Guide for Labuan Expatriate Malaysia PCB – Monthly Income Tax Deduction

All expatriates including directors with work permit  earning more than RM 2,851 gross monthly income are required to pay their personal tax on a monthly basis to Inland Revenue Board (IRB) through the PCB system. Here is the guide on Malaysia PCB – Monthly Income Tax Deduction for Labuan expatriates and employees include Malaysians:

1. Labuan Company should rare an existing ‘E’ reference number with the Inland Revenue Board
2. Determine if the employee (foreign Director/expatriate/local) has gross monthly income of more than RM2,851 threshold for tax deduction eligibility.
3. Check monthly deduction for total income (salary, commission, allowances, etc) and employee’s marital status as per Table of Monthly Tax Deductions (http://lampiran.hasil.gov.my/pdf/pdfam/Jadual_PCB_2016.pdf)
4. Payment should be made along with the submission of Form CP39. (http://lampiran.hasil.gov.my/pdf/pdfborang/CP39Biasa_1.pdf)

5. Complete the CP 39 Form with the following information:
a. Employer’s ‘E’ reference number
b. Employee’s ‘SG’ reference number
c. Full name of employee
d. NRIC/Passport number of the employee
e. The amount to pay for each employees

6. All cheques/postal orders/money orders should be addressed to ‘Ketua Pengarah Hasil Dalam Negeri’.
7. Payment must be made before the 15th of each month at any IRB branch/designated branches or through bank-in with local bankers.
8. PCB filing can be done online, provided that you have applied a login access for your Labuan company.Guide for Labuan Expatriate Malaysia PCB - Monthly Income Tax Deduction

Annual compliance requirement for Labuan Company and Expatriates:
1. Your Labuan Company is required to submit Form E to IRB by 31st March annually.
2. As an individual, you are required to file and do tax computation on your personal tax return (Form BE/M) by 30th April each year based on the income you receive from your Labuan company. In the event you have overpaid taxes, filing a tax return will allow you to claim a tax refund. [Read: Labuan Personal Tax Info and Labuan Personal Tax Compliance for expatriates]

Here is the latest 2018 Personal Tax Rate for Malaysia Residents:

StagesChargeable
Income RM
Tax Rate
%
Tax Payable
RM
On the first
On the next
5,000
15,000
1
0
150
On the first
On the next
20,000
15,000
5150
750
On the first
On the next
35,000
15,000
10900
1,500
On the first
On the next
50,000
20,000
162,400
3,200
On the first
On the next
70,000
30,000
215,600
6,300
On the first
On the next
100,000
150,000
2411,900
36,000
On the first
On the next
250,000
150,000
24.547,900
36,750
On the first
On the next
400,000
200,000
2584,650
50,000
On the first
On the next
600,000
400,000
26134,650
104,000
On the first
Above
1,000,000
1,000,000
28238,650

For additional information pertaining to personal tax and contribution to PCB, please refer to www.hasil.gov.my.We will guide you to engage a licensed tax agent to provide complete tax solutions service to meet your needs at an affordable price!


Contact us once you decide to start your Labuan set-up, we will provide you complete solutions every step of the way including your tax issues! We simply simplified your investment in Labuan”. Feel free to send us your enquiry today to provide a complete guide to ensure Labuan Offshore is right for you!

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