'%3e%3cpath%20fill='%23eee'%20d='M256%200h256v64l-32%2032%2032%2032v64l-32%2032%2032%2032v64l-32%2032%2032%2032v64l-256%2032L0%20448v-64l32-32-32-32v-64z'/%3e%3cpath%20fill='%23d80027'%20d='M224%2064h288v64H224Zm0%20128h288v64H256ZM0%20320h512v64H0Zm0%20128h512v64H0Z'/%3e%3cpath%20fill='%230052b4'%20d='M0%200h256v256H0Z'/%3e%3cpath%20fill='%23ffda44'%20d='M142%2078a78%2078%200%201%200%2058%20134%2063%2063%200%200%201-30%207%2063%2063%200%201%201%2030-119%2078%2078%200%200%200-58-22m46%2033-11%2024-26-6%2012%2023-21%2017%2026%205v26l20-16%2020%2016v-26l26-5-21-17%2012-23-26%206z'/%3e%3c/g%3e%3c/svg%3e)
Withholding tax in Malaysia 2026
Malaysian payments to non-residents settle at source: 15% on interest, 10% on royalties, technical and service fees, rentals of equipment and most other income — final, with no return needed.
Dividends stand out at 0% withholding thanks to the single-tier system, though the 2% charge above MYR 100,000 a year still applies.
At a glance
- top rate
- 15% (interest; public entertainers)
- entry band
- 0% on dividends
- tax year basis
- Taken when the payment is made
- filing deadline
- Final withholding closes the matter for that income
- residency basis
- Malaysian-source payments to non-residents
- regime flag
- Treaties can reduce rates; services taxed only if performed in Malaysia
Rates
Withholding on non-residents (2026)
| Rate | Base | Applies to |
|---|---|---|
| 15% | Gross | Interest (final) |
| 10% | Gross | Royalties; equipment rental; technical advice, management and service fees for work performed in Malaysia (final) |
| 13% | Service portion | Contract payments to non-resident contractors (on account, not final) |
| 15% | Gross | Public entertainers performing in Malaysia (final) |
| 10% | Gross | Any other income class (final) |
| 0% | — | Dividends — none withheld under the single-tier system |
Withholding residents meet (2026)
| Rate | Base | Applies to |
|---|---|---|
| Progressive | Salary | Monthly payroll deduction by every employer |
| 2% | Payments received | Resident agents, dealers and distributors paid over MYR 100,000 by one company in the prior year |
| 3% / 7% | Property sale price | Buyer's retention on real property disposals — 3% standard, 7% for non-citizen sellers, paid over within 60 days |
Residency
Residency trigger
The non-resident rates apply to Malaysian-source payments to people outside the residence tests; service fees are only caught when the work happens in Malaysia.
Non-resident treatment
Where final withholding is properly taken there is no filing duty; otherwise non-residents file like residents but at the flat 30% with no allowances.
Notes
- Tax treaties can cut the 10-15% rates; Malaysia's wide treaty network generally follows the standard international model with tax-sparing for its incentives.
- Employers must notify the tax office and obtain clearance before an expatriate leaves Malaysia permanently or for more than 3 months.
- Early withdrawals from a private retirement scheme before age 55 face an 8% withholding unless due to disability, serious illness, death or permanent departure.
- Royalty exemptions exist for certain cultural and personal-use items.
FAQ
What withholding tax applies to non-residents in Malaysia?
15% on interest, 10% on royalties and service fees for Malaysian work, 13% on the service part of contractor payments — mostly final taxes.
Is there withholding tax on Malaysian dividends?
No — 0% under the single-tier system. The only dividend charge is the 2% on annual amounts above MYR 100,000.
Figures: tax year 2026, compiled from public sources. Not tax advice.