Residence Status for Individual -

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RESIDENCE STATUS FOR INDIVIDUAL

Introduction

(1) based on number of days, individual present in Malaysia during a calendar year (1
January to 31 December).
(2) Citizenship or permanent residence status not relevant.
(3) Part of a day counted as one day [Section 7(1A)]
(4) An individual is considered as resident for the whole year of assessment.

Section 7(1)(a)

 Physically present in Malaysia for period or periods of at least 182 days.

 Need not be consecutive days
 Can be single or multiple periods

Section 7(1)(b)

Physically present in Malaysia for a period/periods of less than 182 days AND this period
(short period) is either:-
Linked To another period (next year) (long period) of at least 182 consecutive days or
Linked By another period (last year) (long period) of at least 182 consecutive days.

The “182 consecutive days” is counted from 1 January onwards for “linked to” and from 31
December backwards for “linked by”.

Any gap during the “linked period” and the “182 consecutive days” must be filled by
temporary absences, PROVIDED the person is in Malaysia both before and after the
absence.

(4) Temporary absences are:-

 Connected with his service in Malaysia and owing to service matters or attending
conferences or seminars or study abroad (not limited by number of days)
 Going to overseas owing to ill health involving himself or a member of immediate
family (spouse, children and parents but exclude brothers and sisters) (not limited by
number of days)
 Going overseas for social visits of not more than 14 days in aggregate Social visits
include any form of vacation outside Malaysia besides vacation to home country

(5) The view of the tax examiners is that candidates may assume, in the absence of any
statement to the contrary, that any absence from Malaysia which does not qualify under the
other two headings will qualify as a social visit. Note, however, that absences of this kind are
limited to 14 days in total.

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Section 7(1)(c) – The Continuous Presence Test

(1) Physically present in Malaysia for period/periods of at least 90 days AND 3 out of 4
immediate preceding years is either a resident/physically present in Malaysia for at least 90
days.

Section 7(1)(d)- The Deemed Residence Test

(1) A Resident in the following year and also a resident in 3 immediate preceding years.
(2) Therefore, an individual can be resident even though he might never actually have been in
Malaysia at all during that basis year

Envoy/Ambassador

Section 7(1B)

(1) Where person is a citizen and

 employed in public services or service of a statutory authority in Malaysia; and
 not in Malaysia at any day in the basis year for that particular year of assessment by
reason of:
 having or exercising his employment outside Malaysia; or
 attending any course of study in any institution or professional body outside
Malaysia which is fully-sponsored by the employer,
he is deemed to be a resident for the basis year for that particular year of assessment and for
any subsequent basis years when he is not in Malaysia
(2) This law is effective from YA 2009.

Distinctions between Resident and Non Resident Individual

Individual-Resident
Entitled:
 Reliefs and rebates
 IT rates: Scaled rates from 0 – 28%
 Flat rate 30% for CI > RM2million
 Exemption

Non Resident:
 No reliefs and rebates
 IT rates: Flat rate of 30 %

Thus, being a resident is more advantageous than a non resident

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