Good news for non-Malaysian residents carrying out offshore technical and installation services outside Malaysia – income derived from those services is now exempted from withholding tax.
On 24 October 2017, the Minister of Finance II, YB Datuk Seri Johari bin Abdul Ghani, announced that a Ministerial Exemption would be given to the Withholding Tax on services performed overseas, effective 6 September 2017.
This is applicable to payments to non-residents for services under sections 4A(i) and (ii) rendered outside Malaysia, which largely refers to technical or installation services.
The following is an excerpt from the Gazette:
The Minister exempts a person not resident in Malaysia from the payment of income tax in respect of income derived from Malaysia in relation to –
- Services referred to in paragraph 4A(i) of the Income Tax Act 1967; or
- Technical advice, assistance or services referred to in paragraph 4A(ii) of the Income Tax Act 1967
Click here to see a copy of the gazette: Income Tax (Exemption) (No.9) Order 2017