Foreign Sourced Income Exemption Order

Consistent with earlier announcements by the Ministry of Finance on the tax treatment of Foreign Sourced Income, two public orders, P.U. (A) 234/2022 and P.U (A) 235/2022 on the Exemption of Foreign Sourced Income were issued on 19 July 2022 in this regard.

The Public Orders stipulate that a resident individual is exempted from foreign sourced income. The exemption is not applicable to resident individuals with partnership business in Malaysia.

This means that resident companies, LLPs and individuals with partnership business in Malaysia are only exempted on foreign sourced dividend income.

The exemption of the foreign sourced income announced per the Public Orders above is valid for a period of 1 January 2022 until 31 December 2026.