Withholding tax changes a headache for firms
SM Thanneermalai | 11 Aug 2017 00:30
The 2017 Budget widened the scope of the withholding tax regime and reopened the old concerns on the interpretation of this tax regime. The changes have not only added to the cost of doing business but also increased the difficulty for businesses to decide whether or not to deduct withholding tax on payments made to non-residents (foreigners who have no business presence or do not file any tax returns in Malaysia).

The recent law decision case has made it practically mandatory for the payer to deduct the withholding tax despite the double tax agreement providing the recipient protection from such withholding tax (Teraju Sinar case).

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