Very interesting... the way LHDN rules are way too gray indeed.

The part on
(f) gains or profits not falling under any of the foregoing
paragraphs.


could mean everything under the sun as long it isn't defined. There's a need for a clear definition of what is
long term vs short term holdings. What is considered taxable capital gains vs. non-taxable capital gains.

A big question is... HOW DO THEY KNOW? Does the broker issued all trade transactions to LHDN and to you at the end of the tax year?
What is this "large enough amount" from trading income means? 1K/month? 5K/month? 10K/month?

Or is this a honor system, or don't ask don't tell?

I'm curious to know too.

This post has been edited by danmooncake: Nov 6 2019, 04:51 AM

Malaysia tax law favor the rich...

Looks like the rich can earn 5~6 figures income per year from dividends/interests
no need to pay any tax but the salary working person who earns the same 5-6 figures amount
per year have to pay income tax.

Also, depends on which level too and lifestyle that one chooses.

Malaysia current household income divided into 3 levels:

T20 ~ RM 12500/month
M40 ~ RM 6250/month
B40 ~ RM 3000/month


Let say if one can get an investment dividends+interests yields avg 10% or more, matching those one of those income level,
over long term (tax free but not risk free: stocks, unit trusts, funds). Initial savings and investment target needed would be:

T20 ~ RM 1.5 mil
M40 ~ RM 750K
B40 ~ RM 360K


For safer and virtually risk free, generate very conservative average:5% (eg. EPF, CDs, ASNs, Sukuks, Bonds)
over long term, initial investment and savings target needed:
T20 ~ RM 3 mil
M40 ~ RM 1.5 mil
B40 ~ RM 720K

Of course, it doesn't factor inflation and so forth in the coming years as those numbers will change over time but
hey... tax free passive income is pretty good.

Well, also let's hope the tax laws does not change or raise any red flags otherwise LHDN also want their share.

This post has been edited by danmooncake: Nov 8 2019, 12:32 AM

A lot of PH legislatures also quite rich, in the T20 groups and have side income from investments.
They talk only but won't support more taxes because of self-preservation.

In Malaysia the rich, don't have to work, can get tax-free money from investments.
The poor - have to work but also not earn enough to pay taxes.

The groups suffer the most is the M40.. have to work and have to pay taxes to support the entire country.