INDIVIDUAL TAXATION

Nonresidents are liable to pay tax on Malaysian-sourced income. Married couples may file for joint assessment, but separate assessment is deemed to be more effective in lowering overall tax liability. Personal reliefs (tax allowances) are not granted to nonresidents.

Income Tax

Nonresidents are taxed at a flat rate of 30% on their Malaysian-sourced income.

Rental Income

Rental income is taxed at a flat rate of 30%. Income-generating expenses are deductible from the gross rent such as interest expense, cost of repairs, assessment tax, quit rent, and agent´s commission. Depreciation does not qualify for tax deductions against income, and capital allowances are not available for residential and commercial buildings.

Rental income earned by nonresidents may be subject to 10% withholding tax. The withholding tax may be credited against the nonresident´s income tax liability.

Capital Gains Tax

Disposals of Malaysian real property are subject to real property gains tax (RPGT). RPGT is levied at progressive rates, depending on the property´s ownership period or holding period prior to its sale.

REAL PROPERTY GAINS TAX - NON CITIZENS 2023
OWNERSHIP PERIOD	TAX RATE
Up to 5 years	30%
Over 5 years	10%
Source: Global Property Guide

      

PROPERTY TAX

Assessment Tax on Residential Property

The assessment tax is a local tax based on the annual rental value of the property, as assessed by the local authorities. It is generally levied at a flat rate of 6% for residential properties and payable in two installments.

Quit Rent

The quit rent is a local tax levied on all landed properties, payable annually at a rate of 1 sen (US$0.003) to 2 sen (US$0.006) per square foot, wherein MYR1 (US$0.25) is equal to 100 sen (cents). The quit rent liability is generally estimated to be less than MYR100 (US$25) per year.

CORPORATE TAXATION

Income Tax

Income and capital gains earned by nonresident companies are subject to corporate income tax at a flat rate of 24%. Income-generating expenses are deductible when calculating taxable income.

The applicable corporate income tax rate is 24% for 2023.

 

Capital Gains Tax

Disposals of Malaysian real property are subject to real property gains tax (RPGT). RPGT is levied at progressive rates, depending on the property´s ownership period or holding period prior to its sale.

REAL PROPERTY GAINS TAX - COMPANIES 2023
OWNERSHIP PERIOD	TAX RATE
Up to 3 years	30%
3 years - 4 years	20%
4 years - 5 years	15%
Over 5 years	10%
Source: Global Property Guide