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Tax for one year visa

Hi,

I want to ask for the tax in this case:

My contract and expat visa is 1 year which means I am resident of Malaysia, however I joined between July 2017 to July 2018 which means I stayed less than 182 days in this year and another less than 182 days next year. How can I pay the tax?

I asked my company, they told me that since it is already half of year and less than 32400RM so I wont be charged by tax. But I read that foreigner who lives less than 182 within the year will be charged 28% tax. Then what kind of tax I will pay for this year and next year? The residential tax or non resident?

Thanks

There is a minimum salary where no tax is due. Is that what your employer is saying to you?

Read this under "Register" http://lampiran2.hasil.gov.my/pdf/pdfam/01_2017_2.pdf

Hi Gravitas, That is what my company told me, if calculated from July to December 2017, I dont need to pay any tax since it is less than 34000RM.

But what I don't understand is... for my status of visa, do I need to pay any tax rate 28% because I stayed less than 182 days in this year?

Kim. Your annual salary is lower than RM34,001 per year. Therefore you NEVER pay tax.

"Annual" means January to December in Malaysia.

Check out the link I posted earlier for confirmation. It comes from the tax authority in Malaysia.

To explain another way, you are tax resident (182 days in Malaysia) but you are not assessed for income tax because the amount of salary you earn per year is below the taxable threshold.

Your visa is possible because the company is paying you more than RM2500 per month, which is the minimum to qualify at the immigration department.

ah I get it now.

Thank you Gravitas, I also ask for my company's HR tomorrow for several confirmation too.

I just feel weird that I stay for one year with total salary in my current visa is more than 34000 RM but do not need to pay tax because I come to Malaysia for half of year and another half of next year (well unless I extend my contract to full of next year).

Even if you extend your contract - your annual salary (January to December = Tax Year) will always be under the level where paying tax starts.......

Gravitas :

Even if you extend your contract - your annual salary (January to December = Tax Year) will always be under the level where paying tax starts.......

In fact, at the beginning of January next year, I can renew the contract, then my salary from Jan to Dec 2018 will be above the tax payable level, then at this case, my income tax will be applied right?

But if I renew at the end of June/July then it is under the level. Is it true?

You said your contract was for one year from July 2017 to July 2018 - so if your contract was going to be renewed, it would happen in July 2018 (i.e. when the 1st year has finished).  You would not renew in January 2018.

In your contract of employment it shows your annual salary - RM32,400 (or monthly RM2700) - that is a fixed figure. It is below the figure where people start paying income tax.

So in fact your salary earned in tax year 2017 will be RM16,200 (July-Dec / 6x2700). It is the same for  tax year 2018 up until the end of your contract  (Jan-Jun / 6x2700) .

If you get a contract renewal in July 2018 and they give you a salary increase which makes your annual salary more than RM34,000 then your company would have to register you at the tax office. I sent you a link earlier showing you all about when registration was necessary.

Just so you know, all employees have to complete a tax form in March 2018 where you give details of your total earnings during tax year 2017 (Jan-Dec). What that means is the employee is responsible for confirming their earnings each tax year.

Be happy you are not paying tax !!

thank you Gravitas. Actually they offer me much higher than that but well, I guess I will enjoy this life without tax from now on.

I pay 28 % in taxes for 6 months, then 22 for the ramaining 6 months and I have the one year visa....it's the company for which you work that declares it. You'll never see that money ha ha

Victoria Schaal :

I pay 28 % in taxes for 6 months, then 22 for the ramaining 6 months and I have the one year visa....it's the company for which you work that declares it. You'll never see that money ha ha

I gotta ask my company about that, since they do not say anything except that I do not need to pay tax, all the visa and payment my company paid for me (They said around 2000+ RM), but I check the fee of visa is not much (since my company apply directly not through any agent, I think may be this payment is included 28% tax)

It has nothing to do with the visa. Either you have a super low salary under 2000 or you gotta pay taxes. It's quite logical.

When the income tax return is submitted in about Feb/Mar 2018 and they see a person qualified as being tax resident over the whole of 2017 (i.e. 182 days in 365) the tax will also be worked out across the whole year and a refund could be due?  Otherwise at the time of leaving the tax office will process the submissions and work out the tax situation. Also the tax steps are graduated once tax resident. So the salary is taxed in strata (worked out on the annual salary). The percentage due in each strata is added together to show full tax burden (less personal allowance). Dividing this by 12 will show the monthly deduction.

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