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):
- 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
- 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:
- 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).
- 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