Draconian Tax Rules - cannot leave Malaysia for more than 2 weeks now

Not new rules at all. Been this way for years.

No Rm 9000 tax free intro either for non residents.

Gravitas wrote:

Not new rules at all. Been this way for years.

No it wasn't! Only last year suddenly new rules. Before you could arrive in august and claim back tax after becoming resident - it was easy arrive Aug 2012, get large tax claim back April 2013. Easy and everyone did it. In first 6 months you were not allowed out for more than 2 weeks or be out of country at 31 Dec, but after that ok to be away longer than 2 weeks as long as paid.

What seems to have happened is the same rules are being reinterpreted. One colleague got stung with this rule.

I think it may have been in 2009 that the rule came in abolishing non-resident tax relief from the 26% flat rate.(under Section 130 of the Act effective YA2009)

http://www.mia.org.my/new/psp_taxation_ … amp;id=945

What is a bit scary are the absence rules not exceeding 14 days in aggregate (including holidays). I recall teachers telling me that was why they only holidayed inside Malaysia for the first year of their employment in Malaysia because of the school terms.

QUOTE

In calculating the period of less than 182 days or the period of 182 days or more consecutive days, relaxation is given where the period of temporary absence (i.e. period during which an individual is not is Malaysia) shall be taken to form part of that:

(a) period of less than 182 days; and/or
(b) period of 182 days or more consecutively; 

provided that the individual must be in Malaysia immediately prior to and after that temporary absence.

Temporary absences allowed are:

(a) absence which is connected with that individuals service in Malaysia such as attending conferences or seminars or study abroad;
(b) absence owing to ill-health involving the individual or a member of his immediate family (i.e. parents, spouse and children); and
(c) absence in respect of socials visits not exceeding 14 days in the aggregate (social visits include any form of vacation outside Malaysia besides vacation to home country).

Basically then rules introduced in 2009 and only enforced in 2013.

So my advice to all prospective expats is

GO TO ANOTHER COUNTRY!

especially if you like travel

Since when is this applicable?

A long time. It only applies during the period a person is gaining tax residence status, i.e. to be in Malaysia for 182 days in a full tax year (Jan-Dec). Once a person is tax resident it no longer applies. It is about continuity of presence in Malaysia and social absences are not recognised and break the qualification of the 182 day period required.