Found the necromancer! *Pull out pitchfork*

Source (1): LHDN: https://phl.hasil.gov.my/pdf/pdfam/PR_12_2019.pdf

Source (2): https://www.thesundaily.my/business/is-fore...xable-HF7986977

If individuals are managing their business or carrying out the business of investments overseas from a base in Malaysia and most activities in connection with the purchase and sale or the business decisions needed to run the overseas operations are undertaken in Malaysia, income from such activities, although earned overseas, will be treated as domestic source and taxed in Malaysia. The reason for taxing such income in Malaysia is because the key activities giving rise to the generation of that income is based in Malaysia.

Another thing I want to point out is this. In Malaysia, cash-basis accounting is not allowed when it comes to tax-related calculations.
The rule is to use accrual accounting which means you have to file for tax based on your statement/invoice date.
This is true EVEN if you haven't remitted back the money.
See Source(1) for official examples from LHDN.

I can tell you the biztory post is 100% wrong.

There is A LOT of confusion regarding "foreign income."

Foreign Income has a SPECIFIC definition. Not ALL money you make from abroad is considered Foreign Income.
The KEY is the LOCATION where substantial economic activities are performed.

Examples of Foreign Income
1. You live in Johor, commute to work in Singapore daily (pay taxes in Singapore instead)
2. You're a Malaysian YouTuber, you live and make videos in Tokyo that generate revenue from ads. (pay taxes in Japan instead)
3. You found a job in Australia after graduating in 2015 and worked there until 2019. The salary is foreign income. (pay taxes in Australia)
4. You're a freelance graphic designer. Your client from the US paid you to work at their US office for x months. (pay taxes in US)

NOT FOREIGN INCOME:-
1. You live in Johor, you travel daily to wholesale nasi lemak to someone in Singapore.
2. You're a Malaysian YouTuber, you live and make videos in Perlis that generate revenue in USD.
3. You found a job in Australia, but you work remotely from your home office in Sabah. You're paid in AUD. It's NOT foreign income.
4. You're a freelance graphic designer. You're based KL, but your clients are from the US.

For your freelance work, I'm certain that it's not considered "Foreign Income." Since you said you're in Malaysia.

For your affiliate marketing biz, I guess it depends. If you don't actively work on it, and the whole website, server, etc. are all overseas. I guess it can be considered "foreign income."?

However, say you work on it actively from Malaysia, doing things like adding content, maintenance, paying bills, advertising, marketing, etc--I would say it's not considered "foreign income."

Your safest bet is to ask an accountant OR call LHDN directly.

Yes, please ask them.

Check out Example 2 in this article: https://www.theedgemarkets.com/article/taxp...axable-malaysia

Yes, it's very clear. That's why I shared it.

Anyway, I think there's some misunderstanding here.

I was pointing out that this particular point from the Biztory article is wrong:-

"For freelancers, earning revenue from foreign companies (not based or registered in Malaysia) is not uncommon. Here’s some good news, income earned from outside Malaysia is excluded from tax as of YA 2004."

This post has been edited by iammyself: Oct 31 2021, 12:17 AM

For freelancers based in Malaysia, revenue from foreign companies is not considered "foreign source income"...

It's considered locally derived. As such, it's taxable..... in MY.

Recall from the Ahmad's orchard example that "The net proceeds from the sale of the fruits on consignment to the Singapore fruit trader are derived from Malaysia as the fruits are produced in an orchard in Malaysia."

Freelancer = Ahmad
Freelancer's office = orchard
Service performed = fruit

This post has been edited by iammyself: Oct 31 2021, 12:31 AM