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.

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