Tax Incentives for Malaysian Tax Resident Companies

When we talk about running a company, topics such as business strategy and long term plans, daily operations, sales forecast, marketing budget etc would arise. You rarely hear about tax resident status and tax incentives.

If you don’t talk about it, there’s not much awareness on it and when people aren’t aware, they could miss out on A LOT of savings 💰

Because if you are running a tax resident company in Malaysia, you are entitled to the wide range of tax incentives offered by the government such as tax exemptions, allowances, enhanced tax deductions and more. These are all provided to incentivize economic activities and attract more investment into the country.

Tax Resident Status in Malaysia

Every citizen of Malaysia is automatically defined as a tax resident of the country. However, foreigners who live in Malaysia, must have been within the Malaysian territorial borders for either more than 182 days of a calendar year or a rolling 12-month period in order to be regarded as a tax resident.

Furthermore, a non-citizen would also be regarded as a tax resident if the foreigner in question spends 90 days or more of the current tax year in Malaysia as well as 90 days or more in 3 of the previous 4 years.

For one’s tax residence status in Malaysia to be verified and thus allow one to claim credits through tax treaties, one must apply for a Certificate of Residence in Malaysia.

We have provided a summary of the main tax incentives for some of the industry sectors.