Other income under section 109F

The situation

Gains or profits under para 4(f) paid to non-residents, such as some commissions, attract 10% withholding under s109F.

The law

• Sec 109F, Income Tax Act 1967: Other gains or profits under para 4(f) paid to non-residents: 10%

What it means for you

Whether a commission is 4(f) income depends on the facts. If it relates to services in Malaysia it may fall under s109B. Classify carefully. Getting the section wrong can lead to the wrong form and rate. Keep the agreement and a short memo on why you chose the section.

What to do

1. Describe the payment.
2. Pick the right section.
3. Withhold 10%.
4. File and pay.

Related

• Royalty withholding tax
• Treaty rate for withholding
• Who bears withholding tax
• Withholding on technical services
• Contract payment to non-resident contractor
• Services performed outside Malaysia