REFERRING to the report “Declare overseas income or face taxman” (The Star, July 9), the statement by Deputy Finance Minister Datuk Amiruddin Hamzah that Malaysians who fail to declare their incomes from overseas sources may face “unfriendly” reception from the taxman appears to contradict the Inland Revenue Board’s (IRB) advisory.
Malaysia adopts a territorial-based approach to taxation wherein only income derived from Malaysia is taxable in Malaysia with exception to trades involving banking, insurance and sea or air transportation. This is stipulated in Schedule 6 of the Income Tax Act 1967, which states that income derived from sources outside Malaysia is exempt from tax.
Former second finance minister Datuk Seri Johari Abdul Ghani stated in a Bernama news report on March 19, 2018 that “income derived from outside Malaysia and remitted to Malaysia would be exempted from tax, adding that this applied to all individuals or companies without exception”. So, are overseas incomes still taxable?