Before you start

Knowledge of your tax residency days in Malaysia
Income records (payslips, invoices, bank statements)
MyTax registration (for LHDN online filing)

Step-by-step

1
Determine your tax residency status
You are a Malaysian tax resident if you are physically present in Malaysia for 182 days or more in a calendar year (Jan 1–Dec 31). That is the main test, but not the only one: s.7 of the Income Tax Act 1967 also catches a shorter stay that links to a 182-day-plus period in the adjoining year, presence of 90 days or more in a year when you were resident or present 90+ days in three of the four preceding years, and residence in the three preceding years plus the following one. So do not assume that ducking under 182 days settles it. Residency is not linked to your visa type — a tourist on a chain of SVPs can become tax-resident. Residents pay progressive rates (0–30%) on Malaysian-sourced income. Non-residents pay a flat 30% on Malaysian-sourced income, withheld at source if employed by a Malaysian company.
OnlineWho: All long-stay residentsAssess at year-end; count your daysFree to calculate
2
Understand the foreign-income remittance rule (post-2022)
From January 2022, Malaysia ended the blanket statutory exemption for foreign-sourced income received in Malaysia, so in principle income earned abroad and brought into a Malaysian account is chargeable for tax residents. What actually saves most people is a separate exemption order — the Income Tax (Exemption) (No. 5) Order 2022, P.U.(A) 234/2022 — which exempts resident individuals on all classes of foreign income received in Malaysia except income from a Malaysian partnership. It runs from 1 January 2022 and Budget 2026 extended it to 31 December 2036. The condition is that the income has already been subjected to income tax (or its equivalent) in the territory where it arose, and LHDN's guidelines set out what evidence they expect. Note what this means for a nomad earning from a jurisdiction that did not tax the income at all: the condition may not be met, so keep proof of foreign tax paid. There is no 'RM 100,000 de minimis' and no requirement that the source country have a double-tax agreement with Malaysia — both are common online myths.
OnlineWho: Tax residents remitting income from abroadOngoing — assess annuallyFree; take advice if your income was untaxed at source
3
Register for MyTax (LHDN online portal) and get a Tax Identification Number (TIN)
Register at mytax.hasil.gov.my to get your Malaysian TIN (or your employer will register you for one). You need a TIN to file taxes, open an EPF account (if employed) or submit rental income declarations. For DE Rantau holders: you should still register for a TIN and file a nil or exempt return to establish clean records — LHDN may request it.
OnlineWho: All tax residents and employees30-60 minutes to registerFree
4
File your annual return (e-BE or e-B form) by April 30
Individual tax returns are due April 30 for salary income (e-BE form) and June 30 for business/self-employment income (e-B form) for the prior calendar year. File via mytax.hasil.gov.my — enter income, claim deductions (lifestyle, medical, books, childcare — max RM 2,500 each for typical reliefs) and submit. LHDN calculates the tax owed or refund. First-time filers: register for MyTax first and set up your e-Filing credentials at least a week before the deadline.
OnlineWho: All tax residentsJanuary–April 30 (salary earners) or June 30 (self-employed)Free to file; tax payable varies by income

Documents you’ll need

Tax Identification Number (TIN) from LHDN
EA form from employer (for salaried employees) or invoices/bank statements for self-employed
Receipts for deductible expenses (lifestyle, medical, education, insurance premiums)
DE Rantau approval letter (if claiming exemption on foreign-sourced income)

Things most newcomers don’t know

Your foreign remote income is probably untaxed here — but because of a general exemption order, not because DE Rantau grants you anything. Get the mechanism right, because the conditions attach to the order, not to your visa.

It is widely repeated that the DE Rantau pass carries its own tax exemption. It does not. What shelters foreign-sourced income received in Malaysia is P.U.(A) 234/2022, which applies to resident individuals generally — DE Rantau holders, MM2H holders and Employment Pass holders alike — and is conditional on the income having been taxed where it arose. Budget 2026 extended it to 31 December 2036. Your home country's rules are separate: US citizens must still file with the IRS, and several EU countries apply exit or remittance rules worth checking.

Source: Income Tax (Exemption) (No. 5) Order 2022 P.U.(A) 234/2022; Budget 2026 extension

Malaysia has no capital-gains tax on shares or crypto for individuals, and no inheritance tax — but dividends are no longer entirely free. From 2025 a 2% tax applies to individual dividend income above RM 100,000.

Real property gains tax (RPGT) applies to Malaysian property but not to foreign assets or listed investments, and there is still no general CGT on financial assets held by individuals. The Finance Act 2024 did, however, introduce a 2% tax on the portion of an individual's annual Malaysian-sourced dividend income exceeding RM 100,000, effective 1 January 2025 — self-assessed and declared on your return. Foreign-sourced dividends, EPF dividends and several approved funds are outside it.

Source: Finance Act 2024 / LHDN dividend tax guidance

The PCB (Potongan Cukai Berjadual) monthly payroll deduction for employees means most PAYE salary earners have little to pay at filing time — it's effectively a withholding system similar to the UK/Australia.

PCB was calibrated on conservative rates, so most employees receive a refund rather than owe additional tax.

Common mistakes to avoid

Believing DE Rantau itself confers a tax exemption — it does not; the shelter is the general exemption order P.U.(A) 234/2022, and it is conditional on the income having been taxed at source
Not registering for a TIN even if you have zero Malaysian-taxable income — LHDN requests TINs from all long-term residents with a bank account
Missing the April 30 filing deadline — LHDN charges a 10% late payment penalty plus a 5% monthly interest for unpaid tax
Treating the 182-day count as the whole residency test — s.7 of the Income Tax Act 1967 has three further limbs that can make you resident on fewer days, so check all four before concluding you are out

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.

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