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Labuan: Personal Taxation

Residence and Liability for Taxation

Residents are subject to tax on Malaysian-source income and on foreign-source income received in Malaysia (ie it is a territorial basis of taxation). Non-residents are subject to tax on Malaysian-source income only.

Individuals are considered resident in any of the following circumstances:

  • They are physically present in Malaysia for 182 days or more during the calendar year;
  • They are physically present in Malaysia for less than 182 days during a calendar year, but that time is connected to physical presence of at least 182 consecutive days in either the preceding or succeeding calendar year;
    • Periods of temporary absence are considered part of a period of consecutive presence if the absence is related to the individual's service in Malaysia, personal illness, illness of an immediate family member or personal trips of 14 days or less.
  • They are in Malaysia during the calendar year for at least 90 days and have been resident or present in Malaysia for at least 90 days in any three of the four preceding years.
  • They have been resident for the three preceding calendar years and will be resident in the following calendar year. This is the only case in which an individual is considered resident though not physically present in Malaysia.

 

 

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