Income Tax for Inward Remittance

[Sentinel]

Lets discuss this topic for general knowledge, something new to share with each other.

Assuming I have worked overseas in a country which is duty-free / no income tax (like Brunei) and I have saved some money, a few millions ringgits for discussion purposes, and now that I am back home in Malaysia, I want to transfer this savings home.

I understand that for income earned aboard and remitted home, the money is subject to income tax (in this case at maximum rate of 27%?).

i) how do we transfer this large sum of money? do we need to inform my local bank in advance? do I need to seek some kind of approval? from who and how to go about it?

ii) when do we inform the IRD? at time of transfer, or before the transfer of the money?

iii) when do we pay the tax? as part of our regular annual income tax returns? or pay tax for this large sum transfer separately?

I want to know because who knows, maybe one day I might accidently have a large sum of money, I would know what to do he he!

[USJ27Resident]

Best you contact the IRB fellas and ask them directly... and get a black&white once they've finished with you...

the only catch is... once you've contacted them... they'll probably monitor ALL your banking accounts... to see if you've suddenly come into "millions" [rupiah and zimbabwean dollar exempted... ]

how they monitor: easy - once you have a MyKad/NRIC number - you're numbered...
[that is how I traced a 'perp' that once borrowed a considerable amount!]

[jadewhite]

Sentinel,

1. No need to inform bank in advance. Just tt the money to your account. Once the amount arrived, you need to fill a Form R (if I am not mistaken) and the bank will help you to submit to bank Negara.

2. You will be in the lime light lol but honestly I don't have the answer for that.

3. Apparently, its not mentioned in IRB web. I doubt the normal officer would have the answer for you.

But one thing for sure, Malaysia is yet to have a double taxation agrement with Brunei. Further details, click on this link. http://www.hasil.org.my/english/eng_NO2_3.asp#kandungan

[CALVINHOBBES]

This is from the LHDN website: http://www.hasil.org.my/english/eng_NO2_1_1A.asp

Doesnt it say it is not taxable?

1. For Resident Individual
A Resident individual is assessable on income derived from sources in Malaysia and income received in Malaysia from outside Malaysia. W.e.f. Y/A 2004 income remitted into Malaysia from overseas by a resident individual, a trust body, a cooperative and a Hindu Joint Family be exempted from income tax

[cypaq]

This is from the LHDN website: http://www.hasil.org.my/english/eng_NO2_1_1A.asp

Doesnt it say it is not taxable?

1. For Resident Individual
A Resident individual is assessable on income derived from sources in Malaysia and income received in Malaysia from outside Malaysia. W.e.f. Y/A 2004 income remitted into Malaysia from overseas by a resident individual, a trust body, a cooperative and a Hindu Joint Family be exempted from income tax

You're right. If a person is not a tax resident in Malaysia (doesn't matter if he is a Malaysian citizen or not) in a year of assessment, income that he earned overseas are not taxable in Malaysia.

[Sentinel]

You're right. If a person is not a tax resident in Malaysia (doesn't matter if he is a Malaysian citizen or not) in a year of assessment, income that he earned overseas are not taxable in Malaysia.

Cypaq, what if I am a tax resident in Malaysia? I am sure the amount remitted into Malaysia will be taxable, right?

[Sentinel]

This is from the LHDN website: http://www.hasil.org.my/english/eng_NO2_1_1A.asp

Doesnt it say it is not taxable?

1. For Resident Individual
A Resident individual is assessable on income derived from sources in Malaysia and income received in Malaysia from outside Malaysia. W.e.f. Y/A 2004 income remitted into Malaysia from overseas by a resident individual, a trust body, a cooperative and a Hindu Joint Family be exempted from income tax

If I understand your post correctly (highlighted in red above) that wef 2004, any income remitted to Malaysia for a resident individual is exempted from income tax? Thats good news, can you re-confirm this? Where is your source of this piece of info?

Oh, thank you for your info. too!

[Sentinel]

Sentinel,

1. No need to inform bank in advance. Just tt the money to your account. Once the amount arrived, you need to fill a Form R (if I am not mistaken) and the bank will help you to submit to bank Negara.

2. You will be in the lime light lol but honestly I don't have the answer for that.

3. Apparently, its not mentioned in IRB web. I doubt the normal officer would have the answer for you.

But one thing for sure, Malaysia is yet to have a double taxation agrement with Brunei. Further details, click on this link. http://www.hasil.org.my/english/eng_NO2_3.asp#kandungan

Hey Jadewhite, you're scaring me with this sentence, can you elaborate "in the limelight", please? Is it subject to investigation? Or the entire bank and Bank Negara people will be asking questions?

[cypaq]

Cypaq, what if I am a tax resident in Malaysia? I am sure the amount remitted into Malaysia will be taxable, right?

As a Malaysian tax resident, your income is taxable on the year you received your income NOT the year you remit into Malaysia.

Thus if you are resident in Brunei while you earned your billions, you are not subject to Malaysian income tax. Your current residency status is irrelevant.

[Sentinel]

As a Malaysian tax resident, your income is taxable on the year you received your income NOT the year you remit into Malaysia.

Thus if you are resident in Brunei while you earned your billions, you are not subject to Malaysian income tax. Your current residency status is irrelevant.

Oh oh... some problem there...

[jadewhite]

Hey Jadewhite, you're scaring me with this sentence, can you elaborate "in the limelight", please? Is it subject to investigation? Or the entire bank and Bank Negara people will be asking questions?

I think it falls back to efficiency. How efficient is the IRD dept? If the same question is pose to the officer, I doubt they have the answer. Sending an e-mail to them will take ages to be replied.

For starter, drop them an email and lets see how soon they respond. I have tested together with more than 5 reminders and till now I have yet to hear from them. Its been than since more than 10 months.

[Sentinel]

Jadewhite, what you are saying is just TT the money into one's account and fill in some form R with the bank to submit to Bank Negara.

Do nothing with the IRD? Hey, they are the one which will come after you hard later, not Bank Negara.

Are you suggesting to drop them an email and tell them to "come and get it" and if they don't reply.....

[kingtiong]

personally i did it few time, remit money back from indonesia.

i split my money into few remittance, each remittance is less than RM50k. remitted to different bank accounts. some to my wife bank accounts.

so i do not require to submit any form R. more than RM50k is definitely need to fill up form R. it is complusory requirement by Bank Negara, on the form there are 1 most important item, which is the purpose of remittance. if you fill it wrongly, definitely income tax ppl running behind of you.

but i am not sure whether few million in your case will be done in this way, cause you will lose some money in bank charges.

[patrick]

Jadewhite, what you are saying is just TT the money into one's account and fill in some form R with the bank to submit to Bank Negara.

Do nothing with the IRD? Hey, they are the one which will come after you hard later, not Bank Negara.

Are you suggesting to drop them an email and tell them to "come and get it" and if they don't reply.....

Other option bruder, email the tax boys. Check out their website at: hasil.gov.my and get their email address. Whenever I write to them, they seem to respond quite fast. Make sure you cc the Chief Officer Hasmah Abdullah at hasmah@hasil.gov.my. Rgds.

[Sentinel]

Other option bruder, email the tax boys. Check out their website at: hasil.gov.my and get their email address. Whenever I write to them, they seem to respond quite fast. Make sure you cc the Chief Officer Hasmah Abdullah at hasmah@hasil.gov.my. Rgds.

Hey Pat, thanks!

Whats the max tax rate... is it 27% for every dollar you remit home?

Someone say, if you have a Singapore bank account and you are not a resident, its better to TT the money into the Singapore account - not tax incidence involved, is that right?