Taxes in Malaysia

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Taxes in Malaysia are mainly divided into categories.

  • Direct TaxA fee imposed by a government on personal or corporate incom...
  • Indirect TaxA fee imposed by a government on personal or corporate incom...

Direct Taxes are divided as follows:

  • Corporate Income TaxA tax paid by individuals to the government, the amount of w...: Resident and non-resident organisations conducting business and earning taxable income in Malaysia are taxed on income accrued in or derived from Malaysia. Resident organisations carrying out business of air/sea transport, banking and insurance are taxable on their worldwide income.
  • Personal Income TaxA tax paid by individuals to the government, the amount of w...: Income taxA tax paid by individuals to the government, the amount of w... in Malaysia is imposed on income accruing in or derived from Malaysia. As such, every individual is subject to taxA fee imposed by a government on personal or corporate incom... on income earned in Malaysia or received in Malaysia from outside Malaysia.
  • Real Property Gains TaxA fee imposed by a government on personal or corporate incom...: Real Property Gains TaxA fee imposed by a government on personal or corporate incom... is charged on gains arising from the disposal of real property, which includes land, buildings or shares of a Real Property Company.
  • Withholding TaxA fee imposed by a government on personal or corporate incom...: Withholding taxA fee imposed by a government on personal or corporate incom... is imposed on payments to non-residents in respect of the following:
    • Interest
    • Royalties
    • Payments to non-resident contractors, consultantAn expert who is paid by a company, individual, etc., to giv... or professionals having a permanent establishment (PE) in Malaysia
    • Remuneration of public entertainer
    • Payment for use of property or installation or operation of plant and machinery
    • Technical fees
    • Rent on moveable property
    • Other income under Section 4 (f)
  • Stamp DutyCalled Stamp Tax in the US. A stamp which must be put onto c...: Chargeable on certain instruments and documents.

Indirect Taxes are divided as follows:

  • Service TaxA fee imposed by a government on personal or corporate incom...: Consumption taxTax paid which is based on the price of services or goods, e... levied and charged on prescribed taxable service provided by any taxable person.
  • Sales TaxKnown as VAT (Value Added Tax) in the UK. A tax based on the...: Consumption taxTax paid which is based on the price of services or goods, e... imposed on taxable goods manufactured locally and/or imported.
  • Import DutyA tax charged on certain goods which are brought into a coun...: Import duties are levied on an ad valorem basis but may also be imposed on a specific basis. The values of goods are calculated in accordance with the World Trade OrganisationWTO. An international organisation, established in 1995, wit... principles. Import taxA fee imposed by a government on personal or corporate incom... rates range from 0 – 30 per cent, although higher rates apply to luxury goods, tobacco, alcohol and processed and high-value food products.
  • Export Duty: Ad valorem basis on commodities that are exported and subjected to export duties.
  • Excise Duty: Excise duties are imposed on tobacco, alcoholic drinks and motor vehicles. No duty is liable on dutiable goods that are exported. The rates applicable range from 10 – 100 per cent, depending on the category of goods.