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Introduction Determination of residential status of an individual [Section 7 (1)(a)-(d) Importance of residential status of individual
INTRODUCTION
WHY WE NEED TO DETERMINE WHETHER A PERSON IS A RESIDENT(R) OR NONRESIDENT(NR)? Because resident is given an overall preferential tax treatment as compared to non-resident individual Eg: Tax rate: R- scaled rate (0%-26%), NR- flat rate (26%) Personal relief: R- entitled, NR- not entitled
182 days
SEPT 1
DEC 31
Multiple period
YA 2006
JAN 1
JUL 1 92 days
DEC 1
DEC 31 SEPT 1
linked to
John is a tax resident in Y/A 2007 even though he is totally away from Malaysia. This is because he is a tax resident in 3 preceding years and the following year. Therefore, he qualifies to be a tax resident by virtue of S7(1)(d).
TAX RATE
R- Scaled rate (0% - 26%) NR- Flat rate (26%)
PERSONAL RELIEF
R- entitled to claim NR- not entitled
CHARGEABLE
INCOME
WITHOLDING TAX ON CONTRACT PAYMENT, INTEREST, ROYALTY, TECHNICAL FEES AND OTHER SECTION 4A PAYMENT
R- Not applicable NR- Applicable
END OF CHAPTER 2