FAQ on Special Income Remittance Programme (PKPP)

FAQ on Special Income Remittance Programme (PKPP)
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FAQ on Special Income Remittance Programme (PKPP)

IIRBM has issued the frequently asked questions (FAQ) on the PKPP on 17 December 2021 following the media release on - Special Program (PKPP) on remittance of foreign income dated 16/11/21.

IRBM encourages taxpayers to participate in this special program that is offered to update their tax position.

Key summary of the FAQ on PKPP :

  • The implementation period of PKPP is from 1 January 2022 to 30 June 2022 (PKPP period).

  • Individuals, companies, LLP & etc which are Malaysia tax residents are eligible for PKPP.

  • Foreign income from business, employment, dividend, rental, interest, royalty or others are covered under PKPP.

  • Foreign income is “received” when the income is remitted, brought in, transferred into Malaysia physically or via banking methods.

  • A tax rate of 3% (gross) on income brought into Malaysia during the said period.

  • There is no audit review, investigation or penalty on income brought into Malaysia during the PKPP period.

  • All income brought into Malaysia will be accepted in good faith by IRBM.

  • Income must be brought into / remitted into Malaysia within the PKPP period.

  • Taxpayers must make a declaration to join the PKPP not later than 30 days after the expiry of the PKPP period.

  • Tax payments shall be made in accordance with the normal payment arrangements prescribed for the year of assessment 2022 or 2023 whichever is applicable.

  • PKPP does not involve income derived from Malaysia which is subject to tax for the year of assessment 2021 and subsequent years of assessment and is remitted into or brought back to Malaysia during the PKPP period.

  • Taxpayers can claim foreign tax credit (either foreign income tax or withholding tax). The claim must be supported with documentary proof.

  • Taxpayers can make an online declaration with Borang PKPP which can be accessed through MyTax from 1 January 2022 onwards.

  • Taxpayers are required to report the foreign income remitted in the tax return form for YA 2022 - 2023.

KTP takeaways

IRBM will review and examine the information on income of the Malaysian tax residents kept overseas that has been received through the tax information exchange agreements with other countries after 30/6/22.

Based on the review, if IRBM found that Malaysian source income kept overseas has not been reported, additional assessment can be raised together with penalties.

IRBM will issue frequently asked questions (FAQs) as well as guidelines relating to the PKPP to the public in due course.

Source

IRB FAQ on PKPP (in Bahasa)

https://phl.hasil.gov.my/pdf/pdfam/FAQ_PKPP_1.pdf

IRBM media release on PKPP

https://phl.hasil.gov.my/pdf/pdfam/KM_LHDNM_16112021_PROGRAM_KHAS_PEREMITAN_PENDAPATAN_YANG_DISIMPAN_DI_LUAR_NEGARA.pdf

Update on the tax on remittance of foreign source income into Malaysia

1. IRBM Media Release on PKPP 7/12/2021

https://www.ktp.com.my/blog/irbm-special-remittance-program-pkpp/08dec21

2. Finance Bill on foreign source income remitted into Malaysia 10/11/2021

https://www.ktp.com.my/blog/foreign-source-income-malaysia-taxable/10nov21

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