Determination of residence status – Section 7(1)

- Determined by the number of days an individual person is present in Malaysia during a

particular year.

- The citizenship or permanent residence status of an individual (either a Malaysian or a

foreigner) is not relevant in ascertaining the tax residence status of an individual in Malaysia.

Section 7(1)(a)

- Individual must be physically present in that calendar year, amounting to a minimum of 182
days.

- The 182 days can be made up of one period or multiple periods during that particular
calendar year

Section 7(1)(b)

- Sets out two ways where an individual can be a tax resident

- Prerequisite: he must be in Malaysia either in Jan or Dec of that year

Sec 7(1)(b) linked by a period of 182 or more consecutive days

- In the case of Jan, the number of days in Jan 2015 (short period) is linked by another period
of 182 or more consecutive days (long period) in the immediately preceding YA (2014).

- Permitted temporary absence shall be taken to form part of ‘long period’ or ‘short period’ if
he is in Malaysia immediately prior to or after that temporary absence

Sec7(1)(b) linked to a period of 182 or consecutive days

- In the case of Dec, the number of days in Dec 2015 (short period) is linked to another period
of 182 days or more consecutive days (long period) in the immediately following YA (2016).

- Permitted temporary absence shall be taken to form part of ‘long period’ or ‘short period’ if
he is in Malaysia immediately prior to or after that temporary absence
Meaning of ‘temporary absence’

‘temporary absence from Malaysia’ is treated as ‘in Malaysia’ for the purpose of ascertaining
the residence in sec 7(1)(b)

(a) Connected with his service in Malaysia and owing to service matters or attending
conferences or seminars or study abroad

- Only applies to individual who is exercising employment in Malaysia.

(b) Owing to ill-health involving himself or a member of his immediate family.

- Immediate family member would comprise spouse, children and parents excluding brothers
and sisters.

(c) social visits not exceeding 14 days in the aggregate

- It involves visiting of friends and relatives and also vacation and holiday tours in overseas.

- The 14 days absence for social visit need not be consecutive and it can relate to any one of
the two YA.

Sec 7(1)(c) – requirement as a resident in 2015

i. He must be in Malaysia for a period or periods of 90 days or more in 2015 ; and

ii. 3 out of 4 immediately preceding basis years (2011 – 2014) is either:

(a) a resident , or

(b) in Malaysia for a period or periods of 90 days or more

Sec 7(1)(d) – requirement as a resident in 2015

- He must be resident in the following year in 2016, and

- 3 immediately preceding years (2012 to 2014) must also be a resident