First question, I think yes, taxable in MY.
Second question, if the source country doesn't tax it because that's how their system is structured or the amount doesn't reach the taxable threshold, then yes, not taxable in MY.
Third question:
Seems pretty clear to me. Just my inexpert optinion, DYOR.

Unworkable and unreasonable indeed. But such behaviour is not unknown from tax authorities! Their universal attitude is - you are guilty until proven innocent, so prove your innocence, or else pay up. It's not their practice to use common sense or practicality in my experience. They'll hand you the responsibility to dig through years of dusty complex records and provide them with irrefutable evidence that you are in the right. Sorry if this sounds like a rant but when I retired from my job back home under a voluntary severance scheme (along with 50 colleagues) the tax authorities decided to interpret an element of our pension provisions as liable for tax (which was rubbish). Attempting to reason with them on an individual basis led absolutely nowhere. We ended up taking a class action lawsuit which went on for 6 years and cost us all lots of money. In the end they backed down and refunded us, but the stress and hassle of it proved to me that there is no 'reason' or 'integrity' in the behaviour of certain tax authorities, and as a lone individual you don't stand a snowballs chance in hell of winning. They never admitted fault by the way, and never got to a final Court hearing, they just fired out a letter saying they were refunding us.

This new situation here inMalaysia is murky and confused, and no matter how we think things 'should' be interpreted the final say goes to a faceless individual in a tax office and our only option is to pay up. Or go to Court. Not recommended.

My own strategy will probably be to 'remit' a token sum from a couple of different sources that I think would meet the exemption criteria (as I interpret them) and see what they say. That would then - presumably - mean more funds could be remitted with the same treatment.
But remember, at the end of the day, this situation will change again in less than 4 years when the current 'exemption' on 'taxed' remittances expires and they bring in a blanket tax on ALL remittances, taxed abroad or not.

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Are you going to file a tax return to claim this? I'd just ignore it until someone approach me. They don't even know if we're tax resident or not.

Stepen, I have to deal with them on an annual basis to PROVE my tax residency here. I need a Malaysian Tax Residency Cert every year to show the taxman back home that I'm not resident there and am resident in a country with a DTA, so they'll keep their sticky fingers off my pension.
So much for keeping a low profile.
I'm never comfortable with the notion of burying my head in the sand as regards taxes anyhow. The fallout from being caught fiddling is too horrendous.
A lot of my old job revolved around risk management. My natural attitude to risk is to seek ways to blunt its effect if I can't completely avoid it. Hence I've already arranged my Thai LTR Visa. That's my bolthole now.
I will indeed make every effort to confront the remittance issue as imaginatively as I can, and I'll assume nothing. It's better for me at the end of the day to know clearly where I stand, and if the result is finally unacceptable, then I'm gone.

hi been thinking about smm2h then found that foreign income would be taxed which put me off the idea, then i found in theedgemalaysia.com/node/730798 which indicates that foreign sourced income is not taxed till 2036, anyone able to confirm?

That is correct. It was, until recently, the plan to tax foreign income as of 2026. But a few months ago it was decided by the government to postpone that plan by ten years. Hence, taxation of foreign income for residents has been postponed to 2036. You can read more details here: https://www.pwc.com/my/en/publicatio...t-edition.html

thanks

That's not entirely correct. Foreign source income is taxed when remitted to Malaysia. However there is an exemption, that was recently extended until 2036, that says you don't have to pay tax in Malaysia if the income was subject to tax in another country. There are also other conditions, quite broad, like if the income from from a tax free country like Brunei then it's also not taxed in MY.
However, in some cases, for example if you have income from a country that is not taxed because you don't live there, then it might be taxable in Malaysia. I say might because it's not clear from the wording. One exemption says that if it's not taxed in the other country because of its tax system then that's a valid reason for exemption.

see from page 25:
https://www.hasil.gov.my/media/fzofh...-june-2024.pdf

so do you know how a sipp pension would be affected?

The way how @stepen explains it it would mean the following: if the sipp withholds UK taxes before paying monthly/yearly/whatever amount to you then you don't need to pay tax in Malaysia over the money you receive. However, if the sipp does not withhold any tax in the source country (UK, I presume), then you are to declare this income to the Malaysian tax office and pay tax in Malaysia.

so the sipp wrapper itself allows funds to grow tax free, however they are taxable in the uk when you withdraw them, but if i understand what is being said correctly, if you are resident in Malaysia you would declare this income to the Malaysian govt.

but as this is pension income would this not be exempt from any foreign income source regulations anyway as malaysia doesnt tax overseas pensions?

Correct. If you pay tax over these withdrawals in the UK (either sipp transfers it to the UK government, or you pay the tax in the UK) then you don't need to declare the amount you receive in Malaysia to the Malaysian government. On the other hand, if you do not pay tax to the UK government over these withdrawals then you are supposed to declare these withdrawals as income to the Malaysian government.

As far as I know there is no exemption for overseas pensions in Malaysia's tax regulation, unless specifically agreed on in a bilateral agreement between another country and Malaysia. I don't know whether such an agreement exists between the UK and Malaysia.

if i understood it correctly mm2h gives tax exemption to pensions

this is what i read "Participants are bound by the policies, systems and regulations of taxes of this country and they do not have exemption qualifications as granted to Diplomatic Missions in Malaysia. However, tax exemption is given to pension remitted in Malaysia. Participants are required to obtain the endorsement from the Authorities in their country of origin as to the total amount of yearly pension received. A copy of this letter has to be submitted in their application for tax exemption."

though reading it not sure how that would work in terms of letter from authorities when pension withdrawal amount is determined by individual

Yeah, those Malaysian texts are a bit vague, and have been discussed multiple times over how to interpret them. It seems as if they do not relate to private (or individual) pension plans, but only apply to old-age pensions that you receive from a non-Malaysian government. That impression is given by the wording that "Authorities in their country" must specify how much yearly pension you receive. Statements by e.g. a pension funds, or an investment fund, seem to be excluded from this.