Malaysia Digital Economy Corporation Sdn Bhd (MDEC) has recently announced on its website that the withholding tax (WHT) exemption on certain types of income received by a non-resident company from an approved Multimedia Super Corridor (MSC) Malaysia Status company will only take effect until 31 December 2019.
The WHT exemption is only granted to the companies that fulfill the criteria as stated in the Income Tax (Exemption) (No. 13) Order 2005 [P.U.(A)102/2005] (“Order”). This includes fees for technical advice or technical services, licensing fees in relation to technology development and, interest on loans for technology development.
Effective from 1 January 2020, the WHT exemption granted under the Order is no longer in effect. Therefore, all MSC Malaysia Status companies are subjected to withholding tax as per requirements under the Income Tax Act 1967.
