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%).

  • Tax exemption for car, up to a maximum of value of RM150,000.

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

Qualification

To qualify for the returning expert program an employee must:

  • be a Malaysian citizen; and

  • be residing and employed abroad continuously for at least 3 years at the 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 RM20,000.

For a full list of conditions see here.


Iskandar 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 apply by 31 Dec 2020.

The Iskandar knowledge worker programme is limited to companies working within 9 sectors:

  1. Biotech

  2. Green tech

  3. Education

  4. Creative

  5. Healthcare

  6. Global business services

  7. Logistics

  8. Tourism

  9. Motorsports

For a full list of conditions see here.

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