Which employees can benefit from special tax incentives?

There are two categories of employees who are given special tax incentives:


Returning Expert

The returning expert program is designed to encourage Malaysian professionals who are living abroad to return to Malaysia.

An employee under the returning expert program is given several tax incentives, notably:

  • Flat tax rate of 15% for five years (most employees in this program would normally be taxed at 25%).

  • A tax exempt car, up to a maximum of value RM 150,000.

  • Tax exemption for all personal effects brought into Malaysia, limited to one (1) shipment.

Qualification

To qualify for the knowledge worker program an employee has to:

  • Be a Malaysian Citizen; and

  • be residing and employed abroad continuously for at least 3 years at time of application submission; and

  • Have not earned employment income in Malaysia continuously for at least 3 years leading up to the time of application.

In addition to this the employee must have at least a diploma qualification, several years’ working experience (depending on his level of qualification) and a monthly salary equivalent to RM 20,000.

For a full list of conditions see here.


Knowledge Worker

The Iskandar knowledge worker program is designed to encourage development in the Iskandar region in Johor.

An employee under the Iskandar knowledge worker program will be taxed at a flat rate of

15%.

Qualification

To qualify for the knowledge worker program an employee needs at least a bachelor's degree and several (5-10) years’ experience in a relevant field of work.

There is no requirement for Malaysian citizenship.

The employee must be working for an approved company within the Iskandar zone, and must have started working between 24 Oct 2009 and 31 Dec 2015.

The Iskander knowledge worker programme is limited to companies working within 8 sectors:

  1. Biotech

  2. Green tech

  3. Education

  4. Creative

  5. Healthcare

  6. Financial

  7. Logistics

  8. Tourism

For a full list of conditions see here.

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