Need help - 28% Tax Rate

Last activity 11 February 2018 by Gravitas

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tuvinkhangNew member11 February 2018 04:33:10

Hi,
I started to work in Malaysia since January 2018. My contract is 1 year and is renewable. I am planning to stay here in a long term and will not go anywhere more than 14 days during the first 182 days.
As far as I know, the 28% tax rate is applied for non-resident and normally the salary will be deducted for 6 months in the beginning.
However, as I had a 1-year contract with the company, my January salary is automatically deducted 11.25% based on PCB and my company won't deduct 28% from my salary.
As far as I know, in April 2019, I am supposed to be qualified for being a resident. Therefore, when it comes to e-filing in April 2019, will I have to pay 28% x 6 months of my income in 2018 and then need to claim back?
I would be grateful for any information from you. Thank you.

GravitasViP11 February 2018 05:13:09

9040

You do have to pay 28% for first 182 days. If it is not deducted now you will have to pay back any shortfall with interest at the filing of your 2018 tax return in April 2019.

After 182 days the deductions then follow the normal progressive rates.

Just to qualify something you wrote - you become tax-resident (in July 2018) not a resident in immigration terms.

tuvinkhangNew member11 February 2018 09:45:58

Hi Gravitas,

Thank you for the reply. I am particularly concern about “paying the shortfall with interest” during filing for 2018 tax return. In other words, it is advisable to deduct 28%/month now to avoid the interest that might incur? And how much would the interest take?

GravitasViP11 February 2018 14:36:55

9040

See P.4 https://www.pwc.com/my/en/assets/public … ooklet.pdf

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