PR 1/2010 Withholding Tax on Income under Paragraph 4(f)

- Effective 01.01.2009 with the introduction of new section 109F of ITA

Criteria to determine a payment fall under Paragraph 4(f)
(a) the payment is revenue and not capital in nature;
(b) the payment is not income that falls under paragraphs 4(a) to 4(e) and section 4A of the ITA;
(c) the payment received by a non-resident person is in the nature of a miscellaneous income. Such income is often casual in nature. Casual income means an occasional income, which is received outside the ordinary course of trade or vocation;
(d) the payment is for an isolated transaction; and
(e) there is an absence of repetition of transactions to indicate the commercial nature of the transaction.

Gains or profits under Paragraph 4(f) of the ITA deemed to be derived from Malaysia irrespective of whether transactions are carried on in Malaysia or not

e.g. commission, guarantee fees

Form CP37F – Section 109F, ITA –Payment to a non-resident chargeable under Paragraph 4(f) ITA