Tax residence status of individuals
An individual is regarded as tax resident if he meets any of the following conditions, i.e. if he is:
- in Malaysia for at least 182 days in a calendar year;
- in Malaysia for a period of less than 182 days during the year but that period is linked to a period of physical presence of 182 or more consecutive days in the following or preceding year. Temporary absences from Malaysia due to the following reasons are counted as part of the consecutive days, provided that the individual is in Malaysia before and after each temporary absence:
- business trips
- treatment for ill-health
- social visits not exceeding 14 days
- in Malaysia for 90 days or more during the year and, in any 3 of the 4 immediately preceding years, he was in Malaysia for at least 90 days or was resident in Malaysia; or
- resident for the year immediately following that year and for each of the 3 immediately preceding years.
Rates of tax
1. Resident individuals
Chargeable income (RM) |
YA 2024 / YA 2025 |
|
Tax (RM) |
% on excess |
|
5,000 |
0 |
1 |
20,000 |
150 |
3 |
35,000 |
600 |
6 |
50,000 |
1,500 |
11 |
70,000 |
3,700 |
19 |
100,000 |
9,400 |
25 |
400,000 |
84,400 |
26 |
600,000 |
136,400 |
28 |
2,000,000 |
528,400 |
30 |
The following categories of individuals are taxed at 15% on the employment income:
- A qualified person (defined) who is a knowledge worker residing and working in Iskandar Malaysia and employed with a designated company engaged in a qualified activity in that specified region. (Applications received by Iskandar Regional Development Authority (IRDA) by 31 December 2024).
- An approved individual under the Returning Expert Programme who is a resident. The incentive is for 5 consecutive YAs. (Applications received by Talent Corporation Malaysia Berhad by 31 December 2027).
- A non-citizen receiving a monthly salary of not less than RM25,000 and holding key / C-Suite positions in a company that has been granted relocation tax incentive under the PENJANA initiative (limited to 5 non-citizen individuals per company). The incentive is for a period of 5 consecutive years. (Applications received by MIDA by 31 December 2024).
- A non-citizen receiving a monthly salary of not less than RM25,000 and holding key / C-Suite positions in a company that has been granted relocation tax incentive under the PENJANA initiative (limited to 5 non-citizen individuals per company). The incentive is for a period of 5 consecutive years. (Applications received by MIDA by 31 December 2024).
- Individual knowledge workers (including Malaysians) working in Forest City Special Financial Zone (commencement date to be announced).
2. Non-resident individuals
Income other than the above Types of income |
Rate (%) |
Public entertainer’s professional income |
15 |
Interest |
15 |
Royalties |
10 |
Special classes of income:
|
10 |
Dividends (single-tier) |
Exempt |
Business income, employment income, discounts, rents, premiums, pensions, annuities, other periodical payments and other gains or profits (include payments received for part-time / occasional broadcasting, lecturing, writing, etc.) |
30 |
Income other than the above |
10 |
Foreign film actors and movie crews who carry out filming in Malaysia |
0-10 |
3. Dividend Tax
Effective YA 2025, a 2% tax will be imposed on the excess of RM100,000 dividend income received by individual shareholders (resident and non-residents, and individuals who hold shares through nominees) from resident companies. The tax is imposed on the chargeable dividend income after eligible tax deductions.
Personal reliefs for resident individuals
Types of relief |
YA 2024 / YA 2025 (RM) |
Self |
9,000 |
Disabled individual - additional relief for self |
6,000 (7,000 w.e.f. YA 2025) |
Spouse |
4,000 |
Disabled spouse - additional spouse relief |
5,000 (6,000 w.e.f.YA 2025) |
Child: |
|
a) per unmarried child |
|
i) below 18 years old |
2,000 |
ii) over 18 years old: - receiving full-time instruction at school, college, university or similar establishment; OR |
2,000 |
- receiving full-time instruction at an establishment of higher education (approved by the government) in respect of: - diploma level and above in Malaysia, or
|
8,000 |
b) per physically / mentally disabled child: |
|
- unmarried, |
6,000 (8,000 w.e.f. YA 2025) |
- AND IF over 18 years of age receiving full-time instruction at an establishment of higher education (approved by the government) in respect of: |
additional 8,000 |
Life insurance premiums or voluntary contributions to Employee Provident Fund (EPF) or for both |
3,000* |
Voluntary or obligatory EPF contributions and contributions to pension schemes by individuals or public servants |
4,000* |
Private retirement scheme contributions and deferred annuity scheme premiums (until YA 2025, extended to YA 2030) |
3,000* |
Insurance premiums for education or medical benefits |
3,000* (4,000 w.e.f. YA 2025) |
Expenses for parents (w.e.f. YA 2025 include grandparents) on medical treatment, dental treatment, complete medical examination (w.e.f. YA 2025 include vaccination) (limited to RM1,000), special needs or carer expenses (evidenced by medical certification) |
8,000* |
Employee’s contribution to Social Security Organisation (SOCSO) |
350* |
Medical expenses for:
i. all self-testing medical devices registered with the Medical Device Authority, such as glucometer, blood pressure monitor and thermometer; and ii. fees for disease detection examination conducted at clinic or hospital, such as blood test, ultrasound, mammogram and pap smear;
|
10,000* |
Fee expended for:
|
7,000* |
Purchase of supporting equipment for self (if a disabled person) or for disabled spouse, child or parent |
6,000* |
Lifestyle relief consolidated with the following:
|
2,500*
|
Purchase of breastfeeding equipment (once in every 2 YAs) |
1,000* |
Fees paid to childcare centre and kindergarten (until YA 2024, extended to YA 2027) |
3,000* |
| Deposit for child into the Skim Simpanan Pendidikan Nasional account (until YA 2024, extended to YA 2027, claimable by either parent) | 8,000* |
Sports Equipment and Activities relief for own use, spouse or child (w.e.f. YA 2025 include parents):
|
1,000* |
Costs related to electric vehicle charging facilities, including installation, rental, hire-purchase of equipment, or subscription fees, (w.e.f. 2025 include purchase of food waste composting machine for household use) (until YA 2027) |
2,500* |
Housing loan interest paid for the first 3 consecutive YAs on residential property with value of: (i) RM500,000 and below: (ii) RM500,000 - RM750,000: (Effective for sale and purchase agreement executed between 1 January 2025 to 31 December 2027) |
7,000* 5,000* |
* Maximum relief
Tax rebates for resident individuals
Types of rebate |
YA 2024 / YA 2025 (RM) |
Individual’s chargeable income does not exceed RM35,000 |
400 |
If husband and wife are separately assessed and each chargeable income does not exceed RM35,000 |
400 (each) |
If husband and wife are jointly assessed and the joint chargeable income does not exceed RM35,000 |
800 |
Rebate for Zakat, Fitrah or other Islamic religious dues paid |
Actual amount expended |
Rebate for departure levy paid for performing umrah and pilgrimage to holy places. |
Actual amount expended (twice in a lifetime) |
The above rebate granted is deducted from tax charged and any excess is not refundable.
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