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Malaysia Personal Income Tax Rate

Malaysia Personal Income Tax Rate A graduated scale of rates of tax is applied to chargeable income of resident individual taxpayers, starting from 0% (on the first RM5,000) to a maximum of 30% on chargeable income exceeding RM2,000,000 with effect from YA 2020.

Non-resident individuals pay tax at a flat rate of 30% with effect from YA 2020. Other rates are applicable to special classes of income, eg interest or royalties.

Tax Rate for Resident

	YA 2022		YA 2023
Chargeable Income	Income Tax Rate (%)	Gross Tax Payable (RM)	Income Tax Rate (%)	Gross Tax Payable (RM)
On RM5,000 Next RM5,000	0 1	0 50	0 1	0 50
On RM10,000 Next RM10,000	– 1	50 100	– 1	50 100
On RM20,000 Next RM15,000	– 3	150 450	– 3	150 450
On RM35,000 Next RM15,000	– 8	600 1,200	– 6	600 900
On RM50,000 Next RM20,000	– 13	1,800 2,600	– 11	1,500 2,200
On RM70,000 Next RM30,000	– 21	4,400 6,300	– 19	3,700 5,700
On RM100,000 Next RM50,000	– 24	10,700 12,000	– 25	9,400 12,500
On RM150,000 Next RM100,000	– 24	22,700 24,000	– 25	21,900 24,000
On RM250,000 Next RM150,000	– 24.5	46,700 36,750	– 25	46,900 37,500
On RM400,000 Next RM200,000	– 25	83,450 50,000	– 26	84,400 52,000
On RM600,000 Next RM400,000	– 26	133,450 104,000	– 26	136,400 112,000
On RM1,000,000 Next RM1,000,000	– 28	237,450 280,000	– 28	248,400 280,000
On RM2,000,000	– 30	517,450 –	– 30	528,400 —————

Income Tax Rates — Knowledge Workers In Iskandar Malaysia

With effect from Y/A 2010, the employment income of an individual who is a knowledge worker residing in Iskandar Malaysia and is employed with a person who is carrying on a qualified activity would be taxed at 15% of his/her chargeable income. The Malaysian Inland Revenue Board has clarified that qualifying individuals can opt to be taxed at 15% by indicating an option in the return form. Otherwise, the individuals will be taxed at scale rates.

The PU Orders on Income Tax (Determination of Knowledge Worker, Qualified Activity and Specified Region) Rules 2010 was issued on 29 September 2010.

The above Rules apply to a qualified person who has been granted approval by the Minister of Finance on his application made on or after 24 October 2009 but not later than 31 December 2020. With the approval, his employment income from 1 January 2010 from the designated company would be subject to tax at the concessionary rate of 15%.

The Order provides definitions for the following terms:

(i) Qualified person

(ii) Designated company

(iii) Knowledge worker, qualified activities and specified region

Specified regions within the Iskandar Development Region are:

(i) Nusajaya

(ii) Western Gate Development

(iii) Johor Bahru Central Business District

(iv) Eastern Gate Development

(v) Skudai – Senai

INCOME TAX RATES — RETURNING EXPERT PROGRAMME

In order to encourage skilled Malaysian professionals to return and boost the country’s economic growth, the employment income of an approved individual under the Returning Expert Programme (REP) will be taxed at the flat rate of 15% for a period of 5 years. This is with effect from Y/A 2012.

A gazette order has been issued on 24 May 2012, Income Tax (Determination of Approved Individual and Specified Year of Assessment Under the Returning Expert Programme) Rules 2012 [P.U.(A)151], to provide for the ascertainment of chargeable income of specified individuals that is subject to tax under the Income Tax Act.

Specified individuals means those:

(a) whose application under the Returning Expert Programme has been approved by the Minister of Finance;

(b) whose income is received from an employment with any person resident in Malaysia; and

Further terms and conditions on REP can also be found in the Talent Corporation Malaysia Berhad’s website.

Dealing with tax is not an easy thing without the expert’s advice and assistance. Feel free to contact us if you are unsure of how to file your personal income tax.