Reviewed 16 September 2026. This is general information, not Malaysian tax advice. Obtain advice from a licensed Malaysian tax professional for your circumstances.
Malaysia’s foreign-sourced income exemption for resident individuals did not end in 2026. The extension runs to 31 December 2036.
The earlier exemption, made under P.U.(A) 234/2022, covered qualifying foreign-sourced income received in Malaysia by resident individuals from 1 January 2022 to 31 December 2026, subject to conditions and exclusions. Order P.U.(A) 451/2024 extended the relevant exemption from 1 January 2027 to 31 December 2036.
Who this concerns
The measure concerns Malaysian tax residents who receive qualifying foreign-sourced income in Malaysia. Tax residence is determined under section 7 of the Income Tax Act 1967; physical presence is commonly relevant, but the statutory tests are more detailed than a single day count.
It does not mean all foreign income is automatically tax-free for every person. The nature of the income, the recipient’s residence status, any partnership-business income and the conditions in force for the relevant year all matter.
Do not mix individual and entity rules
Rules for companies, limited liability partnerships, trust bodies and other entities have separate legislation and timelines. An entity-level announcement should not be treated as an individual’s exemption.
What to check before relying on it
Review the actual gazette order and current guidance from the Inland Revenue Board of Malaysia. If the amounts are material, ask a licensed tax agent to assess your residence status, source of income, remittances and any foreign tax paid.
Sources
- Inland Revenue Board of Malaysia
- Attorney General’s Chambers e-Federal Gazette
- Income Tax (Exemption) (No. 5) Order 2022, P.U.(A) 234/2022
- Extension order, P.U.(A) 451/2024
Further reading: For a broader view of Malaysia long-stay routes and planning considerations, see our Malaysia guide.
LLA Editorial Team | Living Life Asia