taxation

Withholding Tax Service Malaysia

taxation

Withholding Tax Service Malaysia

Withholding tax is an amount that is withheld by the payer, who is incharge of making payment on the income earned by a payee, that is to be paid to the Inland Revenue Board of Malaysia. The 1967 Income Tax Act states that where a payer is liable to make payment in the different payment types, the payer must deduct withholding tax at the prescribed rate, which will then be paid to the Director General of Inland Revenue within a month.

Do note that all withholding tax payments must be made with the proper and designated payment forms, that are to be completed and attached together with a copy of the invoices that have been issued by the payee, along with a copy of the payment documents that would act as the proof of payment date.

Note the withholding tax percentage based on the below payment types:
Interest Paid to Non-Resident Persons: 15%
Royalty Paid to Non-Resident Persons: 10%
Special Classes of Income Paid to Non-Resident Persons: 10%
Contract Payments to Non-Resident Contractors: 10% + 3%
Non-Resident Public Entertainers: 15%
Income under Section 4(f): 10%

What happens when you don’t deduct and remit tax?

The Inland Revenue Board may impose a late payment penalty at the rate of 10% of the amount of the unpaid tax. Any expense will be disallowed, since the deduction and no capital allowances will be available on the qualifying capital expenditure that was paid to a non-resident. The Inland Revenue Board can also recover the withholding tax and the penalties from the payer as a debt that is due to the government.

Withholding tax is a complicated and often difficult task to grasp. So if you are looking for a reliable and professional team that has years of experience in withholding tax services in Malaysia, you have come to the right place. Get in touch with us now and we will schedule an appointment to meet with you soon.

Are you interested in partnering with the experienced professionals at Klozer for witholding tax services?

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