| 7. Income Tax
Q: What kind of
taxes are the participants of this programme normally
subjected to?
A: Income tax is imposed on income earned from
investments in local companies and local share market. Apart
from this, gains from the sale of landed property are also
subjected to real property gains tax. Please refer to
www.hasilnet.org.my for more details on the tax structure.
Q: Is the interest for their fixed deposit
taxable? Some say it is taxable, other it is not taxable. If
the deposit amount exceeds RM100, 000.00 OR if the deposit
period is one year. What is the exact regulation?
A: Interest earned by an individual from fixed
deposit account is exempted in the following situations:-
i. Period exceeding twelve months or more – any amount of
interest.
ii. Period not exceeding twelve months – interest on fixed
deposit
account of up to a maximum of RM100,000.00.
Q: Is income remitted from abroad taxable?
A: Before year of assessment 2004 income remitted
from abroad to Malaysia (apart from pension) is subject to
tax. However, from year of assessment 2004 all income
remitted from abroad is not subject to tax.
Q: Does the participant have to submit any
personal tax declaration to the Income Tax Department of
Malaysia, like Malaysians have to?
A: Yes.
Q: If the participants have to submit income tax
return to the Income Tax department, are they entitled to
any exemptions under the programme?
A: They will only be taxed on the income earned
in Malaysia after taking into account the personal tax
allowances. The income will be taxed according to a
progressive tax rate structure.
Q: I am a German in which my country has a `double
taxation agreement’ with Malaysia. I have an early pension
and if I stay in Malaysia for at least 184 days, my pension
scheme will not be taxed by the German Government and will
also not be taxed by the Malaysia government. Is this true?
A: Under this Programme, pension remitted to
Malaysia is exempted from tax.
Next:
FAQ on Investment
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