Withholding tax on payments to non-residents

We decide if WHT applies, find the right rate and treaty relief, file the CP37 form and pay within one month so your expense stays deductible.

MYR 350Per payment

For: Malaysian payers (companies, LLPs, sole proprietors) paying non-residents for services, technical advice, royalties, interest, rent of movable property or other income.

What we need from you

Invoice and contract with the non-resident
Nature of payment
Where services were performed
Services outside Malaysia may be outside s109B
Payee's country and tax residence certificate
Treaty rate
Date paid or credited
One-month deadline
Contract tax clause (net or gross of tax)
Gross-up cost

What we discuss

Is it technical services, royalty, interest or a contract payment?
Different sections and rates
Were the services rendered in Malaysia?
Scope
Is there a tax treaty?
Lower rate may apply
Who bears the WHT?
Gross-up cost

What we file

Classify payment and rate
Example: technical fee RM50,000 to a Singapore firm, services in Malaysia: 10% = RM5,000 withheld
File the CP37 form for the type
Pay WHT
10% increase if late

What you get

WHT computation and receipt
Treaty memo

The law

Sec 107A, Income Tax Act 1967: Contract payments to non-resident contractors: 10% plus 3% withheld on the service portion Source
Sec 109, Income Tax Act 1967: Interest (15%) and royalty (10%) paid to non-residents: tax withheld and remitted within one month Source
Sec 109B, Income Tax Act 1967: Special classes of income (technical advice, services, rent of movable property) to non-residents: 10% Source
Sec 109F, Income Tax Act 1967: Other gains or profits under para 4(f) paid to non-residents: 10% Source
Sec 39(1)(f), Income Tax Act 1967: No deduction for payments where withholding tax was not paid Source

Questions people ask

Online payment in MYR is not open yet. Send us a message and an adviser for Malaysia confirms the scope and the fee before any work starts.