Income Tax Rate Malaysia 2024 – Types and Filing Method & Process!

For AY 2024, Malaysia’s income tax features reduced rates of 15% for knowledge workers in Iskandar Malaysia and non-citizens in key positions with a minimum salary of RM25,000 in GSH-approved companies.

Income Tax Rate Malaysia 2024

Malaysia employs a progressive tax system for resident individuals. This implies that the tax rate applied to your income increases as your income rises. Breakdown of the income tax brackets for AY 2024:

Chargeable Income (RM) Tax (RM) % on excess
0 – 5,000 0 0
5,001 – 20,000 150 1
20,001 – 35,000 600 3
35,001 – 50,000 1,500 6
50,001 – 70,000 3,700 11
70,001 – 100,000 9,400 19
100,001 – 400,000 84,400 24
400,001 – 600,000 136,400 26
600,001 – 2,000,000 528,400 28
Exceeding 2,000,000 + (RM 30 for every RM 1,000) 30

Note: % on excess: This indicates the percentage of tax applied to the portion of your income exceeding the lower limit of the bracket.

Malaysia Special Income Tax Rates 2024

Special Tax Rates are:

Film Production:

  • Film production companies, actors, actresses, and production crew conducting film shoots in Malaysia can enjoy a 0% to 10% special income tax rate for three consecutive years.
  • The exact rate depends on criteria set by the government, including the film’s budget, local content, and cultural impact.

Global Services Hub:

  • Non-citizen individuals holding key or C-suite positions with a monthly salary of at least RM35,000appointed by a new company approved with the Global Services Hub tax incentive are eligible for a 15%special income tax rate for three consecutive years.
  • This incentive aims to attract skilled professionals and boost the global services sector in Malaysia.

Qualified Knowledge Workers in Iskandar Malaysia:

  • Individuals who fulfil specific criteria and are employed in designated companies within Iskandar Malaysia are taxed at a flat rate of 15% on their employment income for a period of five consecutive AYs.

Returning Experts Programme:

  • Approved individuals under this program who are residents in Malaysia are taxed at 15% on their employment income for five consecutive AYs.

Income Tax Rate Malaysia

Non-Resident Individuals and Malaysian Income Tax

General Tax Rate:

Non-resident individuals are generally subject to a flat tax rate of 26% on their Malaysian-sourced income. This applies to income derived from various sources, including:

  • Employment exercised in Malaysia
  • Pensions, annuities, and other periodic payments arising in Malaysia
  • Business profits or gains accruing in or derived from Malaysia
  • Rental income from Malaysian property
  • Interest income from Malaysian sources
  • Royalties or other payments for the use or right to use any property in Malaysia

Exceptions and Exemptions:

However, several exceptions and exemptions apply, depending on the nature of your income and potential double taxation treaties between Malaysia and your country of residence:

Exemptions Based on Days Spent in Malaysia:

  • Income from employment exercised in Malaysia for not more than 60 days in total within a basic year or overlapping years is exempt from Malaysian tax.

Special Tax Rates for Specific Income Types:

  • Interest income: Certain types of interest income, such as interest on Malaysian Government Securities (MGS) and bonds issued by statutory bodies, may be subject to a reduced tax rate or tax exemption.
  • Shipping and air transport businesses: Non-resident shipping and air transport businesses may be subject to a reduced tax rate or tax exemption under specific conditions.

Double Taxation Agreements (DTAs):

  • Malaysia has concluded DTAs with many countries to avoid double taxation on the same income earned by residents of both countries. These agreements may stipulate:
    • Lower tax rates for specific income types for non-residents from treaty partner countries.
    • Exemption from Malaysian tax for certain categories of income earned by non-residents from treaty partner countries.

How to file tax in Malaysia 2024?

Eligibility:

  • Individuals with an annual taxable income exceeding RM34,000 after EPF deductions must file an income tax return.
  • This also applies to income earned from part-time jobs, freelance work, or any other sources within Malaysia.

Filing Methods:

  • Electronically (e-Filing): This is the preferred and encouraged method by the IRB. It’s convenient, secure, and offers faster processing times.
    • You can access the e-Filing system through the IRB website: https://www.hasil.gov.my/borang/muat-turun-borang/
    • You’ll need your e-Filing registration details (username and password) or MyGovID to log in.
  • Manually (Paper Form): You can download the relevant forms from the IRB website and submit them by mail or in person at any IRB branch. 

Steps for e-Filing:

  • Register for e-Filing if you haven’t already.
  • Log in to the e-Filing system using your credentials.
  • Select the “e-Filing (Individual)” option.
  • Choose the appropriate “Form” and “Assessment Year” (AY 2024 for this case).
  • Fill out the form electronically, providing accurate information and attaching required documents electronically.
  • Review and submit your return.
  • Pay any outstanding tax using the provided payment options.

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