История с сайта Deloitte
By Chee Ying Cheng, Global Employer Services Executive Director of Deloitte Malaysia
Meet Ms JB.
Ms JB is a Malaysian citizen residing in Malaysia. She is employed by SG Pte Ltd as a graphic designer and reports to a marketing manager in Singapore. SG Pte Ltd is registered and based in Singapore, with no business presence in Malaysia.
Meet Mrs SK.
Mrs SK, a Korean citizen is married Mr PNG, a Malaysian citizen. She is employed by KR Limited, a company based in Korea with no business presence in Malaysia. She provides HR support to her employer in Korea, while holding a spouse visa in Malaysia.
Meet Mr AM.
Mr AM, an American, prefers to spend the winter months in tropical countries. As such, he is opting to work remotely from Malaysia between the months of September and January. However, since his employer (a company registered and based in the US) does not have a business presence in Malaysia, Mr AM enters Malaysia with a social visit pass.
Catch me if you can
Let’s set out the broad rules/ principles
with respect to the Malaysian personal income tax, immigration and social
security laws:
Employment that is exercised in Malaysia shall be taxed in Malaysia.
A foreign company that does not have a business presence in Malaysia is practically not viable to fulfill employer’s tax and social security obligations in Malaysia in respect of its Malaysian employees. For example, such companies are practically not able to register itself as an employer for tax and social security purpose. Employee will thus have to make voluntary contribution or tax payment to the relevant authorities, such as Employees Provident Fund (EPF) and Income Tax.
A non-Malaysian citizen can only work in Malaysia if they possess a valid work pass, of which it is required that they are employed/sponsored by a Malaysian entity.
Now, with these broad principles in mind – how do you think these requirements will affect Ms JB, Mrs SK and Mr AM?
Technically, all three of them are liable to personal income taxes in Malaysia. However, the local tax authorities are not aware that they are working in Malaysia.
It is practically not viable for SG Pte Ltd and KR Limited to fulfill the Malaysian employer’s tax and social security obligations on the basis that it is a foreign entity with no business presence in Malaysia.
Ms JB will not be covered by Malaysian social security protection such as EPF and SOCSO from her employer despite being a Malaysian citizen, simply because her employer cannot be registered to the EPF and SOCSO in Malaysia and she does not have a Malaysian employment contract.
The remote working arrangement of Mrs SK and Mr AM will not be regulated with a valid work pass as they are not able to obtain one without a local sponsor.
These remote working individuals are slipping through the cracks, as there is no avenue or guidance provided to facilitate tracking them, and ensuring they comply with local laws and regulations. This in turn, would result in a potential loss of tax revenue for Malaysia.
