Tax Exemption for Sale by Non-Residents of Personal Use Software

The Income Tax (Exemption) (No. 4) Order 2019 (“EO4/19”) was gazetted on 28 May 2019 and is deemed to have come into operation on 1 March 2019.  
Under EO4/19, a non-resident of Malaysia is exempted from payment of income tax in respect of income derived from Malaysia in relation to payments for –
  • shrink-wrapped software;
  • site-licence;
  • downloadable software; or
  • software bundled with personal computer hardware, smartphone or tablet,
which is received from an end user who is an individual resident in Malaysia who purchases or acquires a right to use software for personal use and not business use.
Section 109 (deduction and withholding of tax from certain interest and royalties) of the income Tax Act 1967 shall not apply to income exempted under EO4/19.