Tax as an expat in KL

I think  you have misunderstood. First you have to earn your tax residency status. You do that by being in Malaysia for 182 days in the first (basis) tax year (January-December). During that time, you will pay non-resident tax rate which is a flat 25%. If during that "qualifying period" you are absent for social purposes (not business or proven emergencies) the clock starts again to reach the qualifying 182 days. It you are away for only 14 days then that gets added to your qualifying period. So you cannot avoid paying 25% non-resident tax but you can end up extending the period you pay it.

The immigration and tax databases have been linked now for quite some time, so no hiding place.

Once you have done your 182 days qualifying period and become tax resident then different rules apply. You can find them here

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

Tax equalisation takes place each year when you make your tax return and any overpaid or underpaid tax is returned or claimed by HASIL. There are also Double Taxation Treaties between Malaysia and lots of countries.

The problem that people tend to run into is permanently paying 25% flat rate (no tax free allowance of RM9k per annum and normal tax steps according to earning level) because they never complete a 182 day period (max+14 days).

One "difficult" rule that no longer exists is that a foreigner had to be present in Malaysia on the first and last day of a tax year. This of course put paid to extended absences over Christmas and New Year. Now its only the 14 day rule which may have an impact.

Gravitas you seemed to have a firm grasp on the Tax situation, we have an accountants team in my Aust office and I have an accountant in Australia, however there advice is limited when it comes to Malaysia.
High level summary of situation: Package will include all the normal expat perks (house, car and schooling * 2 kids (3rd on the way...arhhh!!). So well above any threshold for offset paid in USD into Malaysian account.
My Question is in Australia I pay the highest tax bracket and reading through these varies blogs etc, I assume that I will pay 26% for the first 182 after which time I will be classified as a Malaysian Tax resident. It is then that the Tax office in Malaysia calculates your new rate, however seeing my package is high end from what I can read I will still be taxed at 26% per year?
I realize, that I will be paying lower tax in Malaysia (26%) than in Australia (38%) so in essence that is a tax break, just wondering if there is anything else that can offset my income in KL.

Trouble is Gravitas the tax office dont always agree with you!

The 14 days includes 1 min of a day. Arrive at 11.59pm an counted as a whole day. The 14 days is often interpreted from experience as whole year. Depends on who you get! Our tax office said day of travel didnt count but tax man said otherwise. So 14 is really 12 days if you travel long distance.

I have been here over 3 years so get 3 months so i dont have to think about it but coworkers were screwed royally over tax. Technically business trips dont count but the tax office dont always agree they are business.

Dont forget this is the third world and rules are whatever the man in uniform in front of you decides they are!

I know many companies were saying start at end of  june or end of december.

Btw some tax men think the new year rules still applies. Go ask 10 of them and get 11 different answers!

This is my experience so far....no one knows whats going on and it really depends on who you get. I have heard it all......some people getting taxed 26 percent from the beginning and others only being taxed less from the beginning and then more from January......

Worst thing is that the worker is not protected, if your employer has messed around and not taxed you properly, who's fault is that?? Surely it's the employers responsibility.....I have heard cases of people being hit with a large tax bill before they leave the country and what can one do?

Nothing.

Correct me if I am wrong...