taxationSOCIAL AND ECONOMIC REMIFICATION OF TAX AND NEW RULING
when the Federation of Malaya, Singapore, Sabah, and Sarawak formed a fourteen state federation. Malaysia is located in Southeast Asia, and its local currency is Ringgits (RM) .
In Southeast Asia, the highest income disparity between rich and poor is found in Malaysia. According to the UNHDP report, the richest 10% control the Malaysias 38 .4% of economic income as compared to the poorest 10%, who only control 1 .7%. This further triggers the need for levy of tax . The government of Malaysia levies various kinds of tax; namely, Income tax, Gift tax, Property tax, Estate tax, Sales tax, Corporate tax and so on. The new law ...view middle of the document...
In order to prevent double taxation of the foreign income Malaysian . law permits taxpayers to claim foreign tax credits for income taxes (and related taxes) paid to foreign governments.
Double Taxation Relief
The general rule is that a person who is not resident or ordinary resident in Malaysia is charged with income tax on malaysian “source” income, such as rent from Malaysian properties. The receipt of income from anywhere in the World by an singapore resident individual, will attract singapore Income Tax. Where the receipt of rents causes income tax liability both in malaysia and singapore, Double Taxation relief will usually be available. It is necessary to look at the overall effective rate of tax. As the property is situated in malaysia, it has the primary right to receive tax on rental income in accordance with the Double Taxation Treaty.
Rental income rules
A lot of property investors will rely on rental income of their properties to pay for the monthly mortgage payment and may be gain some positive cash flow. However, those rental income are taxable based on Malaysia Taxation Law.
Hence, it is important for...