SE Lai CK Alert 4-2017 Withholding tax on Technical Fees for Offshore Service – Exemption from 6 Sept 2017

Dear Valued Clients and Associates

On 17 Jan 2017, a 10% withholding tax (WHT) was re-imposed on the payments to non-residents (NRs) in relation to the following services rendered and performed outside Malaysia (offshore services):

(a) Services rendered in connection with the use of property or rights belonging to, or the installation or operation of any plant, machinery or other apparatus purchased from such NRs [S4A(i)]*; and

(b) Technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme provided by NRs [S4A(ii)]*

Note: (*) Income Tax Act, 1967

 

Income Tax (Exemption) (No. 9) Order 2017 gazetted on 24 October 2017, however

(a) Exempts WHT on payments to NRs in relation to offshore services falling within S4A(i) and S4A(ii) referred to above (Para 3 of the Order).

(b) The Order is effective from 6 September 2017.

 

The pre-Jan 17 and post-Sept 17 WHT position may be summarised as follows:

Period

WHT required on Payments to NRs in

Relation to Services Rendered

Before 17 Jan 17

In Malaysia only

Between 17 Jan 17 > 5 Sep 17

In Malaysia and/or Outside Malaysia

From 6 Sep 17

In Malaysia only

A PDF copy of the Order is attached for your kind attention and reference. Please do not hesitate to contact us should you require clarifications on the above.

30 October 17


Attachment:

Income Tax Exemption No 9 Order 2017

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