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Malaysia Withholding tax rates

Malaysia Withholding tax rates: no single figure applies. The reason is set out below, cited to the governing instrument. Last checked against the official source on 11 Aug 2026.

The withholding taxes Malaysia levies on payments to non-residents - interest and royalties under s.109, special classes of income (technical services, installation, rent of movable property) under s.109B, and public entertainers under s.109A - each at its domestic statutory rate before any double taxation agreement relief. Dividends carry no withholding under the single-tier system. Levied under the Income Tax Act 1967 with rates in Schedule 1 Part II; administered by LHDN (Inland Revenue Board of Malaysia).

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Current valuestructured — see the API
In force from—
Official sourceIncome Tax Act 1967 [Act 53], consolidated text 'As At 01-01-2026' published by the Attorney General's Chambers. Schedule 1 Part II: 'Notwithstanding Part I, income tax shall be charged on the following income at the following rates— 1. Income of a non-resident person consisting of interest (other than interest on an approved loan or interest of the kind referred to in paragraph 33 of Part I, Schedule 6) derived from Malaysia … 15% of gross; 2. Income of a non-resident person consisting of royalty derived from Malaysia … 10% of gross; 3. Income of a non-resident person (other than a company) consisting of remuneration or other income in respect of services performed or rendered in Malaysia by a public entertainer … 15% of gross'. Schedule 1 Part V separately charges the s.4A special classes of income of a non-resident person 'which is derived from Malaysia at the rate of 10% of gross'. The deduction obligations are s.109 (interest or royalty), s.109A ('The provisions of sections 109 and 110 shall apply mutatis mutandis to remuneration or other income in respect of services performed or rendered in Malaysia by a public entertainer'), s.109B (special classes of income) and s.107A(1) (contract payments to a non-resident contractor: 'ten per cent of the contract payment on account of tax which is or may be payable by that non-resident contractor' plus 'three per cent of the contract payment on account of tax which is or may be payable by employees of that non-resident contractor'). The Inland Revenue Board's own withholding-tax page (Lembaga Hasil Dalam Negeri Malaysia, 'Cukai Pegangan', hasil.gov.my/perundangan/cukai-pegangan/) states the same four rates: interest 15%, royalty 10%, public entertainer 15%, special classes of income 10%.
Last verified2026-08-11
Verificationprimary — No verification limitation recorded — read from the official source cited.
Provenancesource fingerprint

What this value means

THERE IS NO SINGLE WITHHOLDING TAX RATE, WHICH IS WHY value IS NULL. Malaysia withholds at 15% on interest, 10% on royalties and 10% on s.109B special classes of income (technical and other service fees, installation fees, rent of movable property), while dividends carry no withholding at all. A caller wanting a number must name which payment type; read withholding_rates rather than expecting a headline figure. ALL RATES ARE DOMESTIC STATUTORY RATES, BEFORE TREATY RELIEF. A double taxation agreement can reduce the interest, royalty and s.109B withholding, and whether relief is available depends on the recipient's residence and the agreement's conditions. We do NOT serve treaty rates: they are bilateral, run to many country pairs, and applying one is a legal determination rather than a lookup. DIVIDEND CLARIFICATION: under the single-tier system (in force since 2008) company tax is final and dividends are exempt in shareholders' hands, resident or not - there is no dividend withholding head. Do not confuse this with the 2% DIVIDEND TAX introduced by Budget 2025 (Finance Act 2024): from year of assessment 2025 that tax applies to INDIVIDUAL shareholders (including non-resident individuals) on chargeable dividend income exceeding RM100,000, and it is collected by ASSESSMENT through the shareholder's return, not by withholding on the payment. It is therefore not a withholding tax and is not served as a rate here beyond this note. CITATIONS REBUILT 11 August 2026. No served rate changed — interest 15%, royalty 10%, special classes 10%, dividends 0% and the s.107A 10%+3% contract-payment deduction were all re-verified word for word against the Attorney General's Chambers' consolidated Income Tax Act 1967 [Act 53] as at 1 January 2026, which already incorporates the Finance Act 2025 [Act 874] (no Finance Act has been passed since). Three defects in the previous citations were corrected. (1) The rate for special classes of income under s.109B is fixed by Schedule 1 PART V of the Act, not Schedule 1 Part II as this record previously stated; Part II reaches only non-resident interest, royalty and public-entertainer income, and LHDN's own Public Ruling No. 10/2019 para. 2.2 lists 'Part V, Schedule 1' among the governing provisions. (2) The dividends entry was sourced to a commercial tax-firm summary (PwC Worldwide Tax Summaries) and is now sourced to the statute itself — Income Tax Act 1967 Schedule 6 para. 12B and s.6(1)(r) with Schedule 1 Part XXII. (3) The sentence 'Payment of special classes of income made to non-resident payees is subject to 10% withholding tax' was attributed to Public Ruling No. 10/2019; it does not appear in that ruling (it was LHDN web-page wording) and has been replaced with text that does. RETRIEVAL GOTCHAS: LHDN rebuilt its site onto WordPress and dropped the /en/ and /ms/ language prefixes, so every www.hasil.gov.my/en/... path now 404s — the withholding-tax page is at www.hasil.gov.my/perundangan/cukai-pegangan/ and public rulings are at www.hasil.gov.my/wp-content/uploads/PR_<no>_<year>.pdf (Malay: KU_<no>_<year>.pdf). The old public-rulings host phl.hasil.gov.my no longer resolves at all (connection refused), so every phl.hasil.gov.my citation is dead. On the AGC side, lom.agc.gov.my act-view.php and act-detail.php deep links now return a 15-byte 'Invalid request' body under HTTP 200 for every instrument; only the gazette/consolidation PDF paths under /ilims/upload/... serve documents. The Act 53 consolidation is republished annually under a new project id and filename (currently 'Act 53 (Online 2026).pdf'), so expect this URL to need re-resolution after the next consolidation.

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Other Malaysia series: Overnight Policy Rate (OPR) · Statutory late-payment interest · Value Added Tax · VAT registration threshold · National Minimum Wage · Public Holidays · Consumer Price Index (annual inflation) · Corporate Income Tax · Personal Income Tax · Statutory social-insurance contributions

The same figure elsewhere: Nepal · Oman · Pakistan · Philippines · Qatar · all 28