DOING BUSINESS IN MALAYSIA

Posted By Romain Ponsot on Oct 6, 1907 in Doing Business


Date de publication : 06-10-1907

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The following information are for the sole purpose  of providing a general overview of  the local taxation of the Corporate tax aspects of the country. In any case, it can not replace a tax advice, or be considered as an official information.

 

Yes we tax in Malaysia

 

Flash News

New tax reform: No specific information

New tax treaties:

  • Tax treaty between Malaysia and Maldives is under negotiation.

Local tax advisors

No specific information on the local tax advisors.

Local tax administration

Website Tax administration: Click here

Permanent Establishment

There is no definition of Permanent Establishment in Malaysia.

Entities are considered to be resident for tax purposes in Malaysia if their place of management & control is in Malaysia.

Note: the definitions of permanent establishment and place of residence are subject to the relevant provisions of any applicable double tax treaty, if any.

Corporate Income Tax

The general CIT tax rate is 24%.

Non-taxable income includes the following:

  • Profits from a permanent establishment abroad

Carry forward: Yes, but some restrictions may apply

Carry back: No

Companies should submit the tax return annually.

Companies shall pay monthly advance payments.

Whithholding Taxes (payment to foreign companies)

The local tax rates in Malaysia are the following, subject to the provisions of an applicable double tax treaty, if any.

There is no WHT on the profits paid from a branch to its foreign head office.

The general rate of WHT on dividends is 0%.

The general rate of WHT on interest paid or credited is 15%.

The general rate of WHT on Royalties is 10%.

The general rate of WHT on management fees is 10%.

The general rate of WHT on technical services is 10%.

Capital gains

Capital gains are generally not taxed, except for the capital gain deriving from the sale of real estate, which is subject to a special real estate capital gain.

GST

Standard GST tax rate is 6%

Zero-rated supplies include, subject to certain conditions:

  • exports of goods;
  • Essential items (rice, sugar, flour,…) ;
  • Newspaper and magazines;
  • Medical items;
  • Goods supplied to custom free zones;
  • Certain exported services ;

Exempt supplies include, subject to certain conditions:

  • Certain financial services ;
  • Transport services;

Note: exempt transactions differ from zero-rated transactions in that the input GST associated with exempt transactions is not deductible.

Certain non-resident companies (which are not required to register and incur Malaysian-GST in the course of their business activities in Malaysia) may apply for a refund.

No other specific information of GST in Malaysia.

Miscellaneous

The general statute of limitation is 6 years starting at the end of the year in which the tax return had to be filed.

There is no foreign exchange control in Malaysia. Income and capital can be freely repatriated.

There are no thin capitalization rules in Malaysia.

 

 

 

Do not hesitate to share your experience in Malaysia with us in the comments below. Any comments are welcome !

 

Romain Ponsot

Romain est conseiller en fiscalité au sein d’un leader mondial du shipping. Grâce à son expertise tant en matière de TVA, fiscalité internationale, problématiques intragroupe qu’en matière de fiscalité des particuliers, Romain vous guidera au travers d’articles professionnels et humoristiques. 

Romain, poète dans l’âme, aime particulièrement le couscous et passe beaucoup de temps à glacer ses souliers. Profil LinkedIn
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