Frequently Asked Questions


INCOME TAX

Q1 : Do I need to pay Income Tax in Malaysia if I am drawing a salary in my own country ?

A : No, you do not have to pay tax on any offshore income.

Q2 : What kind of taxes are the participants of MM2H normally subjected to?

A : For MM2H participants, income tax is imposed on income earned from investments in local companies, local share market and from rental received in Malaysia.

Q3 : Do I have to submit any personal tax declaration to the Income Tax Department of Malaysia, like Malaysians have to?

A:You need to confirm this with our Income Revenue Board of Malaysia. Please visit their website at http://www.hasil.gov.my/index.php for details.

Q4 : Is the interest for my fixed deposit taxable? Some say it is taxable, other it is not taxable. If the deposit amount exceeds RM100, 000.00 OR if the deposit period is one year. What is the exact regulation?

A : You do not need to pay tax on interests earned from banks in Malaysia.

Q5 : If the participants have to submit income tax return to the Income Tax department, are they entitled to any exemptions under the programme?

A : They will only be taxed on the income earned in Malaysia after taking into account the personal tax allowances. The income will be taxed according to a progressive tax rate structure.

Q6 : Is income remitted from abroad taxable in Malaysia?

A : Before year of assessment 2004, income remitted from abroad to Malaysia (apart from pension) is subject to tax. However, from year of assessment 2004 onwards all income remitted from abroad is not subject to tax. In other words, from now on you do not have to pay tax on income generated from outside of Malaysia.

Q7 : If the participants have to submit income tax return to the Income Tax department, are they entitled to any exemptions under the programme?

A : They will only be taxed on the income earned in Malaysia after taking into account the personal tax allowances. The income will be taxed according to a progressive tax rate structure.

Q8 : I am a German in which my country has a `double taxation agreement’ with Malaysia. I have an early pension and if I stay in Malaysia for at least 184 days, my pension scheme will not be taxed by the German Government and will also not be taxed by the Malaysia government. Is this true?

A : Under MM2H Programme, pension remitted to Malaysia is exempted from tax.




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