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Generally, all income of companies and individuals accrued in, derived from or remitted to Malaysia is liable to tax. However, income remitted to Malaysia by resident companies (other than companies carrying on the business of banking, insurance or air and sea transportation), non-resident companies and non-resident individuals is exempt from tax. Expatriates who settle in Malaysia under the Malaysia My Second Home programme are not required to pay tax on their pension or other income derived from overseas. Income tax is assessed on income earned in the current year.

Apart from income tax, there are other direct taxes such as real property gains tax, and indirect taxes such as sales tax, service tax, excise duty and import duty.

Agreements for the Avoidance of Double Taxation provide for the avoidance of incidence of double taxation on income such as business profits, dividends, interest and royalties that are derived in one country and remitted to another country. To date, Malaysia has signed such tax treaties with many other countries (see Inland Revenue Board Malaysia website for details).

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