The government was scheduled to start collecting the tax on overseas income this year, but the measure was temporarily suspended on December 30 last year!
The government was scheduled to start collecting tax on repatriated overseas income in 2022, but decided to postpone the collection of tax on repatriated overseas income and exempt the amount from tax until December 31, 2026.
This means that all overseas income of individuals and dividend income of corporations and limited liability partnerships will be exempt from tax. The exemption is available to individuals with overseas income, but this does not include those who operate a partnership in Malaysia.
The Inland Revenue Department (LHDN) has officially announced the termination of the special income remittance scheme (PKPP) for taxing overseas income, which was scheduled to be launched by the LHDN this year for a period of 6 months from 1 January to 30 June 2022, according to its latest announcement on 11 March.
As long as people report overseas income remitted to Malaysia during this period, they will only be taxed at a rate of 3%. No audit, investigation or penalty will be imposed by the relevant authorities on the income reported to be remitted to Malaysia during the PKPP period. The Revenue Department will accept the declared income information in good faith.
