Malaysia is a very tax welcoming country. That sounds like a strange thing to say when talking about taxes, but income tax is low. The highest rate is just 26% for residents and just 27% for non-residents.

Expatriates who are in Malaysia under the “Malaysia My Second Home” visa are not required to pay tax on their pension or income remitted from abroad. Whether you bring in $10 or $10 million dollars it isn’t taxable. However, if you are working in Malaysia or running a business in Malaysia any money you earn there will be deemed taxable. The rate you pay will be determined on how long you stay too. Those staying less than 180 days will be taxed at a different rate to those who stay more than 180 days. Those staying more than 180 days are deemed residents and will be taxed accordingly.

Sales tax has three rates: 5%, 10%, and 15%. The 5% rate applies to non-essential foodstuffs and most household building materials. The 10% to 15% is added to cigarettes and alcohol and most books. Certain tourist and sporting goods are tax exempt.

A GST (goods and services tax) of 6% has just been added across the board to most businesses in Malaysia. If your business doesn’t turn over more than $117,000 per annum you can’t claim it back, though you still have to pay it for certain items, and it’s something that you should keep in mind as it does add to the cost of running a business.

Malaysia, like most other countries these days, has an agreement for the avoidance of double taxation for several countries. For more information visit this site.

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