Chapter 2 – Part 2

Exemptions & Adjusted Income

Exemptions – Schedule 6

• Short term employment

• Para 21 –income derived by a NR individual from an employment in
Malaysia of not more than 60 days – exempted
• The period/periods do not exceed 60 days
• The period does not exceed a continuous period of 60 days which overlaps two
successive basis years
• The continuous period in above together with another period or periods do not
exceed 60 days
• Employment in Malaysia – duties are discharged in MY
• 60 days – inclusive of work incidental to duties in Malaysia
Example 1

1/8/2017 - 31/8/2017 = 31 days (employment)

6/9/2017 – 23/9/2017 = 18 days (employment)
1/12/2017 – 31/12/2017 = 31 days (holiday)

Will be exempted, because

1. He is not a resident
2. Exercised employment for less than 60 days
If he is a resident, then he is taxable
Example 2

3/12/2017 - 31/12/2017 = 29 days (employment)

1/1/2018 – 30/1/2018 = 30 days (employment)

Will be exempted, because

1. He is not a resident
2. Exercised employment for less than 60 days (only 59 days)

If he continues to work until 3 February 2018, (total 63 days),

then, he is taxable at NR flat rate.
Example 3

16/11/2017 - 31/12/2017 = 46 days (employment)

1/1/2018 – 10/1/2018 = 10 days (employment)
1/4/2018 – 9/4/2018 = 9 days (employment)

Will be taxable because the overlapping periods together with

the later period exceeds 60 days.
Example 4

1/5/2017 - 31/5/2017 = 31 days (employment)

1/8/2017 – 26/8/2017 = 26 days (employment)
5/1/2018 – 3/2/2018 = 30 days (employment)
1/6/2018 – 28/6/2018 = 28 days (employment)

Will be exempted. WHY?

Exemption

• Para 22(b) – excludes public entertainer

• Does not include directors of Malaysian companies
Adjusted Income

• Gross income – expenditure wholly and exclusively incurred during

that period and in the production of such gross income [Sec. 33(1)]
• Not private/domestic expenditure
• Not for disbursement or expenses not wholly and exclusively laid out for the
purpose of producing income
• Not for a scheme which is not approved
Relevant cases

• Newsom v. Robertson (33 TC 452); Horton v Young (1971) 3 All ER

412
• 4 CTBR (N.S), Case 99; Caillebotte v Quinn (50 TC 222)
• Short v Mclllgorm (26 TC 262)
• Blackwell v Mills (26 TC 468); Lupton v Potts (45 TC 643)
• KPHDN v Dr. Arunjit Dutt [(1995) 2 MSTC 3454]; SV v KPHDN
[(1997) MSTC 2911]
• Mansfield v FC of T [(1996) MSTC 9003]