| Financial Framework |
Remittances Abroad
A resident is freely permitted :
(2) subject to the completion of a statistical exchange control form, to pay in foreign currency exceeding RM10,000 equivalent to a non resident for any purpose other than: -payment for investment abroad or payment for a guarantee for non-trade purposes;
(3) subject to the completion of a statistical exchange control form, to pay in Ringgit exceeding RM10,000 to a non-resident for: -purchase of Ringgit instruments, securities registered in Malaysia transacted through a commercial bank; -salaries, wages, commissions, interest, dividend or sale of foreign currency.
(4) Prior permission is required from the Controller of Foreign Exchange (Controller):
(a) for a resident: -to pay any amount in Ringgit to a non resident for import of goods; -to pay in foreign currency for amounts exceeding RM10,000 equivalent for investment abroad or for payment under a guarantee for non trade purposes; -to make payments to a non resident for any spot or forward contract or interest rate swaps or futures not transacted at a futures exchange in Malaysia; -to make payment in foreign currency for another resident, other than payments for education or employment overseas, repayment of foreign currency credit facilities obtained from licensed banks or payments for future contracts denominated in foreign currency traded on the KLCE.
(b) for a resident traveller to export Ringgit exceeding RM1,000 and foreign currency exceeding RM10,000 equivalent upon leaving Malaysia and
(c) for a non resident traveller to export Ringgit exceeding RM1,000 and foreign currency exceeding the amount of foreign currency brought into Malaysia upon leaving Malaysia.
Corporate Tax
Resident Status
A company is a tax resident in Malaysia if its management and control is exercised in Malaysia,. Management and control is normally considered to be exercised at a place where the directors' meetings are held.
(a) Where the recipient is resident in a country which has a double tax treaty with Malaysia, the tax rates for specific sources of income may be reduced and
(b) Interest paid to a non resident by a bank or finance company in Malaysia or on approved loans is exempt from tax. An approved loan is a loan granted to or guaranteed by the Malaysian government.
Residence of Individuals
An individual is regarded as a tax resident if he is in Malaysia for any of the following periods: -at least 182 days in a calender year; -a period of less than 182 days but that period is linked to a period of physical presence of 182 or more consecutive days in the following (or preceding) year; -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.
Rebates for Resident Individuals
If resident individual's chargeable income is less than RM35,000, rebate granted is deducted from the tax charged and excess is not refundable.
Sales tax is a single-stage tax imposed on certain locally manufactured goods and on similar goods imported. Sales tax is a consumption tax and the onus is on the manufacturers to levy and collect the tax from their customers. Sales tax is an ad valorem tax and specific rates of sales tax are currently imposed on different classes of petroleum.
Goods specifically exempted include:
--live animals, fish, seafood and certain essential food items including meat, milk, eggs, vegetables, fruits, bread etc.
--medical and educational equipment including sports equipment.
-photographic equipment and films motorcycles below 201 cc capacity, bicycles for adult use including parts/accessories.
--machinery for textile industry, food preparation, paper and printing industry, construction industry, metal industry, etc.
--primary commodities including cocoa, rubber and related products.
--naturally occurring mineral substances, chemicals, etc.
--helicopters, aircraft, ships and other vessels.
--prime movers and trailers used by hauliers.
Double taxation agreements have been concluded between Malaysia and the following countries: Albania, Australia, Austria, Bangladesh, Belgium, Canada, China (PRC), Czech Republic, Denmark, Egypt, Finland, Fiji, France, Germany, Hungary, India, Indonesia, Ireland, Italy, Japan, Jordan, Korea, Malta, Mauritius, Mongolia, Myanmar, Netherlands, New Zealand, Norway, Pakistan, Papua New Guinea, Philippines, Poland, Romania, Soviet Union, Singapore, Sri Lanka, Sudan, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Arab Emirates, UK, Uzbekistan, Vietnam and Zimbabwe.