Am not sure if that is the case, might be better to ask a tax accountant. But there are appeal cases against LHDN's decision on this:
https://chengco.com.my/wp/2018/03/16/local-...foreign-income/ , so generally, if the tax accountant is confident that you shouldnt be taxed, then it's your call.

Yes, you need to.

Yes u need to ..regardless where u work from ...as long as u r tax resident of malaysia by definition ..183 days ..different scenario from those worked full time e.g. in sg

What if I work from home in Malaysia. But I receive my income on PayPal and in USD. Is it only taxed when I withdraw it into my Malaysian bank account and convert it to MYR? Or is it taxable even before it enters my Maybank account?

How does lhdn knows how much does your overseas employers pays you for your work gone in malaysia, so that they can tax that money?

Tax applied on remitted fund and only when u do efiling lo

Could they like maybe ask to look into my PayPal account or request it from PayPal directly?

Sorry, I don't quite understand.

If they can manage to ask paypal for that info, then How does they differentiate what transaction amount are actually your undeclared income? The money in PayPal can be from many sources n for many purposes

Income this year, you submit tax filing next year, then only you pay tax if need to pay after efiling done

Mum,... you are not supposed to ask that question,...

He is supposed to declare sincerely,....

Lhdn for now work on trust ...

Meaning end of the year, u declare, u pay

So if u dun have to pay pcb e.g. freelance, nontaxable etc, then lhdn wont have your record.

In ur case, even if u withdraw or dont withdraw into ur my bnk acccnt, they wont know until you file ur income tax. Thats y irregardless where you work, how u receive your money is irrelevant if u dun declare

Your paypal they wont know, transfer to ur acc also they wont know, if figure is small its okk...if figure is huge, just declare ...it will trigger AMLA and lhdn will be informed too...

However when they found out, you will be slap with fine + tax arrear for under reporting/misreporting/tax evasioon

Let's say I receive $1k usd on PayPal. I withdraw $500 into my Maybank account, converted to MYR. The other $500 I use to buy stocks/crypto/gold directly from PayPal without converting to MYR or bringing it into Maybank. Do I declare $500 income at the end of the year or $1000?

according to the previously published FAQs on the previously was to enforced FSI tax regime starting Jan 2021...(now extended FSI waiver till end 2026)

This post has been edited by MUM: Jan 5 2022, 02:14 PM


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Generally speaking, the income ($1k USD in this case) is always declared for the same year you received it.
You have already received the income so you are subject to tax at that point in time. Not at the point in time when you choose to spend or "convert" or remit it back to Malaysia bank.

Why are all the discussion for foreign income still going on seeing that there is no change from before for individuals?

That Foreign income for individuals will not be subjected to tax till 2026.

Generally speaking, if you are a resident of a country that has income tax rules, you have to pay tax on the taxable income whether or not it enters your local bank or foreign bank or paypal or bitcoin or etc.

If you rent your house and ask tenant to pay via paypal in USD, or bitcoin, doesn't mean you escape from have to pay tax...

But.. whether you choose to declare or not, is a different story. As they say about death and taxes......

Tax on foreign funds remittance has a slightly different objective.
For example, someone working in Singapore and already paid SG tax, is then subject to additional tax if bringing those SGD savings back to Malaysia one day if they retire and leave SG for good. Edit : this is the one that has been postponed to 2026 implementation

This post has been edited by frost99: Jan 5 2022, 03:01 PM

Do you happen to know what type of form I need to fill up to declare the income comes from oversea? In simple word, how to declare? Let's say I am a Malaysian, working in Malaysia with a foreign company and getting paid in foreign currency. The foreign company is not in Malaysia.

i could be wrong,...but i found these in google...

INCOME EXEMPT FROM TAXES –
INDIVIDUALS
20. Remittance of foreign source income to Malaysia
Income arising from sources outside Malaysia and received in Malaysia by any person who is not resident in Malaysia (Sch 6 Para 28).
Effective Y/A 2004, exemption on foreign source income is extended to include a resident individual,
a trust body, a co-operative and a Hindu joint family [Sch 6 Para 28(1)].
https://www.mia.org.my/v2/downloads/resourc.../2017/B/B16.pdf

How To File Your Income Tax As A Freelancer
Note: Income earned from foreign companies, in other words, businesses that are not based or registered in Malaysia, are exempted from tax, as of YA 2004.
https://www.comparehero.my/budgets-tax/arti...ncer-income-tax

Personal taxation:
Basis - Individuals are taxed on income derived in Malaysia. Foreign sourced income is exempt in Malaysia.
https://www2.deloitte.com/content/dam/Deloi...tax-en-2017.pdf

This post has been edited by MUM: Jan 5 2022, 06:48 PM

My tax knowledge is quite rusty by now. But when the work is done in Msia by a Msian tax resident, the income generated is definitely taxable in Msia. In terms of the structuring of the contract between you and your employer/client, you should consult tax consultants as the tax implication can be complex, not just for you but also for the entity you are providing service to.

My understanding is, generally people will set up a business (sole proprietor/LLP/Sdn Bhd) and have a contract with the foreign company, your expenses directly attributable to doing the work can be tax deductible as a result. someone told me something about resulting in permanent establishment of the foreign company if they hire a msian as employee in Msia, and therefore a contractor arrangement with a business is preferred. But like i say, consult a tax consultant to make sure you don't get into any type of trouble


Now, why should you declare? Well, tax evasion is an offense, you can get into lots of hassle and trouble if you don't do it right.
If this is a full time job and your main/sole income source, how can you justify your assets acquisition (think house, car, maybe shares too), IRB can pick it up and send your query and ask you to provide evidence of source of funds
Even if you don't bring the money back, with the TIN requirements that foreign banks are required to provide info the tax authorities, you might still get caught. Of course, that's if the amount is sizable.
If we are talking about small amount and you don't bring it back, then probably IRB won't be able to catch you

You would fill in Form B for income from business source if you use the method I suggest above.

Technically, the whole amount is taxable as the service is rendered in Msia