# Tax Residence for Individuals: the Four Tests in s.7(1)

> How Malaysia decides whether an individual is tax resident, including the linking-period and temporary-absence rules that turn a short stay into a resident year.

- Category: taxation
- Language: en
- Status: published
- Updated: 2026-07-20
- Canonical: https://negaraku.md/en/taxation/individual-tax-residence

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An expatriate lands in Kuala Lumpur on 1 October, works to year end, and his
payroll team deducts tax at the flat non-resident 30% because he was in the
country for 92 days. He stays through the following June. He was resident for
both years — and the employer has over-deducted for three months on a rule it
never read.

Residence carries the whole personal tax system on its back. Resident status
buys the progressive scale starting at 0%, every relief in s.46 and s.48, and
the s.6A rebates. Non-residence means a flat 30% on the first ringgit with none
of it. The difference on a RM120,000 package is tens of thousands of ringgit.

And residence is decided by **four independent tests** in s.7(1) of the Income
Tax Act 1967. Meeting any one of them is enough. Consumer guides publish the
first and stop.

## Test one: 182 days or more

Under s.7(1)(a), an individual is resident if he is in Malaysia in that basis
year for a period or periods **amounting in all** to 182 days or more.

Two details matter. The days need not be consecutive — Public Ruling 11/2017
Example 3 adds a 122-day stay to a 61-day stay to reach 183. And under s.7(1A)
an individual is **deemed to be in Malaysia for a day if he is present for part
of that day**, so arrival and departure days are both full days.

## Test two: a short period linked to a 182-day block

This is the provision that decides most expatriate arrival and departure years,
and it is the one almost nobody outside the profession applies.

Under s.7(1)(b), an individual is resident if he is in Malaysia in the basis
year for **less than 182 days**, and that period is linked by or to another
period of **182 or more consecutive days** throughout which he is in Malaysia
in the basis year for either the immediately preceding or the immediately
following year of assessment.

So the short year borrows residence from the long year next to it. The link
runs in both directions — backwards to the year you arrived, forwards to the
year you leave.

**The 182 days in the adjacent year must be consecutive**, unlike the 182 days
under test one. That asymmetry is deliberate and it is where the test usually
fails.

### The temporary-absence proviso

A holiday in the middle of the block would otherwise break the consecutive
run. The proviso to s.7(1)(b) prevents that. Any temporary absence from
Malaysia:

1. connected with his service in Malaysia and owing to service matters or
   attending conferences or seminars or study abroad;
2. owing to ill-health involving himself or a member of his immediate family;
   and
3. in respect of social visits **not exceeding fourteen days in the aggregate**,

is taken to form part of the period — **if he is in Malaysia immediately prior
to and after that temporary absence**.

Public Ruling 11/2017 para 6.2.3 reads "immediate family" as parents, spouse
and children, and treats a social visit as any form of holiday outside
Malaysia including one to the home country. The fourteen days is an annual
aggregate across all social absences, not fourteen days per trip.

The before-and-after requirement is absolute. An absence that runs to the end
of the year, with no return, is not a temporary absence — it is a departure.
Public Ruling 11/2017 Example 6 refuses to treat the last eight days of
December as part of a linking period where the individual left on 23 December
and never came back.

## Test three: 90 days plus a qualifying history

Under s.7(1)(c), an individual is resident if he is in Malaysia in the basis
year for periods amounting in all to **90 days or more**, having been, with
respect to **each of any three of the basis years for the four years of
assessment immediately preceding** that year, either:

- resident in Malaysia within the meaning of the Act for that year; or
- in Malaysia for periods amounting in all to 90 days or more.

The two limbs are alternatives and they can be mixed across the three
qualifying years. A year in which you were resident under any of the four tests
counts, and so does a year in which you were merely present for 90 days without
being resident.

The look-back is four years and you need three of them — not the last three
consecutively. LHDN's own web summary of this test is loose, describing the
first limb as being resident "as defined by section 7". Read the Act.

