Malaysia Foreign Income Tax Exemption Checker

Not for most individuals until the end of 2036. Malaysian tax residents who bring foreign income into Malaysia between 1 January 2022 and 31 December 2036 are exempt, as long as the income was subject to tax in the country it came from. Non-residents are not taxed on foreign income at all.

All kinds: overseas employment income, business profits, dividends, interest, rent, royalties, pensions and other income. The one exception for individuals is foreign income received through a partnership business in Malaysia.

The income must have been taxed abroad, by income tax or withholding tax. The condition still counts as met if the other country doesn't tax that income because of how its tax system works, because it falls below that country's tax-free threshold, or because of a tax incentive. Keep proof either way.

No, if you do the work while you are in Malaysia. Pay for work done in Malaysia is Malaysian-sourced income, wherever the employer is and wherever the money is paid. If you are a tax resident it is taxed at the normal resident rates; if not, at a flat 30%.

No. The 2% tax on dividends above RM100,000 a year, from year of assessment 2025, applies to dividends from Malaysian companies. Foreign dividends stay under the exemption until 2036.

The LHDN guideline was written in June 2024. The exemption was later extended to 31 December 2036 by an order gazetted in December 2024 (P.U.(A) 451/2024).