SELaiCK Alert 4-2017 Withholding tax on Technical Fees for Offshore Service – Exemption from 6 Sept 2017

Dear Valued Clients and Associates

On 17 Jan 2017, a 10% withholding tax (WHT) was re-imposed on the payments to non-residents (NRs) in relation to the following services rendered and performed outside Malaysia (offshore services): 

  1. Services rendered in connection with the use of property or rights belonging to, or the installation or operation of any plant, machinery or other apparatus purchased from such NRs [S4A(i)]*; and
  2. Technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme provided by NRs [S4A(ii)]*

Note: (*) Income Tax Act, 1967

Income Tax (Exemption) (No. 9) Order 2017 gazetted on 24 October 2017, however:

  1. Exempts WHT on payments to NRs in relation to offshore services falling within S4A(i) and S4A(ii) referred to above (Para 3 of the Order).
  2. The Order is effective from 6 September 2017.

The pre-Jan 17 and post-Sept 17 WHT position may be summarised as follows: 


WHT required on Payments to NRs in

Relation to Services Rendered

Before 17 Jan 17

In Malaysia only

Between 17 Jan 17 > 5 Sep 17

In Malaysia and/or Outside Malaysia

From 6 Sep 17

In Malaysia only

A PDF copy of the Order is attached for your kind attention and reference. Please do not hesitate to contact us should you require clarifications on the above.

30 October 17