KUALA LUMPUR, Nov 16 — The Inland Revenue Board (IRB) is offering a Special Income Remittance Programme (PKPP) to Malaysian residents who have income deposited abroad.

The agency said this is in line with the abolishment of tax exemption on foreign-sourced income, which was announced by Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz when tabling Budget 2022.

“The programme will be implemented from January 1 to June 30, 2022, during which a gross tax rate of three per cent will be imposed on income repatriated back as proposed under the Finance Bill 2021

“There will be no audit review, investigation or penalty on income brought in during the PKPP period; all income brought in will be received in good faith by IRB,” it said in a statement today.

IRB said other criteria include the income must be brought in or remitted within the PKPP period and taxpayers must make a declaration to participate in PKPP at the latest within 30 days after the expiry of the period.

Besides that, it said, tax payment must be made in accordance with the normal payment order prescribed for the year of assessment 2022 or 2023, whichever is applicable.

The programme does not cover income derived from Malaysia which is subject to tax for the year of assessment 2021 and subsequent years of assessment and remitted or brought back in the period of PKPP.

“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.

“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.

Therefore, IRB said taxpayers are encouraged to participate in this special programme in order to update their tax position.

It added that it would issue a list of frequently asked questions and guidelines related to PKPP to the public which could be found at IRB’s official portal. — Bernama

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

mentioned: income repatriated back,...what about capital or income with capital + capital gained over the years? how to separate it out?

burden of proof is on you... if cannot proof, TAX!!! and FINE!!!

Just curious, did you ask them about funds like ASNB, EPF or mutual funds that invest overseas? What kind of tax treatments are given to their foreign dividends/interests etc. ?

not sure if this is relevant,...
from post 167,

excerpt,
The repeal of this exemption could have significant implications on the post-tax returns of investment vehicles in Malaysia that have built up a portfolio in non-Malaysian securities and instruments.

Where these investments currently provided tax exempt income in the form of foreign interest, coupon, and dividends; moving forward, this income would be taxable at 24% effective from Jan 1, 2022.

In the short term, this means a 24% haircut on the investment returns of these vehicles will be borne by the investors when the profits are distributed.
https://www.thestar.com.my/business/busines...ment-management

maybe and hopefully,...those Govt linked entities will have special treatment

Yes, based on what I learnt this morning, you are right. Capital gains are not taxable at the moment.

Not all monies remitted or repatriated shall be taxable, only the income (revenue in nature) not gains (capital in nature).

That's why it is very important to keep all your documentations and proper record so you can explain clearly if being audited.

so yes, income (revenue in nature) shall be taxable and gains (capital in nature) shall not be taxable, based on my knowledge now.

the same shall be taxed on these entities too (some other participants also brought this up), so in a way, our income from EPF would also be taxed at certain level.

however, like what MUM mentioned earlier, those special entities would have some special exemptions, it wasn't very clear still, they are waiting for the MOF to clarify as well.

So yes, on personal level, if your mutual funds distribute dividends, it shall be taxable because it is revenue in nature.

This post has been edited by tehoice: Nov 18 2021, 02:36 PM

... old foreign income from few years back... hence the problem if taken literally it is taxable

Maybe can hold 7 years until the statue runs out and remit...

Bro,...

Think I'll reply to your curiosity here first. After reading that article a few times and discussing with my pals today,... that article is meant more for companies that derive foreign income from their overseas customers and clients. The goods and services 'sold' to those overseas customers were 'produced' in Msia.

But when payment is made,... the funds were 'parked' in overseas accounts,...

IRB going after these companies now.

Wanting to thank Tehoice here for the good updates shared with us from his seminar,....

Bros,... I think IRB has a lot of work to do after this. I honestly doubt the tax officer will chk all our documents to justify whether to grant exemption or not.

Thanks @tehoice, a little clearer now.

1) Capital gain not taxable
2) dividend taxable
3) If both forever not remitted back to MY, then not taxable, correct ar ?

while waiting for responses,... you can try
read post 165, page 9

Emm,... based on the latest article of subject published in Malay Mail yesterday, if the income of the company concerned 'berpunca dari Msia', you have to report it. But there is NO mention that you must remit it back to Msia.

The above income will be assessed accordingly, in good faith between Jan to July 2022, and with additional assessment and penalty after that, but again, there is no mention whether the company is compelled to transmit back the funds to Msia.

Assessment will prepare the amt that needed toi be taxed,... BUT the issue here is the point of taxation is ONLY upon remittance back to Msia. Assessing and actually collecting tax are two different things.

So,.. in principle, your No 3) statement is right !

Yea, i think it is also a good way to mitigate this, tax planning is important.
But i think it's also very important to keep the proper documentations and record, just in case if you need to repatriate it back.

No worries, just sharing what I learnt.

Actually one of the main reasons why they want to do this is also to:

"Serve as a revenue-raising measure for the government and in response to European Union's recent inclusion of Malaysia in the "Grey List" (just early October 2021).


Based on my understanding, yes.

Interest income is also taxable yea.

HK also grey-listed, but it didn't bow to the EU and retains its tax structure. Seems like MY has no bargaining power.

Of course. HK got big brother China behind them. Malaysia got who? Lol. Even the palm oil boycott also cannot fight.

HK has big tai kor China to take care,...M'sia has who?

haha okay, let me share with you what's their views on HK, and what HK is doing in trying to uplift themselves from the grey list.

HK's response to being added to the grey list:
1. Continue to adopt the territorial source principle.
2. Legislative amendments to target corporations with no substantial economic activity.
3. Individual taxpayers will not be affected.

Credit: one of the big fours.

Edit: So essentially, we can't really say that HK is not doing anything in response to this also.

This post has been edited by tehoice: Nov 18 2021, 06:07 PM

Oh they did something. At least they individual taxpayers are not affected. Shell companies and trusts with obscure identities are common here.

Budget 2022 passed.

https://www.thestar.com.my/news/nation/2021...-via-voice-vote