The calculation of the non-resident relief may be illustrated below :



Malaysian income taxed at non-resident rate


Less: Malaysian income x Income tax payable on world income as if the individual


. . . . World income ......., were a resident


Non-resident relief




Thus, the tax payable by the non-resident individual is RM xx.

An individual claiming non-resident relief shall make his claim in the prescribed form and shall furnish such further particulars as the Director General may require.

"Aggregate income" in relation to an individual claiming the non-resident relief for a year of assessment means his total income, accruing in or derived from Malaysia or elsewhere, computed in accordance with the provisions of the Income Tax Act, 1967 (the Act).

Where an individual and his wife elect for combined assessment under Section 45(2) of the Act, in arriving at the aggregate income, the reference to total income shall include the total income of the wife of the individual.

The above amendment is effected through a new Section 130. In view of the amendment to Section 130, Paragraph 8 to Schedule 7 (bilateral credit) in which certain subsections of the existing Section 130 have relevance, is consequently proposed to be deleted.

To encourage Malaysian trading companies to be actively involved in international trade, it is proposed that any company approved as an International Trading Company be given a 5 year income tax exemption of 70% of its statutory income arising from increased export sales. For the purpose of this incentive, export sales do not include trading commissions and profits derived from trading at the commodity exchange.


This report is reproduced with permission from Kassim Chan Tax Services Sdn Bhd (36421-T) and Deloitte Touche Tohmatsu Tax Services Sdn Bhd (151497-P). 7th Floor, 3 Cangkat Raja Chulan 50200 Kuala Lumpur, Malaysia or P.O.Box 11151, 50736 Kuala Lumpur, Malaysia.
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