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pucman
19-07-2009, 02:41 PM
Do we need to declare the following to malaysian income tax dept ?

1. Salary earned outside of Malaysia eg. Singapore.

2. Inheritance money from deceased parents.

3. Dividend from tax-deducted (or tax-free) dividends.

4. Pension fund from a foreign country eg. CPF from singapore.

cypaq
20-07-2009, 11:32 AM
1. No, if you are not a Msian tax resident at the time the salary is earned
2. No.
3. No.
4. No.

pucman
20-07-2009, 11:37 AM
1. No, if you are not a Msian tax resident at the time the salary is earned
2. No.
3. No.
4. No.

What do you mean by tax resident ? Previously, we have a malaysian tax file no. before going overseas to work.

Fabe18
20-07-2009, 11:57 AM
I have a few frens who are tax consultants.. U want their service???

1. If you less than 180 days in the country during that year, don't need to pay malaysian tax.. that's what I understood... Pls check with the proper consultant..

3. if the dividend u received is post tax and if your tax bracket is lower, then u can even claim back from the tax deducted. That's what my retired FIL did... Again, check out this one with the tax consultant.

cypaq
20-07-2009, 12:02 PM
A simplictic defination is: if you are residing in M'sia for more than 182 days in, say 2008, then you are a M'sian tax resident in 2008. Thus if you are a M'sain tax resident you are required to declare your overseas salary to Malaysia's IRB.

If you are not a tax resident in Malaysia, you are required to declare your Malaysian derived income only and be subjected to a higher income tax rate as a non-resident. Salary income from outside Malaysia in not subjected to Malaysian income tax if you are not a resident in Malaysia.

Please note: I am talking about resident status. Not citizenship.

cypaq
20-07-2009, 12:06 PM
1. If you less than 180 days in the country during that year, don't need to pay malaysian tax.. that's what I understood... Pls check with the proper consultant..


This is not 100% correct. Please read my post.

kimsng
20-07-2009, 12:23 PM
wow i can put my knowledge of studying ACCA in college now haha,just passed my tax paper a cp of sems ago.

aite pucman...

in plain english, here we go. btw, this is for your individual residence status, not for your company, that's a whole diff set of rules.

PLEASE UNDERSTAND that being a TAX RESIDENT and a MALAYSIAN CITIZEN is 2 VERY DIFFERENT issues. meaning you can be a tax resident in Malaysia without being a citizen(like an expartriate) or you can be a Malaysian citizen but not a tax resident in Malaysia.

of course being a tax resident is awesome cos you get flexible rates unlike non-tax residents which incurs a flat rate of 26% tax on their income after all the deductions allowed. but that's a whole another chapter in my text book so let's forget abt that.haha

to qualify as a individual tax resident in Malaysia, you must qualify JUST ONE of the conditions below, according to the Income Tax Act 1967, Section 7(1):

(a):
you must be physically present in Malaysia for at least 182 days during your year of assessment.


(b):
you are physically present in Malaysia for less than 182 days AND that period is linked to another period of at least 182 consecutive days for the next or even previous year of assessment.

meaning there can be 2 chances la, a " linked-by " or "linked-to" we call it,an example:

eg. Linked-to

in Malaysia from 1/9/07 to 29/12/07
in Malaysia from 3/1/08 to 31/12/08


the difference in days from 30/12/07 to 2/1/08 of you not being in Malaysia can be assessed as temporary absence provided that it is:

(i) connected to your service in Malaysia and owing to service matters or attending conferences or seminars or study abroad. (basically meaning business-related)

(ii) owing to ill-health involving yourself or a member of your immediate family.(wife,children,parents, but not your own bro/sis once your married)

(iii) in respect of social visits not exceeding 14 days in aggregate.


then it can be called a "linked-to" and you have qualified as a tax resident for the year of assessment of 2007.

eg. Linked-by

in Malaysia from 1/3/07 to 28/12/07
in Malaysia from 2/1/08 to 1/4/08

the temporary absence from 29/12/07 to 1/1/08 must qualify as its "definition" shown above in the earlier example, then it can be called a "linked-by" and you have qualified as a tax resident for the the year of assessment 2008.


(c):

you have been in Malaysia for at least 90 days in that basis year and 3 out of 4 immediate preceeding years you have been a tax resident in Malaysia.

eg.

