Scope of Taxation

Liable to Malaysian tax when it carries on a business through a permanent establishment in Malaysia and assessable on income accruing in or derived from Malaysia.

Non-resident Tax rate

Types of income

Rate (%)

Business
Rental
25

Dividend (Franked)
Dividend (Single tier)*
25
0

Entertainer's professional income
15

Interest
15

Royalty
10

Special classes of Income:
  • Rental of movable property
10
  • Fees for technical or management services performed in Malaysia
10
  • Payment for services rendered in Malaysia in connection with use of property or installation or operation of any plant, machinery or other apparatus purchased from a non-resident person
10

Real Estate Investment Trust (REIT)
  • Other than a resident company
10
  • Non-resident company
25
  • Foreign investment institution
10

Effective from 01/01/2007

*With the introduction of the single tier dividend system effective 1.1.2008, all dividends are tax free in the hands of the shareholders.However companies with section 108 credit under the old imputation system are given a transitional period until 31.12.2013 to frank normal dividends so as to enable them to exhaust their section 108 credit.