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International Withholding Tax Studies

Withholding tax is an amount withheld by the party making payment (payer) on income earned by a non-resident (payee) and paid to the Inland Revenue Board of Malaysia.

Type of income subject to withholding tax:-

Contract PaymentSection 107A (1) (a) & 107A (1) (b)10%, 3%
InterestSection 10915%
RoyaltySection 10910%
Special classes of income: Technical fees, payment for services, rent/payment for use of moveable propertySection 109B10%
Interest (except exempt interest) paid by approved financial institutionsSection 109C5%
Income of non-resident public entertainersSection 109A15%
Real Estate Investment Trust (REIT)
(i) Other than a resident company
(ii) Non Resident company.
(iii) Foreign investment institution
effective from 01/01/2007
Section 109D
Family Fund/Takaful Family Fund/Dana Am
(i) Individual and other
(ii) Non Resident Company
Section 109E
Income under Section 4(f) ITA 1967Section 109F10%


Where the payer fails to pay or pays withholding withholding tax late (not within the period of one month after the date of payment / crediting to the NR payee), he is imposed an increase in tax of a sum equal to ten percent of the amount which he fails to pay is imposed.

Refund Of Withholding Tax

For refund of withholding tax overpaid by the payer due to the DTA reduced rates, the payee must forward the application for refund to the Director, Non Resident Branch together with the following details:

Tax resident certificate of the payee from the tax authority of the country where the payee is resident.

Evidence to prove that the conditions stipulated in the DTA are met.

Proof of payment of withholding tax.