple tier dividend paying companies,
which we hope the IRB will in the near future provide some guidance.
The above proposal comes into operation on 1 January 2022.

think after 1st July, will be taxed under individual income tax bracket, no?

This foreign source income will effectively be added onto the taxpayer’s other sources of income and will be taxed at the prevailing tax rates.

This post has been edited by Vector88: Nov 11 2021, 06:13 PM

and never bring it back

Those malaysians bringing back CPF in Singapore to spend here will be taxed too ???

https://www.pwc.com/my/en/assets/publicatio...-2022-Part2.pdf

Similar findings from the finance bill 2021, with a little bit more clarity, this time from PWC, check out Page 6

Easiest thing to do now (for SG reits investors not using foreign broker + foreign bank account currently) is to SELL all your REITs before 31st Dec, then transfer the money to SG account and invest via foreign broker, and never bring your money back :-)

If u have a SG account, u should have a Debit card, right ? There you go.... (no need to bring money back :-))

Don't think so ... u need to sell and buy again

0.7% is one time pain, paying tax on the dividend remitted back is a continuous pain
btw, doing the math your example above:

option 1 : 0.7% on 1M market value = 7k MYR ONE TIME

option 2 : 1M x 6% dividend every year = 60K MYR remitted back and got slapped with say 10% income tax, it is 6K PER ANNUM

This post has been edited by Vector88: Nov 12 2021, 05:56 PM

https://www2.deloitte.com/content/dam/Deloi...022-Part-II.pdf

Deloitte edition :-)


Tax on foreign sourced income (FSI) received in Malaysia
Currently, Malaysia adopts a territorial based taxation system where only income accruing in or derived from
Malaysia would be subject to Malaysian income tax. Income derived from sources outside Malaysia and received in
Malaysia is exempted from tax. The exceptions are resident companies in the business of banking, insurance or sea
or air transport which are taxed on worldwide income.
Proposal
It is proposed that the tax exemption on FSI would only be restricted to non-Malaysian residents.
As a transition, it is proposed that the FSI received in Malaysia from 1 January 2022 until 30 June 2022 will be
taxed at 3% on a gross basis. The FSI received in Malaysia from 1 July 2022 onwards would be subject to tax, based
on the prevailing income tax rate.
Effective: 1 January 2022
Our commentary:
Given the recent inclusion of Malaysia in the European Union (EU) grey list where Malaysia’s territorial sourced tax
regime is considered harmful, this proposal in Budget 2022 is not a total surprise. However, since EU is concerned
only where such regimes create situations of double non-taxation, income such as dividend would not be a concern
as it would not rank for a deduction. That being said, the Finance Bill 2021 seems to cover all kinds of FSI, including
foreign dividends received in Malaysia.
Impact on companies
Dividends received in Malaysia by Malaysian resident companies from foreign subsidiaries would be taxed in
Malaysia with effect from 1 January 2022. Foreign dividend withholding tax suffered would be creditable against
Malaysian tax payable. Certain tax treaties allow foreign tax paid by subsidiary companies in respect of their
income out of which dividends are paid to be part of the credit. Another common situation would be the interest
from money lent to borrowers outside Malaysia, including intra-group lending, would also be taxed upon
remittance moving forward. Remittance of profits of operations outside Malaysia, notably branch profits, would
also be subject to Malaysian tax after taking into account the foreign tax paid. All-in-all, additional top-up tax
would occur where Malaysian tax is higher than the foreign taxes.
Impact on the man-on-the-street
One common situation would be the rental income earned by a Malaysian tax resident from a real property located
outside of Malaysia – in this scenario, say Singapore. This income is an FSI and would not be taxed in Malaysia
presently. From 1 January 2022 next year, income remitted to Malaysia would be taxed. In this case, both countries
have the right to tax. To avoid double taxation on the same rental, Malaysia, being the country of residence would
grant a foreign tax credit based on a prescribed formula that takes into account the taxes paid in Singapore,
against the Malaysian tax payable. However, the Malaysian resident landlord would still need to pay the net tax to
the Malaysian Government.
Special Commentary on the Removal of the Exemption on
Foreign Source Income
Another common situation would be a Malaysian who lives in Johor Bahru and commutes daily to Singapore for
work. He draws a salary from his Singaporean employer. Under the tie-breaker rule, he would be a Malaysian tax
resident given that his permanent home is in Johor Bahru. Before 1 January 2022, he can remit his salary into
Malaysia without paying Malaysian tax. Under the new rule, his remittance would be subject to Malaysian tax. The
Singapore tax paid can be used as a set off. However, he would need to top up the net additional tax and pay the
Malaysian tax authorities. In short, there would be an incremental tax.
The meaning of “received”
What does the word “received” mean? FSI that is not received in Malaysia will not be taxed. While a guidance is
expected to be issued, generally FSI would be considered to be received in Malaysia when the income is remitted to,
transmitted to, or brought into Malaysia. If the relevant funds are transferred to a Malaysian bank account or
brought into Malaysia in the form of a cheque, money order or cash, it would satisfy this criterion.
Plan ahead
An immediate course of action would be to identify any FSI (which may not have been given much attention before
this), timing of their receipt and the quantum of any incremental tax liability after factoring in the availability of
any tax credits. This is especially important for companies with a December 31 financial year end since the deadline
for submitting their estimate of tax payable for year of assessment 2022 is close. Moving forward, businesses
would also have to consider the potential tax impact when planning the timing of repatriation of their FSI to meet
their commercial requirements locally.
Points for consideration
We remain hopeful that certain income such as foreign-sourced dividends, foreign branch profits and foreignsourced service income would continue to be exempt. Many countries do not tax inbound dividends under their
participation exemption rules. If alignment with best international practice is key, focus should be placed on
passive income that creates tax arbitrage such as interest and royalty. On the enhancement of tax collection, a
wide inclusion of all types of FSI may work in the short-run, but the long-term implication on Malaysia’s
competitiveness needs to be considered.

This post has been edited by Vector88: Nov 12 2021, 08:57 PM

MYR underperfomed badly during 1MDB scandal, where it went from 2.5 to 3 ...pre and post that, it has been more stable against SGD.

This post has been edited by Vector88: Nov 13 2021, 07:43 AM

repost here since it is relevant to SG Reit investors:


https://www.malaymail.com/news/malaysia/202...sidents/2021425

it says:

“If the review found that the income kept abroad originating from Malaysia has not been reported, additional assessment can be imposed together with penalties in accordance with the provisions of the Income Tax Act 1967,” it said.

meaning if u keep ur money overseas and NOT remiited back to Malaysia (though it was originating from Malaysia), it can be taxed ??!!!

This post has been edited by Vector88: Nov 17 2021, 08:54 AM

https://www.malaymail.com/news/malaysia/202...sidents/2021425

I think they may collaborate with overseas tax authority.

After the expiration of the period, IRB will review and examine the income information of Malaysian residents deposited abroad that has been received through tax information exchange agreements with other countries.

This post has been edited by Vector88: Nov 17 2021, 08:59 AM

So means cannot escape LHDN eyes if u have a SG account with regular dividend payout to that account?

I have the same worry

One thing caught my attention, the aggregate leverage is only 27.9%?? so low??