Tax Resident status for any particular year

sudheers7 wrote:

1. I came to Malaysia on July-30 2018 , so for year 2018 by December 31st I will be completing - 185 days
**Count the days again because I think the Cut Off date to be TR in 2018 is 3rd July?

--- I will be tax Resident for 2018 and can obtain COR in January 2019, will get tax refund in April 2019.
Is it correct?
**No - Each tax year is counted separately January-December
You are not in Malaysia 182 days in 2018 so the next step is to be in Malaysia 182 days in 2019 to become TR.

2. 2019 is again a fresh year for considering tax Resident, so I need to stay >182 days to consider as tax Resident for 2019. That means I can stay out of Malaysia n number of days, say 20 days in Jan , 15 days in April and so.. but by the end of December-2019 I need to complete >182 days..
**14 days social visit is not applicable as I am not linking any 2 years ***
Is it correct ?
**Why don't you want to link tax years 2018 and 2019?  If you don't link them you will have to pay 28% tax for 2018 July-December (with no refund possible)? If you leave before you are TR the tax rate for 2019 will also be 28% with no refund (because you did not make it to being TR)

3. So every year we need to stay >182 days to consider as tax Resident and refund can be claimed the next year ?
Is it correct?
**Read P6 of this guide as it explains tax residency can also be 90 days over 3 years
https://www.pwc.com/my/en/assets/public … ooklet.pdf

4. Once we become tax Resident- in my case 2018 December. So from jan-2019 to subsequent months and years, tax will be deducted as per resident rates,
** You will not be TR in 2018

and if I didn't complete 182 days in 2019 year I need to pay extra tax (to match - 28%) while income tax filing or leaving.
** You will pay 28% if you dont complete 182 days in 2019 with no hope of any refund.

Example : Jan to June - tax rate - 13%, I left in June 15th 2019 permanently and my stay for 2019 is <182 days. So during leaving I need to pay remaining 15% tax to settle.
Is that correct ?
**No tax will be deducted every month from your salary (that is the LAW). You don't mention your salary so I don't know what your tax rates will be.  It is a rising scale when TR. So low % of first part of salary with higher % as the size of salary increases. This is worked out on ANNUAL SALARY.  The booklet above shows the tax rates.

Please help to confirm and advice.

Thanks for the detailed reply.

Small correction in my post, I came on JUNE -30 2018.
So I think I will be tax Resident  in 2018 as I'm staying 185 days.

I will go through the link provided for further details.

Thanks for your time..

With your corrected date of starting employment*, you will be tax resident in 2018.

You will get a refund of overpaid tax when you submit your Annual Tax Return for 2018 (in April 2019).

If you leave on 15th June 2019 you would be non-tax resident for 2019 so should take less than 14 days outside Malaysia until that date so you can link 2019 back to 2018 and both years will be recalculated as TR

* income tax is relevant from the first day of working - not entering the country i.e. where you have a taxable income.

Thanks for reply,

My understanding is like, as I am completing 185 days in 2018( june-30 to December-31), there is no need to link the taxing year 2018 with 2019.

And also I am planning to visit my home country in Jan2019 for 13 days
so is it like I have only 2 more days that I can take in 2019 to stay out of Malaysia 2019
, or,
as I already completed 185 days in 2018 no need to worry about this 14 days social visit and just stay 182 days (no need to be continuous) in 2019?

And regarding your point,
income tax is relevant from the first day of working - not entering the country i.e. where you have a taxable income.
** This is only for tax calculating right not for the tax Resident status ? Because there will be delay between the day we entered Malaysia and EP start date.