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What is a Withholding Tax?

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.

'Payer' refers to an individual/body other than individual carrying on a business in Malaysia. He is required to withhold tax on payments for services rendered/technical advice/rental or other payments made under any agreement for the use of any moveable property and paid to a non-resident payee.

'Payee' refers to a non-resident individual/body other than individual in Malaysia who receives the above payments.

Withholding Tax Deduction (Details)

The Income Tax Act, 1967 provides that where a person (referred herein as "payer") is liable to make payment as listed below (other than income of non-resident public entertainers) to a non-resident person (NR payee), he shall deduct withholding tax at the prescribed rate from such payment and (whether such tax has been deducted or not) pay that tax to the Director General of Inland Revenue within one month after such payment has been paid or credited to the NR payee.

All withholding tax payments (other than for non-resident public entertainers) must be made with the relevant payment forms, duly completed, together with copy of invoices issued by the NR payee and copy of payment documents as proof of date of payment /crediting to the NR payee.

Type Of Income Subject To Withholding Tax And Withholding Tax Rate On Non-Resident Persons:

Withholding Tax On Non-Resident Persons :

Please ensure that the forms are completed accurately furnishing the Malaysian tax reference number for the payer, payee as well as the payee's country of origin.

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If the payer does not have the reference number of the payee, the payer may request for such

number from :

Non Resident Branch
Customer Services Unit
3rd Floor Left, Block 8
Government Office Complex
Jalan Duta, 50600 Kuala Lumpur

Stating the full name, address of the payee and the nature of payment.

For urgent payment (where the income tax reference number of the payee is not known), the payer may send the Forms CP 37A/ CP 37/ CP 37D together with the payment, copy of invoice and remittance slip (telegraphic transfer) directly to:

Non Resident Branch
Withholding Tax Unit
7th Floor, Block 8
Government Office Complex

Payment Type

Income Tax Act 1967
Withholding Tax Rate Payment Form
Contract Payment
Section 107A (1) (a) & 107A (1) (b)
10%, 3%
CP 37A
Interest Section 109
15% CP 37
Royalti Section 109
10% CP 37
Special classes of income: Technical fees, payment for services, rent/payment for use of moveable property
Section 109B
10% CP 37D
Interest (except exampt interest) paid by approved financial institutions
Section 109C
5% CP 37C
Income of non-resident public entertainers
Section 109A
15% Payment memo issued by Assessment Branch

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




CP 37E

Family Fund/Takaful Family Fund/Dana Am

(i) Individual and other

(ii) Non Resident Company

Section 109E



CP 37E(T)

Income under Section 4(f) ITA 1967
Section 109F
10% CP 37F