MM2H Tax Filing

Old Nov 9th 2020, 3:35 am
  #1  
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Default MM2H Tax Filing

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?
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Old Nov 9th 2020, 11:25 am
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Default Re: MM2H Tax Filing

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
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Old Nov 9th 2020, 11:47 am
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Default Re: MM2H Tax Filing

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...
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Old Nov 10th 2020, 8:14 am
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Default Re: MM2H Tax Filing

Originally Posted by triage View Post
But I don't know how a "personal tax declaration" differs to a return/filing...
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.
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Old Nov 23rd 2020, 4:59 am
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Default Re: MM2H Tax Filing

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.
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Old Nov 23rd 2020, 6:37 am
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Default Re: MM2H Tax Filing

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.

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Old Nov 24th 2020, 1:23 am
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Default Re: MM2H Tax Filing

Thank you, Gunnar45
Very good!
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Old Nov 27th 2020, 12:20 am
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Default Re: MM2H Tax Filing

Originally Posted by triage View Post
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...

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
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Old Nov 27th 2020, 12:29 am
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Default Re: MM2H Tax Filing

I think one gets a Malaysian tax number if one buys a property in Malaysia.
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Old Nov 27th 2020, 12:45 am
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Default Re: MM2H Tax Filing

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.
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Old Nov 27th 2020, 12:47 am
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Default Re: MM2H Tax Filing

Originally Posted by Epicurious View Post
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.
How did you register? Online or walking into LHDN office? Do you use an accountant?
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Old Nov 27th 2020, 1:03 am
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Default Re: MM2H Tax Filing

Originally Posted by triage View Post
How did you register? Online or walking into LHDN office? Do you use an accountant?
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
Foreign-sourced income is NOT subject to tax in Malaysia, except for certain activities, such as banking, insurance, and air and sea transport operations.
Sources are quoted and the article is up to date.

EDIT: This is also well worth reading:
TaxPlanning: What is taxable in Malaysia?
Income received in Malaysia from outside MalaysiaIf income (not capital gains) derived from outside Malaysia is remitted to Malaysia, that is, sent back to or received in Malaysia, it is conceptually subject to tax in Malaysia, but Malaysia has introduced law (Schedule 6, Paragraph 28) to specifically exempt such income. The rationale for this exemption is to encourage the inward remittance of foreign income.

Last edited by Epicurious; Nov 27th 2020 at 1:25 am.
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Old Dec 5th 2020, 3:49 am
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Default Re: MM2H Tax Filing

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.
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Old Dec 6th 2020, 10:14 pm
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Default Re: MM2H Tax Filing

Originally Posted by IanBlakeley View Post
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.
Why do you need to file a tax return?
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Old Dec 7th 2020, 12:03 am
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Default Re: MM2H Tax Filing

Originally Posted by stepen View Post
Why do you need to file a tax return?
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.
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