## Test four: the sandwich year

Under s.7(1)(d), an individual is resident for a basis year if he is resident
for the basis year of the **following** year of assessment, having been
resident for **each** of the basis years of the three immediately preceding
years of assessment.

There is no presence requirement at all. Public Ruling 11/2017 para 6.4 states
it plainly: an individual can be resident under s.7(1)(d) even if he was not in
Malaysia at all during that basis year. Example 17 makes a Hong Kong accountant
resident for 2016, a year with zero days in Malaysia, on the strength of
2013–2015 and 2017.

Test four is a bridge, not an entry route. It cannot start a residence chain —
it needs three resident years behind it and one in front.

## The civil service override

Section 7(1B) sits outside the four tests. A **Malaysian citizen** employed in
the public service or the service of a statutory authority who is not in
Malaysia on any day of the basis year, because he is exercising his employment
outside Malaysia or attending a fully employer-sponsored course of study
abroad, is deemed resident for that year and for every subsequent basis year in
which he is not in Malaysia. Diplomats and seconded officers stay resident
indefinitely.

## Applying the tests in order

| Question | Section | If yes |
| --- | --- | --- |
| 182 days or more this year, consecutive or not? | s.7(1)(a) | Resident |
| Fewer than 182 days, but linked to a consecutive 182-day block in the adjacent year? | s.7(1)(b) | Resident |
| 90 days or more, plus residence or 90-day presence in three of the last four years? | s.7(1)(c) | Resident |
| Resident next year and in each of the three preceding years? | s.7(1)(d) | Resident |
| Citizen in public service, absent all year on duty? | s.7(1B) | Deemed resident |
| None of the above | Schedule 1 Part I para 1A | Non-resident, flat 30% |

Test four depends on the following year, which is not knowable until that year
closes. In practice you file on the position you have and amend, or you claim
under s.7(1)(b) at filing time and support it with travel records.

## Common mistakes

- **Counting only whole days.** Section 7(1A) deems part of a day to be a day.
  A red-eye arrival on 3 July and a departure on 31 December is 182 days, not
  180.
- **Treating the 182 days in the linking year as non-consecutive.** Test one
  aggregates; test two requires 182 **consecutive** days in the adjacent year.
  Guides that state a single 182-day rule collapse the two.
- **Assuming the Employment Pass determines residence.** A two-year pass grants
  no residence for the arrival year. Residence is counted in days under s.7(1)
  and reassessed for every basis year.
- **Spending fifteen days on holiday.** The social-visit allowance is fourteen
  days **in the aggregate** for the year. The fifteenth day breaks the
  consecutive block and can cost the whole linking claim.
- **Stopping at the 90-day figure.** Test three has a history requirement.
  Ninety days in a year with no qualifying prior years produces non-residence.
- **Reading residence off a certificate.** A Certificate of Residence issued
  for treaty purposes evidences a determination already made under s.7; it does
  not make one.

## What's next

Once residence is settled, it drives the rate you pay, the reliefs you can
claim and the return form you file. Check the rate table for your year of
assessment, and if you are here on an Employment Pass, work through the
non-resident and knowledge-worker rates before your employer sets your PCB.

## Sources

- Income Tax Act 1967 (Act 53), reprint of 21 May 2024 — s.7 — https://www.hasil.gov.my/wp-content/uploads/20240521-akta-cukai-pendapatan-1967-akta-53.pdf (Attorney General's Chambers)
- Ketetapan Umum No. 11/2017 — Taraf Mastautin Individu — https://www.hasil.gov.my/wp-content/uploads/KU_11_2017.pdf (Lembaga Hasil Dalam Negeri Malaysia)
- Taraf Mastautin — Individu — https://www.hasil.gov.my/individu/taraf-mastautin/ (Lembaga Hasil Dalam Negeri Malaysia)

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