Malaysia

{"ftc_utility":"medium","fbar_trigger_notes":"Expats working in Malaysia and receiving salary into a Malaysian bank account will likely exceed the USD 10,000 FBAR threshold quickly. Malaysian ringgit accounts at local banks such as Maybank, CIMB, and Public Bank require FBAR reporting. FinCEN 114 must be filed annually if aggregate foreign account balances exceed USD 10,000 at any point during the year.","ftc_utility_reason":"Malaysia taxes employment income of residents at progressive rates up to 30%. For US expats earning Malaysian-sourced income who do not use FEIE, Malaysian taxes paid can be credited against US tax liability. However, the absence of a US-Malaysia tax treaty means no reduced withholding rates or mutual agreement procedures apply. FTC is most useful for higher-income earners whose Malaysian tax exceeds FEIE limits.","presence_day_count_notes":"MM2H visa holders and long-term employment pass holders can establish bona fide residence. The 330-day physical presence test is achievable as Malaysia does not restrict entry or exit for visa holders in ways that would interfere with day counts. Standard employment pass holders are tied to a single employer but may still meet the 330-day threshold.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":18000,"local_tax_rate_on_earned_income":0.25,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Foreign pension income remitted to Malaysia is treated as foreign-sourced income and is currently exempt for individuals under the general exemption. Malaysian government pension income is separately exempt under the Income Tax Act. Private sector employees participate in EPF (Employees Provident Fund); EPF withdrawals are tax-exempt for residents.","tax_rate":null,"locally_taxed":false},"social_security":{"notes":"No US-Malaysia tax treaty exists. US Social Security benefits received by a Malaysian tax resident are foreign-sourced income and fall under the general individual foreign-sourced income exemption, so they are not subject to Malaysian income tax in practice.","locally_taxed":false,"treaty_protection":false},"roth_distributions":{"notes":"Roth IRA distributions are foreign-sourced income for Malaysian purposes. Under the current individual foreign-sourced income exemption, these would not be taxed in Malaysia when remitted. No treaty exists to provide formal protection.","locally_taxed":false},"us_401k_ira_distributions":{"notes":"The US and Malaysia do not have an income tax treaty. 401k and IRA distributions received by a Malaysian tax resident would technically be foreign-sourced income. Foreign-sourced income remitted to Malaysia by individuals is currently exempt from Malaysian tax under a general exemption, though this policy has been subject to change. Without a bilateral treaty, there is no formal treaty protection. US residents abroad must still file US returns and may use FEIE or FTC regardless.","tax_rate":null,"locally_taxed":false,"treaty_protection":false}}

{"rate":0,"notes":"Malaysia does not levy a general capital gains tax on individuals. Real property gains tax (RPGT) applies to gains from disposal of real property and shares in real property companies, at rates of 0-30% depending on holding period and seller category.","details":{"tax_type":"Capital Gains Tax","country_name":"Malaysia","country_iso_code":"MYS","source_references":["PwC Malaysia Tax Summaries","LHDN (Inland Revenue Board of Malaysia)","Malaysia Finance Act 2023"],"last_verified_date":"2026-06-03","general_description":"No general CGT for individuals on securities or financial assets. RPGT applies specifically to real property disposals. From 2024, a capital gains tax of 10% applies to gains from disposal of unlisted shares by companies, but individual share disposals on Bursa Malaysia remain exempt.","corporate_capital_gains":{"rate":0.1,"tax_treatment":"Gains from disposal of unlisted shares by companies are subject to 10% CGT effective from 1 March 2024. Gains from disposal of listed shares remain exempt.","effective_date":"2024-03-01","listed_shares_rate":0,"unlisted_shares_rate":0.1},"individual_capital_gains":{"rate":0,"rpgt":{"notes":"Malaysian citizens and permanent residents disposing of property held more than 5 years pay 0% RPGT. Companies pay 5% after 5 years. Rates for shorter holding periods apply as listed above.","holding_period_4_years":0.2,"holding_period_5_years":0.15,"holding_period_under_3_years":0.3,"holding_period_over_5_years_company":0.05,"holding_period_over_5_years_individual":0},"tax_treatment":"No general CGT on individuals. Gains from disposal of securities on Bursa Malaysia are exempt. RPGT applies to real property disposals."}}}

{"notes":"Malaysia operates a single-tier dividend system. Dividends paid by Malaysian resident companies are exempt from tax in the hands of shareholders. No withholding tax applies to dividends paid to residents or non-residents under the single-tier system, which replaced the imputation system in 2014.","rates":[{"rate":0,"type":"exempt","notes":"Dividends from Malaysian resident companies under the single-tier system are tax-exempt for all recipients, resident and non-resident alike. Foreign-sourced dividends remitted to Malaysia by individuals are also exempt from 2022 onwards under a general exemption order, though this is subject to periodic review."}]}