Rental of movable property abroad

The situation

Rent or payments for the use of movable property paid to non-residents fall under s109B at 10%.

The law

• Sec 109B, Income Tax Act 1967: Special classes of income (technical advice, services, rent of movable property) to non-residents: 10%

What it means for you

Example: equipment rent RM20,000: withhold RM2,000. Check treaties, which may treat it as royalty or business profits. Where a treaty applies, rent of equipment may be taxed differently or not at all in Malaysia. Keep the certificate of residence and the treaty article in your file.

What to do

1. Confirm it is movable property rent.
2. Check the treaty.
3. Withhold 10%.
4. File CP37D 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