Taxable Income

Information about taxable income, global taxation and tax rates in Malaysia...

The Inland Revenue Board of Malaysia (IRBM) manages income tax in the country. Income tax must be paid on income earned in, derived from or remitted to Malaysia. Income derived from outside Malaysia is not subject to income tax in the country.

The following income is taxable:

  • Salaries
  • Profits or gains from business, trades or professions
  • Dividend profits or gains
  • Interest
  • Rent
  • Royalties or premiums
  • Pensions
  • Annuities, periodic payments and other profits or income not listed

An individual's total taxable income is the amount earned once any expenses incurred exclusively in the production of the income have been accounted for. Residents in Malaysia are liable to pay income tax at a rate between two percent and 30 percent. People who earn less than a defined salary do not pay income tax.

Paying income tax

Anyone who is liable to pay income tax in Malaysia must declare their income to the Inland Revenue Board of Malaysia, or IRBM. An Income Tax Return Form (ITRF) must be completed and returned to the IRBM by 30 April each year. On this form, the taxpayer should declare income received during the previous calendar year. This self-assessment is done on top of monthly tax deductions made from salaries at source. Any shortfall between tax liability and monthly payments already made must be paid; in the case of overpayment, a refund is given.

Tax forms can be downloaded from the IRBM website.

 

Disclaimer

Any statements concerning taxation are based upon our understanding of current taxation laws and practices in Malaysia which are subject to change. While every effort has been made to offer information that is current, correct and clearly expressed the publisher is not responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. Readers are encouraged to seek professional advice concerning specific matters before making any decision.