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Tax residence status of individuals
An individual is regarded as tax resident if he meets any of the following conditions, i.e., if he is:
- in Malaysia for at least 182 days in a calendar year;
- in Malaysia for a period of less than 182 days during the year but that period is linked to a period of physical presence of 182 or more “consecutive” days in the following or preceding year. Temporary absences from Malaysia due to the following reasons are counted as part of the consecutive days, provided that the individual is in Malaysia before and after each temporary absence:
- business trips
- treatment for ill-health
- social visits not exceeding 14 days
- in Malaysia for 90 days or more during the year and, in any 3 of the 4 immediately preceding years, he was in Malaysia for at least 90 days or was resident in Malaysia; or
- resident for the year immediately following that year and for each of the 3 immediately preceding years.
Personal reliefs for resident individuals
| Types of relief | YA 2021 (RM) |
|---|---|
| Self | 9,000 |
| Disabled individual - additional relief for self | 6,000 |
| Spouse | 4,000 |
| Disabled spouse - additional spouse relief | 5,000 |
| Child: | |
| 2,000 |
receiving full-time instruction of higher education in respect of: - diploma level and above in Malaysia; or - degree level and above outside Malaysia OR serving under articles or indentures in a trade or profession in Malaysia | 8,000 |
| 6,000 |
- diploma level and above in Malaysia; or - degree level and above outside Malaysia OR serving under articles or indentures in a trade or profession in Malaysia | 14,000 |
| Life insurance premiums | 3,000* |
| EPF contributions | 4,000* |
| Private Retirement Scheme contributions and Deferred annuity scheme premium (until YA 2025) | 3,000* |
| Insurance premiums for education or medical benefits | 3,000* |
| Expenses on medical treatment, special needs or carer expenses for parents (evidenced by medical certification) | 8,000* |
| Employee’s contribution to Social Security Organisation (SOCSO) | 250* |
| Medical expenses for self, spouse or child suffering from a serious disease, expenses incurred on fertility treatment, or vaccination up to RM1,000 (including fees of up to RM1,000 incurred by self, spouse or child for complete medical examination | 8,000* |
Fee expended for any course of study up to tertiary level other than a degree at Masters or Doctorate level, undertaken for the purpose of acquiring legal, accounting, Islamic financing, technical, vocational, industrial, scientific or technological skills or qualifications or any course of study for a degree at Masters or Doctorate level undertaken for the purpose of acquiring any skill or qualification or approved courses with professional bodies including professional courses in accounting, finance, and ESG-related. This includes fees for attending upskilling and self-enhancement courses, limited to:
| 7,000* |
| Purchase of supporting equipment for self (if a disabled person) or for disabled spouse, child or parent | 6,000* |
Lifestyle relief consolidated with the following:
| 2,500*
|
| Purchase of breastfeeding equipment | 1,000* |
| Fees paid to child care centre and kindergarten | 3,000* |
| Deposit for child into the Skim Simpanan Pendidikan 1Malaysia account established under Perbadanan Tabung Pendidikan Tinggi Nasional Act 1997 (until YA 2022) | 8,000* |
| Domestic travelling expenses (payment for accommodation and fee for entrance to tourist attractions) (Special Relief) (Note 1) | 1,000* |
| Additional relief (on top of lifestyle relief) for purchase of personal computer, smartphone or tablet (Special Relief) | 2,500* |
| Additional relief (on top of lifestyle relief) for expenditure related to cost of purchasing sports equipment, entry/ rental fees for sports facilities and registration fees for sports competitions | 500* |
* Maximum relief
Note 1:
W.e.f March 2021, the scope of this relief has been expanded to include expenses relating to purchase of tourism packages through MOTAC-registered local travel agencies, including:
i) payment of services of local tourist drivers
ii) purchase of local handicraft products
iii) food and drink, and
iv) hop-on hop-off transportation
Rates of tax – Year of assessment 2021
| Chargeable Income | Calculations (RM) | Rate % | Tax(RM) |
|---|---|---|---|
| 0 - 5,000 | On the First 5,000 | 0 | 0 |
5,001 - 20,000 | On the First 5,000 Next 15,000 | 1 | 0 150 |
20,001 - 35,000 | On the First 20,000 Next 15,000 | 3 | 150 450 |
35,001 - 50,000 | On the First 35,000 Next 15,000 | 8 | 600 1,200 |
50,001 - 70,000 | On the First 50,000 Next 20,000 | 13 | 1,800 2,600 |
70,001 - 100,000 | On the First 70,000 Next 30,000 | 21 | 4,400 6,300 |
100,001 - 250,000 | On the First 100,000 Next 150,000 | 24 | 10,700 36,000 |
250,001 - 400,000 | On the First 250,000 Next 150,000 | 24.5 | 46,700 36,750 |
400,001 - 600,000 | On the First 400,000 Next 200,000 | 25 | 83,450 50,000 |
600,001 - 1,000,000 | On the First 600,000 Next 400,000 | 26 | 133,450 104,000 |
1,000,001 - 2,000,000 | On the First 1,000,000 Next 1,000,000 | 28 | 237,450 280,000 |
Exceeding 2,000,000 | On the First 2,000,000 Next ringgit | 30 | 517,650 .......... |
1. Resident individuals
- A qualified person (defined) who is a knowledge worker residing in Iskandar Malaysia is taxed at the rate of 15% on income from an employment with a designated company engaged in a qualified activity in that specified region.
- An approved individual under the Returning Expert Programme who is a resident is taxed at the rate of 15% for 5 consecutive YAs.
- A non-citizen receiving a monthly salary of not less than RM25,000 and holding key positions / C-Suite positions is taxed at a flat rate of 15% for a period of 5 consecutive years. This incentive is limited to 5 non-resident individuals employed in each company that has been granted relocation tax incentive under PENJANA initiative (applications received by the Malaysian Investment and Development Authority (MIDA) by 31 December 2021, extended to 31 December 2022)
2. Non-resident individuals
| Business, employment income, discounts, rents, premiums, pensions, annuities, other periodical payments and other gains or profits (includes payments received for part-time / occasional broadcasting, lecturing, writing, etc.) | 30% |
|---|
Tax rebates for resident individuals
| Types of rebate | RM |
|---|---|
| Individual’s chargeable income does not exceed RM35,000 | 400 |
| If husband and wife are separately assessed and each chargeable income does not exceed RM35,000 | 400 (each) |
| If husband and wife are jointly assessed and the joint chargeable income does not exceed RM35,000 | 800 |
| Rebate for Zakat, Fitrah or other Islamic religious dues paid | Actual amount expended |
| Rebate for departure levy paid for performing umrah and pilgrimage to holy places. | Actual amount expended (twice in a lifetime) |
The above rebate granted is deducted from tax charged and any excess is not refundable.
DISCLAIMER The material contained in this publication is of a general nature only and neither purports, nor is intended, to be advice on any particular matter. Readers should not act upon any matter or information contained in or implied by this publication without taking any appropriate professional advice. The above material is based on the law on the date of publication. While every effort has been made to provide information current at the date of publication, tax laws change constantly. Accordingly, the material should be viewed as a general guide and not to be relied on without consulting your tax adviser for specific applications of the tax rules to your own situation.