Malaysia Tax Agency Issues Decree on Tax Treatment of Foreign Nationals Employed, Seconded in Malaysia

The Malaysian Inland Revenue Board March 27 issued General Decree No. 2/2026, updated guidance on the individual income taxation of employment income earned by foreign nationals working or seconded in Malaysia. Topics covered include: 1) Malaysia-sourced employment income, and the tax base; 2) Malaysian residency status based on physical presence in the basis year; 3) the flat 30 percent tax rate for nonresident individuals, and ineligibility for individual relief; 4) the exemption for employment income from a short-term employment period not exceeding 60 days, and the aggregation of multiple employment periods in calculating the 60-day threshold; 5) bilateral tax credit ...