Tax Rates in Malaysia

TAX RATES > Malaysia Tax Rates

Malaysia Tax Rates

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Malaysia Income Tax rates for Individuals

Malaysia individual income tax rates are progressive, up to 26%. Individuals who do not meet residence requirements are taxed at a flat rate of 26%.

Taxable Income RM Tax Rate Tax Payable RM

on the first 2,500 0% 0

on the next 2,500 1% 25

on the first 5,000 25

on the next 5,000 3% 150

on the first 10,000 175

on the next 10,000 3% 300

on the first 20,000 475

on the next 15,000 7% 1,050

on the first 35,000 1,525

on the next 15,000 12% 1,800

on the first 50,000 3,325

on the next 20,000 19% 3,800

on the first 70,000 7,125

on the next 30,000 24% 7,200

on the first 100,000 14,325

on the next 50,000 26% 13,000

on the first 150,000 27,325

on the next 100,000 26% 26,000

on 250,000 53,325

Above 250,000 26%

Basis – Individuals are taxed on income derived from Malaysia. Foreign-source income is not taxable in Malaysia.

Residence – An individual is considered tax resident if he/she is in Malaysia for 182 days or more in a calendar year. Alternatively, residence may be established by physical presence in Malaysia for a mere day if it can be linked to a period of residence of at least 182 consecutive days in an adjoining year.

Tax Filing status – A married couple living together may opt to file a joint or separate assessment.

Taxable income – Resident individuals are taxed at progressive rates ranging from 0% to 26%. Employment income includes most employment benefits whether in cash or in kind.

Capital gains – Capital gains are not taxed in Malaysia, except for gains derived from the disposal of real property or on the alienation of shares in a real property company. The real property gains tax, which applied to such gains, had been suspended since 1 April 2007, but is reinstated at a rate of 5% as from 1 January 2010.

Tax Deductions and tax allowances – Various allowances and personal deductions are available.

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