Tax returns in Malaysia

No tax refund will be made unless you complete 182 days and then only difference between resident and non-resident tax rates.

As long as your personal absences have not been more than 14 days in total then you would become tax resident in say 182 days + 14 (or days absent from Malaysia)

The resident tax rates can be found in this brochure

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

Thanks for your quick reply.

But my visit is not more than 14 days in a single shot.

They will be considered as a cumulative or single trip?

If its cumulative than I need to increase my stay here?

In case of emergency can I submit any medical documents and proceed to apply for returns ?

can you please let me know the claim procedure before I leave Malaysia?

Cumulative - but if you have exceeded 14 days in total then your 182 days starts again from zero at your last arrival date in Malaysia.

Your company starts tax clearance by preparing a Leavers Certificate. You can go to your local tax office to get clearance as soon as you resign and get the form. Medical treatment can be counted as outside qualifying consecutive 182 days. The tax officer will process your case. Usually the company withholds your last month's salary pending clearance (takes about 10 days)

You also need to cancel your employment pass which the company will take care of. To do this you buy your ticket home and the pass is shortened to coincide with your departure date + 2 days

Thanks for your response, but my leaves will be calculated from the date of departure to arrival? Usually my flight timings will be evening 21:30 (Departure) and arrival is on Morning 06:00 AM.
Some days I travelled due the business reasons. How can I prove that?

Medical emergency to my dependent family member. Do I need to get the medical certificate from my country and need to provide the tax officials here?

Get your company to issue a letter certifying your professional absences.

As long as a person is in Malaysia at any time in the 24 hrs it is counted as in-country presence

Yes, get medical evidence

Thanks for your feedback. I just need small clarification. Till now I paid flat 28% tax.
After 182 days in this financial year. When I'm I try to file a returns how much % will I get as returns from LDHN approximately.

1) First step is - after 182 days apply for a Certificate of Residence.

2) The refund will be calculated when you do your tax return for 2018 which is before 30th April 2019 (or when you resign and leave the country).

3) The refund will be the difference between 28% paid for 6 months and what tax would have been paid for those 6 months according to the tax-resident rate.

4) So work out your annual salary (salary x 12) and minus RM9k which is your tax-free allowance.

Then look up the various 2018 tax bands shown in this booklet https://www.pwc.com/my/en/publications/ … oklet.html

Once you can see what your annual tax liability is, if you divide it by 12 you will arrive at the monthly rate and can compare that figure to what you paid when the deduction was a flatrate 28%

5) So it all depends on your salary level.

I forgot to mention that, I started working from Jan 1st 2018 and I will be leaving the country after 182 days. Before I'm leving the country I would like to file a returns. In this case how much they will charge the Tax and How much % will be return in that 28%.

Lets say for example on 6K monthly salary and paid flat 28% tax on every month.

If you resign after 7 months your annual income would be RM6,000 x 7 months i.e. RM42,000 minus a portion of the annual tax-free allowance of RM9,000 (7/12ths) i.e. RM5,250

So 42,000-5,250 = RM36,750

28% deduction would be RM1,680 monthly

There is a minumum earnings level or tax threshold at which tax is incurred and I am trying to locate that information on the new LHDN  site - it used to be around RM32,000 but this may not be relevant based on your actual earnings.

Just found the information and the tax threshold is now RM34,000

This may be of interest about termination of employment
http://www.hasil.gov.my/bt_goindex.php? … ;bt_sequ=3

Thank you very much for your inputs. But in this case its not terminated. I only put the resignation and serving notice period. So it will complete exactly 182 days by July 4th and leaving the country. In this case calculation will be the same?  I bit confused on above calculation.

It's too complex to work out the 4 days salary for July and I think they will only count 2 days because 1st/2nd are weekend.

Because of this you may as well just use 6 months for the calculation

This is a rough estimate based on what you have mentioned above calculated on 6 full months of salary and using a monthly net salary of RM12k:

If Tax Resident
6 x RM12,000 = RM72,000
Tax allowance = RM4,500
Taxable income = RM67,500

Tax = RM4,250

If Tax Non-Resident
RM72,000 x 28% = RM20,160

Rebate = RM15,910

Thank you very much for this easy calculation.
But If I exit Malaysia for 10 days within 182 days. Do I need to extend my stay for these 10 days as well. In order to complete 182 days or those 10 days will be exempted?

Add them to 182 days so 182 + 10 = 192 days

thank you....

Hi Gravitas, you are so knowledgeable! Just curious, my contract stared on the 14th Of Feb this year and i plan to be here until July 2018 in my current role. Obviously i will be charged the flat rate until around July. After that it will go down to about 20% you say? I have an annual income of RM125450 not inclusive of bonus.

Can i expect to receive any refund from the flat rate tax rate? If so do i submit this in early 2019 or do i do it all before i leave in July 2019? Is there any Tax Accountants in KL you recommend as there are a few of us in the same situation and would like to do this correctly and make sure we dont owe anything on departure but also if possible claim any refund that we can when leaving.

Malaysia Resident Tax rates are graduated. Lower percentages on first few thousands of income, then gradually rising for only higher portions of salary.

Check the various rates out here: https://www.pwc.com/my/en/publications/ … oklet.html  There is also a RM9k per annum (pro rata) tax-free allowance when resident.There are also some other allowances mentioned in the brochure, but once again only for tax resident individuals.

After 182 days (if you arrived in February work out days from first day of employment) the resident rates would apply. retroactively for the first 182 days.

If leaving Malaysia permanently (July 2018?) any overpayment can be claimed then. The company produces a "Leavers Form" and clearance is done at the tax office in person (or via an accountant).

Ask your employer for suggested accountants who can help with your final submission.

Thanks for the response!

So basically i just continue to do as usual. Get residency cert after 182 days and then before i leave permanently in July 2018 i can do tax return for entire period?

Thanks

Yes exactly. Just remember any personal absences extend the non-resident day period.