On 29 September 2022, the Malaysian Inland Revenue Board published its guidelines on tax treatment in relation to income which is received from abroad. The objective of the guideline is to explain the tax treatment of foreign income received in Malaysia by a resident. The guideline is issued pursuant to the amendment of Paragraph 28 of Schedule 6, Income Tax Act 1967 (ITA 1967) by Finance Act 2021 [Act 833] which foreign income received in Malaysia by a person who is resident will be taxable effective from 1 January 2022.
Effective from 1 January 2022, generally, all types of foreign income received in Malaysia by a resident is subject to tax. Effective from 1 July 2022, foreign income received in Malaysia is subject to the prevailing tax rate. Foreign dividend income received in Malaysia by a resident company, resident LLP and resident individual in relation to a partnership business in Malaysia from 1 January 2022 until 31 December 2026 is exempted from tax subject to certain conditions.
