Withholding Tax Malaysia

The amount withheld from income received by a non-resident (payee) and paid to the Malaysian Inland Revenue Board is known as withholding tax or LHDN withholding tax. This amount has to be paid to LHDN. Simply put, if you pay non-local suppliers, you must withhold a set percentage of the invoiced amount and pay LHDN withholding tax, leaving the remainder to be remitted to your foreign vendor.

Withholding tax in Malaysia is not new; it goes back to the Income Tax Act of 1969. It includes payments such as:

Each payment will have a separate withholding tax rate, and if Malaysia and the country in which the non-resident is a tax resident have a double tax agreement, the non-resident can benefit from a lower tax rate.

The non-compliance includes the following:

With the exception of non-resident public performers, all withholding tax payments must be made using the appropriate payment forms along with copies of invoices issued by the NR payee and copies of payment documents as proof of the date of payment/credit to the NR payee.

The relevant payment forms, the invoices issued by the non-resident payee, and a copy of the payment documents as proof.

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withholding tax malaysia 2022

How To File A Withholding Tax Malaysia 2022 And Pay It?

Telegraphic transfer, Giro, Interbank, and Wire transfer are all options for royalties and a special class of income payments. The payment must be accompanied by the relevant payment forms and invoices of the non-resident recipient and copies of payment documents as confirmation.

How To Pay Withholding Tax Malaysia Online?

LHDN has created an online payment system called e-TT, allowing consumers to make tax payments from April 1, 2022. e-TT is a payment identification method that uses a virtual account number (VA).

Taxpayers wishing to use the E-TT system must complete the following steps:
withholding tax malaysia

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