Foreign-sourced income taxed upon remittance into Malaysia
Budget 2022 has proposed that foreign-sourced income of all Malaysian tax residents which is received in Malaysia will no longer be exempted and will be taxed, with effect from 1 January 2022. The scope of income to be taxed covers all classes of income including passive income (e.g. dividends, interest, royalties, etc.) There will, however, be a transitional period from 1 January 2022 to 30 June 2022 where foreign-sourced income remitted to Malaysia will be taxed at the rate of 3% on gross income.