2008 in Malaysia for at least 90 days but lesser than 182
2007 in Malaysia for at least 182 days(qualify adi under 7(1)(a) )
2006 in Malaysia for at least 182 days(qualify adi under 7(1)(a) )
2005 in Malaysia for at least 182 days(qualify adi under 7(1)(a) )

so using this section, you qualify as a tax resident in Malaysia in the year of assessment 2008.

(d):

you have been in Malaysia for less than 90 days or maybe even NONE in that year of assessment, then in the 3 IMMEDIATE preceeding years and the following year you must be a tax resident in Malaysia to qualify for that year of assessment.

eg.

2008 in Malaysia for at least 182 days(qualify adi under 7(1)(a) )
2007 terbang to dunno where, not in Malaysia at all
2006 in Malaysia for at least 182 days(qualify adi under 7(1)(a) )
2005 in Malaysia for at least 182 days(qualify adi under 7(1)(a) )
2004 in Malaysia for at least 182 days(qualify adi under 7(1)(a) )

if you fulfill this condition then you have qualify as a tax resident in Malaysia for the year of assessment 2007.



I hoped i have helped you clear your doubts pucman, this is just talking abt how to determine your tax residence status in Malaysia.

but your 4 questions is in a different chapter adi haha.

your number 1 item of salary from a foreign country would GENERALLY la not be taxable cos foreign remitted is exempted, but there are exceptions in the rule such as airport,shipping,insurance and all that, but i can't rmb the details.

but definitely your item number 2 of inheritance would not be taxable since it is a one-off thing and would be regarded as capital in nature.

number 3 item of your dividends thingi would also not be taxable, IRB adi scrap that rule since 2008 or smtn like that.

number 4 item of your pension would most probably apply the same thing like your item number 1. which would not be taxable.


so basically cypaq is right la. anyway, please also do check with the professionals la just for double checking but it should be correct la.

:D

lly
23-07-2009, 04:18 PM
So, money from insurance, sale of company shares due to death of spouse also not taxable?

Sentinel
23-07-2009, 04:56 PM
So, money from insurance, sale of company shares due to death of spouse also not taxable?There is no income tax on insurance claims, capital gains (from sales of shares) and no inheritance tax too.

chanelt
23-07-2009, 10:28 PM
wow... many tax experts here!!! + ACCA student as well!!

I have some very personal opinion:-

1. all dividend that we received is net after tax, there is no "tax free" dividend, haha, but only "single tier" dividend or "sec 108" dividend. After fully utilise sec 108, all dividend will all be "single tier", no lower bracket claim anymore.

2. Pension fund & inheritance don't attract tax, so as capital gain or gain from gambling & investment, eg stock, shares...

3. yes, right, 182 days to be qualified as tax resident. Kinsng, very detailed explanation, but to be qualified, not necessarily consecutive stay of 182 days.

4. Haha.. who says non resident has to pay flat rate of 26%??? haha that is applied to "NON RESIDENT COMPANY". for non resident individual, only "witholding tax" applied... haha

5. Effective from Y/A 2007, foreign income which is the statutory income, shall constitute income derived from outside Malaysia and includes income derived from Malaysia charged to foreign tax. Please ensure you avoid "double Taxation"!!

haha.... haha....

kimsng
23-07-2009, 10:38 PM
chanelt: thx. but now sec 108 is not applied anymore since it has been taken off from YA 2008...

the 182 consecutive days is only applied to section7(1)(b) link to and link by cases only, it does not apply to section7(1)(a).

and btw, it may be just typo, but im kimsng,not kinsng. haha

chanelt
23-07-2009, 10:40 PM
yes, sec 108 taken off, but don't forget about the unutilised balance, we have 5 years to clear, that will last until 2013.

chanelt
23-07-2009, 10:47 PM
ok. to be exact.

Company can't accumulate current YA sec 108 after YA 2008. But they can utilise the cumulative balance of sec 108 (as at ya 2008) by paying shareholders dividends for their tax bracket different tax refund.

chanelt
23-07-2009, 10:49 PM
but Kimsng, I admire you, as a student, you are much knowledgeable than my Accountant... she qualified for years & yet not proficient in tax rules.