Working overseas but payment paid to local bank. What's the smart way to avoid tax?

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asked on Apr 19, 2008 at 21:19
edited on Jun 20, 2016 at 04:24
I'm Malaysian citizen.

If I work as a freelance overseas, but payment paid directly into my local bank in Malaysia:

1. Do I need declare for tax?
2. What if I already pay tax overseas, do I still need to declare in Malaysia?
3. What if I work in free-tax country, do I still need to declare tax in Malaysia?

What is the 'smart' way in order to pay less tax or better none?
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3 Answers

answered on Jun 1, 2008 at 23:08
edited Jun 20, 2016 at 04:04
If you are working overseas and have been resident in that country for a period of more than half the year unbroken, you would be deemed to be a non resident in Malaysia (if the non resident qualification is 6 months or more). If your money is paid into a Malaysian account certain things change. The interest on your Malaysian account could be taxable in Malaysia.

If you pay tax in the foreign country in which you work, check to see if they are part of a dual tax agreement with Malaysia. What happens in such circumstances is that what you have paid there (subject to threshold levels) will be offset against any tax liability you accumulate for the relevant period in Malaysia.

Otherwise, if you work abroad, don't remit your money to Malaysia if you will be taxed there. Tax is calculated if your interest income exceeds the minimum threshold for tax purposes.
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answered on Jun 18, 2016 at 09:11
What if the income derived is banked into a foreign account in an offshore bank in Malaysia? There is no interest calculated in the foreign account. Is that still taxable?
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answered on Jun 18, 2016 at 13:17
edited Jun 20, 2016 at 04:03
Yes. All income is taxable. Contact your accountant for consultancy.
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