28% Tax deduction - 14 days out of the Malaysia


I am currently working in Malaysia from 8th September 2017 till date and i will be working till Sep 2018 till my contract gets completed.

Currently my employer is deducting 28% tax from my salary. By March 10th i will be completing 183 days and i will be taxed as a resident from March.

Unfortunately as my mother passed away, i went to India (home town) for 15 days (21st Oct 2017 to 5th Nov 2017). And i stayed for more than 14 days in 182 days period. Is this trip will effect my Tax returns? I am so much worried whether i can get total Tax returns in 2018 or any deductions? Because my pay is only RM 3500. Please provide me the information to claim my tax returns. Do i need to submit any documents to LHDN?

Thanks in Advance.

It does not work like that. You have to be 182 days in a tax year (January to December)

So you will be 182 days in Malaysia some time in June/July for 2018

If you have been outside Malaysia more than 14 days then you can still link 2017 to 2018 and get a refund of the difference between resident and non-resident rates.  This would be because you did not take the 14+ days during 2018.

You do need to submit a tax return to LHDN for 2017 in the next month or so (March/April 2018)

You won't get the refund until you have completed your tax return for 2018 in March/April 2019. They can then see you linked the two years successfully according to the rules.

Thank you so much for the very quick reply.

I am sorry to ask you one more clarification that, do i need to wait until 2019 for my tax returns? If i exit Malaysia in 2018 Sept (as my contract will be completed), do i need to come back Malaysia in 2019 again to claim my Tax returns? Please clarify me.

Thank you so much in advance.

You can do your tax clearance when you depart in September 2018. They will process any refund due to you. Do it at least 4-6 weeks in advance. Employer usually withholds your last salary until TC is done. They have to file a Leavers Certificate for you with LHDN.

It's just not possible to apply for refund immediately when qualified as tax resident. The only times are (a) annual tax return or (b) leaving Malaysia.

Do keep all records such as boarding passes.

Thanks a lot for the very quick reply.

I forgot to ask you one more clarification that currently my employer is deducting 28% tax (Non Residential Tax) amount from  Sept 2017 and i hope it will be till Feb 2018 (6 months). And i hope i will be charged at Residential tax rate from March 2018. As my pay is only RM 3500 can i expect tax free salary from March 2018?

Thank you so much in advance.

Please read what I wrote - you will be deducted 28% until June/July 2018 because qualification to be tax resident is per tax year (i.e. Jan-Dec)

1. You are NEVER tax free (you just pay lower resident rate)
2. You will only be tax resident in Jun/Jul 2018 not before.
3. You will get any overpayment of tax September 2017 to July 2018 refunded at tax clearance when you are preparing to leave.

Thank you so much.

New topic