Malaysia

Corporate - Withholding taxes

Last reviewed - 13 January 2020

Corporations making payments of the following types of income are required to withhold tax at the rates shown in the table below. See Note 5 for other sources of income subject to WHT.

Recipient

WHT (%)

Dividends (1) Interest (2) Royalties (3a, 3b) Special classes of income/Rentals (4, 5)
Resident corporations 0 0 0  
Resident individuals 0 0/5 0  
         
Non-resident corporations and individuals:        
Non-treaty 0 0/15 10 10
Treaty:        
Albania 0 0/10 10 10
Australia 0 0/15 0/10 0
Austria 0 0/15 10 10
Bahrain 0 0/5 8 (3c) 10
Bangladesh 0 0/15 0/10 10
Belgium 0 0/10/15 10 10
Bosnia and Herzegovina * 0 0/10 8 10
Brunei 0 0/10 10 10
Cambodia* 0 0/10 10 10
Canada 0 0/15 0/10 (3d) 10
Chile 0 0/15 10 5
China, People’s Republic of 0 0/10 10 10
Croatia 0 0/10 10 10
Czech Republic 0 0/12 10 10
Denmark 0 0/15 10 10
Egypt 0 0/15 10 10
Fiji 0 0/15 10 10
Finland 0 0/15 0/10 10
France 0 0/15 0/10 10
Germany 0 0/10 7 7
Hong Kong 0 0/10 8 5
Hungary 0 0/15 10 10
India 0 0/10 10 10
Indonesia 0 0/10 10 10
Iran 0 0/15 10 10
Ireland, Republic of 0 0/10 8 10
Italy 0 0/15 0/10 (3d) 10
Japan 0 0/10 10 10
Jordan 0 0/15 10 10
Kazakhstan 0 0/10 10 10
Korea, Republic of 0 0/15 0/10 10
Kuwait 0 0/10 10 10
Kyrgyzstan 0 0/10 10 10
Laos 0 0/10 10 10
Lebanese Republic 0 0/10 8 10
Luxembourg 0 0/10 8 8
Malta 0 0/15 10 10
Mauritius 0 0/15 10 10
Mongolia 0 0/10 10 10
Morocco 0 0/10 10 10
Myanmar 0 0/10 10 10
Namibia 0 0/10 5 5
Netherlands 0 0/10 0/8 8
New Zealand 0 0/15 0/10 (3e) 10
Norway 0 0/15 0/10 (3f) 10
Pakistan 0 0/15 0/10 10
Papua New Guinea 0 0/15 10 10
Philippines 0 0/15 0/10 10
Poland 0 0/15 0/10 10
Poland (new) * 0 0/10 8 8
Qatar 0 0/5 8 8
Romania 0 0/15 0/10 10
Russian Federation 0 0/15 10 10
San Marino 0 0/10 10 10
Saudi Arabia 0 0/5 8 8
Senegal * 0 0/10 10 10
Seychelles Republic 0 0/10 10 10
Singapore 0 0/10 8 5
Slovakia 0 0/10 10 5
South Africa 0 0/10 5 5
Spain 0 0/10 7 5
Sri Lanka 0 0/10 10 10
Sudan 0 0/10 10 10
Sweden 0 0/10 8 8
Switzerland 0 0/10 0/10 10
Syria 0 0/10 10 10
Thailand 0 0/15 0/10 (3f) 10
Turkey 0 0/15 10 10
Turkmenistan 0 0/10 10 0
United Arab Emirates 0 0/5 10 10
United Kingdom 0 0/10 8 8
Uzbekistan 0 0/10 10 10
Venezuela 0 0/15 10 10
Vietnam 0 0/10 10 10
Zimbabwe 0 0/10 10 10

Notes

* Treaties pending ratification

Restricted tax treaties dealing with taxation of specific transport operations in international traffic have also been signed with Argentina and the United States (US).

  1. Dividends:
    • Malaysia has no WHT on dividends in addition to tax on the profits out of which the dividends are declared. Some treaties provide for a maximum WHT on dividends should Malaysia impose such a WHT in the future.
  2. Interest:
    • Interest on loans given to or guaranteed by the Malaysian government is exempt from tax.
    • Interest paid to a non-resident by a commercial or merchant bank operating in Malaysia is also exempt from tax.
  3. Royalty:
    1. Approved royalty payments under certain treaty provisions are exempt from WHT.
    2. Royalty income received by non-resident franchisors under franchised education scheme programmes by the Ministry of Education is exempted from tax.
    3. Royalty does not include payments in respect of the operation of oil or gas wells, or the extraction of mineral deposits or other natural resources.
    4. Royalty does not include amount paid in respect of motion picture films or of tapes for radio or television broadcasting.
    5. Royalty does not include natural resource royalties.
    6. Royalty does not include royalty paid in respect of (literary or artistic copyrights - Norway only) or of motion picture films or of tapes for television (or radio - Thailand only) broadcasting, or of the operation of a mine, oil well, quarry, or any other place of extraction of natural resources or of timber or other forest produce.
  4. Special classes of income:
    • Contract payments to non-resident contractors in respect of services under a contract project are subject to a 13% deduction of tax (10% on account of the contractors’ tax liability and 3% on account of their employees’ tax liability). This deduction of tax at source does not represent a final tax, which is determined upon the filing of the tax return.
    • Payments made to non-residents in respect of the provision of technical services performed in Malaysia and rental of movable properties are subject to a 10% WHT (unless exempted under statutory provisions for purpose of granting incentives).
  5. Other income:
    • WHT is also applied in respect of income of a non-resident from sources other than the following:
      • Sources shown in the preceding table.
      • A business source.
      • An employment source.
    • The rate of WHT on such income is 10%. This is applicable on payments made to residents of all the treaty partners listed, except for certain countries (including Germany, Turkmenistan, Bosnia and Herzegovina, Senegal, and Jordan) where the respective tax treaties have provided for such type of income to be taxed only in the contracting state in which the recipient is resident.