Tax Help

The 182 days starts from the date you joined the company and therefore had a valid employment pass and were liable to pay income tax.

1) You are non-resident for 2017.

You will become tax resident for tax year 2018 in about July 2018 (after 182 days presence)

You will pay 28% until about July 2018. From July-Dec you will pay tax-resident rates.

2) The 14 day rule is only relevant when trying to link a non-tax-resident year to a tax resident one. In your case 2017 to 2018.

If the two years are successfully linked then retrospectively, tax year 2017 will be re-assessed when you submit your 2018 tax return (April 2019).

If you meet the requirement, then 2017 and the first 182 days of 2018 will be assessed on the tax resident deduction rates. Any overpayment will be reimbursed at that time.

Hello everyone,
Good day!!
I am new to the forum, because i am considering to move to Putrajaya very soon.
this forum has helped me to get a little insight about malaysia thanks.

I want to know the 28% tax will be charged on monthly gross pay? 
Also the 182 days should be on continuous basis only then the resident status is considered. Meaning if we go out of malaysia for a week and return back will the days get continued.

Regards,
Eshwari

Its 182 per calendar year to qualify as tax resident. Tax year is also Jan-Dec.

28% on monthly gross pay

Number of days outside just extends the day count to reach 182 (e.g. 182 + 14 to become tax resident).

(The 14 day cumulative absence is only relevant if trying to link two tax years to be able to benefit from tax resident status reviewed retroactively. This is relevant for people who start working in Malaysia after July - where there are no longer 182 days left on the calendar.)

Hi Gravitas,

Thanks for replying.

In regards to my status as non-resident for 2017, can I appeal it? The way HR explained to me, she said that my company knows I'll be in Malaysia working more than 182 days (as I'm a permanent employee) but that they were putting me as non-resident first since the 182 days count down began at 0. She then told me from 1st Jan 2018, I would be taxed as resident since I'll definitely be here for longer than 182 days (unless I resign)...do I have to wait until July 2018 to be taxed as resident? By then in total I'd be in Malaysia for 365 days. HR also told me I should go to LHDN to get them to switch my status for 2017 to resident because it continues on from last year to the present...

In regards to the 14 days rule - if I can't appeal my status now for 2017 then I definitely want 2017 to be linked to 2018: in this case, from 1st Jan 2018 until I reach 182 days (in July), the maximum amount of days I can be outside Malaysia is 14 days right? Once I hit the 182 days in July, I am free to exceed my accumative 14 days in 2018?

You have absolutely NO grounds to appeal. If you were not receiving a salary for 182 days in 2017 you were non-resident. FULL STOP

Each tax year is viewed separately in terms of being tax resident through working for minimum 182 days. The only way to get 2017 viewed as tax resident is by linking tax years 2017 and 2018.

Yes regarding taking leave after becoming tax resident.

No job in Malaysia is permanent for foreigners, as the length is dictated by the employment pass. A request can be made to renew it, but if the job can be done by a local or there has not been knowledge transfer to enable this - immigration frequently reject renewals after a while.

Okay, thanks Gravitas, appreciate your replies.

Thank you for the response.

I feel its not worth to accept the offer for 6000 RM for 13 yrs of experience in Finance and also end up paying 1630 RM tax.  Net salary around 4350RM onlyto live and not to save anything .



Regards,
Eshwari

But you will get a refund and in the end pay about RM 300 tax per month. https://www.pwc.com/my/en/assets/public … ooklet.pdf

It's rare to even get a job offer at all in your field and no guarantee immigration will approve a work permit either.

I am sliighty suspicious about the offer in several ways and take the opportunity to remind readers never to pay any money to get a job in Malaysia.

By the way. RM6k puts a job in Category 2 employment pass, which allows dependents to accompany the EP holder.

Hi Gravitas,

I am currently a non-resident as I started working in January 2018. After 182 days being in Malaysia, then I'll be converted to a resident, which is in early July. My question is.. for the first 6 months, I'll be taxed at 28%. After 6 months, the rate is lower. When will I get refunded for the tax as my current resident tax is higher than my non-resident tax.

Thank you.

After you submit your annual tax return for 2018  which is due for submission in April 2019

Thank you for the response really appreciate it.
My company confirmed they would initiate and start the work permit process after I resign the job here, even though it's the same company inwill be joining in Malaysia, since internal transfer not possible.  But I am little hesitant to resign and start the work permit , as I will be jobless until I get the permit.

Regards
Eshwari