Based on our taxation system, Section 3 of ITA.



Your case applies.

Hence, taxable. Hope it helps.

This post has been edited by zhou.xingxing: Mar 19 2015, 12:15 PM

Any update on this?

Just curious to know. It seems that we still to declare and pay for the tax right?

Hi, I have a question. I work as a freelancer internationally as a digital nomad. I am a Malaysian citizen but haven't been back for years. I have a bank account in the Netherlands and my clients are from China, US and Turkey. All my income goes into the Dutch bank account .
I work as a freelance English teacher and would like to set up own teaching lessons.
To whom do I pay tax to?

How about if he is doing doorship sales and earn the differences and the clients all are located overseas?

This post has been edited by jack2: Mar 7 2017, 06:07 PM

Depends on your residency, ie which country you are spending the most in a year.

If mostly in MY, then declare MY tax although income come from foreign sources and deposit into foreign accounts.

if your primary residence is Netherlands, then declare Netherlands tax as per their tax code.

This post has been edited by gark: Mar 7 2017, 07:50 PM

Is he doing the dropship in Malaysia if yes, please declare income for MY taxes.

This post has been edited by gark: Mar 7 2017, 07:51 PM

No, all international clients...

Does not matter, as long as HE DO the dropship work based in Malaysia. Need to declare MY tax.

https://ringgitplus.com/en/blog/Career/How-...reelancing.html



So is this just bad info?

More or less is a confusing info

wah you are replying to a 4-yo post.

yeah... holy resurrection wth man...

anyways since this resurfaced... heads up...

was informed IRB going to remove the exemption on foreign sourced income... probably starting next year... they writing up the law now...

GSK & Associates, May 24, 2019

FOREIGN-SOURCED INCOME - MALAYSIAN INCOME TAX
Updated: Nov 17, 2020

Foreign-sourced income is NOT subject to tax in Malaysia, except for certain activities, such as banking, insurance, and air and sea transport operations.


References - Income Tax Act, 1967
Section 3 of the Income Tax Act, 1967 (ITA) states that “income shall be charged for the income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia”.
The phrase accruing in or derive from Malaysia means the source of income must be in Malaysia

With effect from YA 2004, foreign source income derived from sources outside Malaysia and received in Malaysia by any person is NOT subject to Malaysian income tax

Section 12 of the Income Tax Act, 1967 is about the determining the source of income or derivation of income

The tax exemption is stated in the Schedule 6, Paragraph 28 of the Income Tax Act, 1967 - click the link below for the PDF copy of the Schedule 6;

www.hasil.gov.my/pdf/pdfam/Schedule_6.pdf
http://phl.hasil.gov.my/pdf/pdfam/Schedule_6.pdf


How to determine income derived from Malaysia or Outside Malaysia (Foreign-Sourced)

Derivation of income is defined in Section 12 of the ITA.

Determining the source of income is indeed difficult and often open to discussion and also can be complex and contentious.
There is no exact guide that can be applied to every scenario to determine whether an income is Malaysian-sourced or foreign-sourced.
It depends on the nature of the income and of the business transactions which give rise to such income.


Generally, the income shall be deemed derived from outside Malaysia if the income is attributed directly to activities conducted outside Malaysia.
The burden is on the tax payer to prove that his income is foreign-sourced.


As per the Section 12(1)(a), gross income that is not attributable to operations of business carried on outside Malaysia would be deemed Malaysian derived income.


Therefore, if the gross income is related to the work performed outside Malaysia and the taxpayer wishes to treat it as foreign source income, the taxpayer would need to substantiate that it is attributable to operations of business carried on outside Malaysia.


General points to consider in determining source of income

Where does the contracts concluded - in Malaysia or Outside Malaysia?

Whether the ownership risk of the business is in Malaysia or Outside Malaysia

Whether services are rendered in Malaysia or Outside Malaysia


Briefly on Section 12 (1) & 12 (2):
more ....
https://www.gskassociates.net/post/foreign-...sian-income-tax

latest updates...
In the Budget 2022, it has been proposed that income tax be imposed on residents in Malaysia with income derived from foreign sources and received in Malaysia from Jan 1, 2022. in response to global developments such as the global minimum tax and the recent European Union’s action to include Malaysia in its “grey list”.
https://www.theedgemarkets.com/article/delo...crease-tax-bill


This post has been edited by MUM: Oct 30 2021, 08:19 PM

Found the necromancer! *Pull out pitchfork*

told y'all...

So Malaysian residents will be taxed on foreign sourced income remitted to Malaysia from 1 Jan 2022. How to get around this? I might go work overseas next year and most of salary will salary TT to my account here. Will I be considered Malaysian resident if I spend most of my days abroad? I know LHDN has few criteria to define Malaysian Tax resident. Is this same criteria to define Malaysian resident?

if you go out as expat... then you are not considered as Malaysia tax residence...

the transition year... say work 6 months in Malaysia, then move to country X... then you'll need to segregated and choose how you want to be taxed

if company send... they probably will provide tax agents to handle your taxes

Mum, this doesn't age well

https://www.theedgemarkets.com/article/delo...crease-tax-bill

Why on earth in budget, only now they say foreign income now taxable from January 2022? Dont tell me they only targeting those income overseas and living overseas.