RESIDENT STATUS

TAX267
FATIMAH ALWI
 INTRODUCTION
An individual’s resident status is important to determine his tax chargeability.
❑Tax scales used to compute tax payable
❑Types of income subject to tax
❑ Witholding tax imposed

It is legislated by Sections 7(1)(a)-(d) of Income Tax Act 1967.

SECTION 7(1)(a)
❑A person is a resident if he is physically present in Malaysia for 182 days or more in a basis year.
❑The period of 182 days or more can be either in single period or multiple period.

>182 days

1/2/XX 1/8/XX

I II III

I+II+III >182 days

 SECTION 7(1)(b)
❑In order to apply S7(1)(b), two consecutive YA must be observed.

❑For a YA that has a short period (< 182 days), such period must be link to/by another period in
which he is physically present for 182 days or more consecutively (long period). Additionally, the
long period may include temporary absent.

❑A link is established between the two consecutive YAs if:

❑ the person is physically present in Malaysia on both dates of 31/12/x1 and 1/1/x2
❑ the person is temporary absent on both dates of 31/12/x1 and 1/1/x2
❑ or any combination of both on these dates
 Link to
YA01?? YA02

<182 days TA

> 182 days consecutively

Link by

YA01 YA02??

TA <182 days

> 182 days consecutively

 Temporary absent
An individual who is not physically present in Malaysia due to:
❑His service in Malaysia and owing to service matters or attending conferences or seminars or
study abroad.

❑Ill-health involving himself or immediate family members.

❑Social visits not exceeding 14 days in aggregate for both YAs.

❑ If more than 14 days, the whole period of TA is considered as absent from Malaysia.
 SECTION 7(1)(c)
In order to apply S7(1)(c), an individual must be:
❑Physically present in Malaysia in the year of question for 90 days or more
❑Resident or stay in Malaysia for at least 90 days for the three out of four preceding years

YA01 YA02 YA03 YA04 YA05 ???

>90DAYS
R or >90 days R or >90 days NR or <90 R or >90 days
days
 SECTION 7(1)(d)
In order to apply S7(1)(d), an individual :
❑May be absent at all in the year of question
❑Three immediate preceding years must be resident
❑Also resident in the following year

YA01 YA02 YA03 YA04?? YA05

R R R R
SECTION 7(1A)

• A person is still considered in Malaysia on the day he leaves Malaysia

SECTION 7(1B)