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25% Tax for Residents that have lived in MY prior to obtaining EP?

Hey there,

I've been a resident in Malaysia for the past 9 years. I'm currently living here with my family and have been doing almost all of my education here in KL. Recently I've gotten my employment pass, tax # and all that. Now I have been told that I'm subjected to a 25% tax rate for the first six months (186 days) since I am not a tax resident, then pay the same rate as everyone else after that. However given that I have been living in malaysia prior to getting my employment pass, does that 25% rate still apply?

Any clarification is appreciated.

Thanks,
Nik

The rate is 28% for the first 182 days. Tax residency qualifying period only starts when actually liable for income tax.

For 2017 you cannot qualify the 182 days in the tax year (Jan-Dec), so you will need to qualify during 2018.

As long as you don't leave Malaysia for social purposes for more than 14 days for the rest of 2017 and during the first 182 days of 2018, then 2017/2018 will then be retroactively calculated at the tax-resident rates.

I think the OP's question is the same as mine.

I've been in Malaysia for 6 months (albeit on a social pass) and have been working online, not for a Malaysian-registered company.

I left when my last contract expired in October of 2015.  I was here for 5 years prior to that.

The wording of the tax states that the 28% is based on the first 182 days one is in Malaysia, not that one is working in Malaysia for 182 days.

I have found an employer here in Malaysia and will soon sign a contract of employment.

The wording doesn't say "employment" or even "resident" it says one must physically be in Malaysia for 182 days.

I fit that requirement.  So will I be taxed at 28% or the normal rate?

Page 6 explains - https://www.pwc.com/my/en/assets/public … ooklet.pdf

Last two bullet point will apply - so as you cannot be in Malaysia for 90 days or more during 2017 you will need to requalify for tax residency from now until July 2018.

Last 6 months won't count as tourist here.

Thanks for the clarification.

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