triage

Do MM2H visa holders need to file a tax return every year? Do dependent spouses need to file separately? All my income is foreign or bank interest.

Can anyone recommend a tax agent with good English and MM2H experience?

SushiFan

I'm not a tax expert, but my understanding is that you only have to file a tax return if you have any source of taxable income from within Malaysia (e.g. salary, rental income, etc.)
This article might be of help (they write an update every year): https://ringgitplus.com/en/blog/inco...0-ya-2019.html

triage

I found this:

Income Tax - My (MM2H) Sdn Bhd - Malaysia My Second Home

"Does the participant have to submit any personal tax declaration to the Income Tax Department of Malaysia, like Malaysians have to?

Yes."

But I don't know how a "personal tax declaration" differs to a return/filing...

SushiFan

Different words for the same thing.

The website you quoted from seems last updated in 2018. I'm not sure whether it is still being actively maintained, or is abandoned.

StillSearching

I am not sure that there is any difference if you are an MM2Her. As far as one accountant is saying we need to pay a tax on the earned bank interest. But you pay it only for the year when your FD matures. Also you need to get your tax ID first. An accountant can help with this.

Gunnar45

From 'Ringgit Plus' website: (https://ringgitplus.com/en/blog/inco...d%20from%20tax)

Tax Exemptions
Income that you don’t need to pay taxes for. This type of income is excluded from counting as your taxable income. For example, the interest you earn off a fixed deposit or certain dividend payments are fully exempted from income tax. Things like parking and childcare allowances (which fall under Perquisites above) can also be exempted from tax.

StillSearching

Thank you, Gunnar45
Very good!

RedApe

Not all Malaysians have to file personal tax declarations either. Only those that earn personal income in Malaysia above a certain level or those that desire to recover withdrawals or previous year tax payments may wish to if they fall below the tax reporting level.

My understanding is that you do not need to file a tax report if you exclusively have foreign income, pension or exempt sources from within Malaysia (savings accounts in banks are exempt). Some insidividuals may wish to make a tax declaration for other reasons. They may be eligible for some exclusions on their home country tax filing if they have established tax residency abroad, or if they have paid foreign taxes (or perhaps in some cases foreign expenses). The latter might be provable in other ways, however.

I'm not even sure if you can register for a tax number without an employer however. Likely you will need to go personally into a HASIL Office.

Lembaga Hasil Dalam Negeri

"Scope of Taxation An individual who is resident in Malaysia is taxable on all income accruing in or derived from Malaysia and on income received from outside Malaysia. The scope of taxation of an individual depends on his resident status." Unclear if the previous refers to a tax-resident or to a Permanent Visa Resident.

Lembaga Hasil Dalam Negeri

Gunnar45

I think one gets a Malaysian tax number if one buys a property in Malaysia.

Epicurious

My understanding is that it is not necessary to register with LHDN if you have no taxable income earned in Malaysia. Bank interest is not taxable. I registered anyway because I wanted a tax number to put on CRS forms that are demanded by many non-Malaysian banks now. I then submitted a zero tax return online - it's all very simple.

triage

How did you register? Online or walking into LHDN office? Do you use an accountant?

Epicurious

Register online. But before you can fill in a tax return online you have to go in person to LHDN to pick up a PIN code. I guess they want to check that you're a real person.

No way you need an accountant for a zero return.

Regarding taxation in Malaysia of foreign-sourced income, I found the following:
FOREIGN-SOURCED INCOME - MALAYSIAN INCOME TAX
Sources are quoted and the article is up to date.

EDIT: This is also well worth reading:
TaxPlanning: What is taxable in Malaysia?

IanBlakeley

I've registered for Malaysian tax number and now told the UK I am resident here. I file the Malaysian form online it really is fairly simple and much less arduous than the UK version I guess 30 minutes all done and dusted. I still have to file in the UK too because I have income generated there but my Malaysian accounts are out of scope of the UK with the change of residence which simplifies that return.

stepen

Why do you need to file a tax return?

IanBlakeley

Once you have a tax number you get a request to file. I've not looked into whether as in the UK there's a penalty for failing to do so as the task is not onerous.