# Withholding Tax Rates in Malaysia by Payment Type > Every Malaysian withholding tax rate in one table — payment type, ITA section, rate, form and remittance deadline. - Category: taxation - Language: en - Status: published - Updated: 2026-07-20 - Canonical: https://negaraku.md/en/taxation/withholding-tax-rates --- The rate you need is almost never in the section you are reading. Section 109B tells you to withhold “at the rate applicable to such payments” and stops there — the 10 per cent is in Part V of Schedule 1. Section 109 does the same. Get into the habit of citing both, because an argument about rate is an argument about Schedule 1. ## The full table | Payment type | ITA section | Rate | Form | Remit by | | --- | --- | --- | --- | --- | | Contract payment to a non-resident contractor | s.107A, Sch 1 | 10% (contractor) + 3% (its employees) | CP37A | 1 month after paying or crediting | | Payment to a resident agent, dealer or distributor | s.107D, Sch 1 | 2% | CP107D | End of the **following calendar month** | | Interest to a non-resident | s.109, Sch 1 Pt II item 1 | 15% | CP37 | 1 month after paying or crediting | | Royalty to a non-resident | s.109, Sch 1 Pt II item 2 | 10% | CP37 | 1 month after paying or crediting | | Interest or royalty, small value | s.109, Sch 1 Pt II | 15% / 10% | CP37S | Half-yearly, 30 June or 31 December | | Non-resident public entertainer | s.109A, Sch 1 Pt II item 3 | 15% | CP154 plus LHDN tax computation | 1 month after paying or crediting | | Special classes of income under s.4A | s.109B, Sch 1 Pt V | 10% | CP37D | 1 month after paying or crediting | | Special classes of income, small value | s.109B, Sch 1 Pt V | 10% | CP37DS | Half-yearly, 30 June or 31 December | | Interest to a resident individual, paid by a bank or approved institution | s.109C, Sch 1 Pt VI | 5% | — | 1 month after paying or crediting | | REIT or property trust distribution — non-resident company | s.109D, Sch 1 Pt X | 24% | CP37E | 1 month after paying or crediting | | REIT or property trust distribution — foreign institutional investor | s.109D, Sch 1 Pt X | 10% | CP37E | 1 month after paying or crediting | | REIT or property trust distribution — others, not a resident company | s.109D, Sch 1 Pt X | 10% | CP37E | 1 month after paying or crediting | | Retail money market fund distribution to a non-individual unit holder | s.109DA, Sch 1 Pt XIX | 24% | CP37E(NR) / CP37E(R) | 1 month after paying or crediting | | Family or takaful family fund distribution — non-resident company | s.109E, Sch 1 Pt XI | 25% | CP37E(T) | 1 month after paying or crediting | | Family or takaful family fund distribution — others, not a resident company | s.109E, Sch 1 Pt XI | 8% | CP37E(T) | 1 month after paying or crediting | | Paragraph 4(f) income to a non-resident | s.109F, Sch 1 Pt XIII | 10% | CP37F | 1 month after paying or crediting | | Deferred annuity or PRS withdrawal before age 55 | s.109G, Sch 1 Pt XVI | 8% | CP37G | 1 month after paying or crediting | ## The three things this table hides **“Paying or crediting” is not “paying”.** Public Ruling 10/2019 para 13.1 defines crediting as more than a journal entry or an accrual — the amount must be available to or for the benefit of the payee. But a contra entry offsetting what the non-resident owes you counts, and the clock starts on the contra date. A company that never remits cash can still be a month late. **Section 107D has a different clock.** Section 107D(1) requires payment “not later than the end of the following calendar month”, not one month after. It also only bites where the agent, dealer or distributor received more than RM100,000 from the payer in the immediately preceding basis year (s.107D(2)), and only where that person is a resident individual (s.107D(6)). **Treaty rates are conditional, not automatic.** LHDN requires written confirmation from the payee's revenue authority verifying residence, retained for compliance review. Public Ruling 10/2019 Example 16 applies a 5 per cent rate to a Hong Kong service provider only once residence is confirmed. Without the certificate you withhold at the domestic rate. ## Common mistakes - **Quoting a rate without the Schedule.** “Section 109B is 10 per cent” is shorthand. The 10 per cent is Part V of Schedule 1, and Part V is what a treaty displaces. - **Assuming the small-value forms are optional convenience.** CP37S and CP37DS have two cumulative conditions: the tax must not exceed RM500 per payment transaction, **and** small-value transactions must occur more than once in the relevant six-month window. A single RM400 payment in a half-year does not qualify for deferment. - **Treating s.107A as a final tax.** It is not. Paragraph (a) is applied against the contractor's own assessment; paragraph (b), the 3 per cent, is refunded to the contractor under s.107A(3)(b) as the Director General sees fit. - **Withholding on the gross where the payment is partly outside scope.** For s.4A(i) and (ii) income, only the portion attributable to services performed in Malaysia is taxable, apportioned on a fair and justifiable basis. ## What's next The rate is the easy part. Two questions decide most real cases: whether the payment is “derived from Malaysia” at all, and whether it is royalty under s.109 or a special class of income under s.109B. Read [withholding-tax-special-classes](/en/taxation/withholding-tax-special-classes) for the first and [withholding-tax-digital-services](/en/taxation/withholding-tax-digital-services) for the second. ## Sources - Withholding Tax — https://www.hasil.gov.my/en/perundangan/cukai-pegangan/ (LHDN) - Income Tax Act 1967 (Act 53), reprint as at 21 May 2024 — Schedule 1 and ss.107A, 107D, 109, 109A, 109B, 109F — https://www.hasil.gov.my/wp-content/uploads/20240521-akta-cukai-pendapatan-1967-akta-53.pdf (LHDN) - Public Ruling No. 10/2019 — Withholding Tax on Special Classes of Income — https://www.hasil.gov.my/wp-content/uploads/PR_10_2019.pdf (LHDN) - Double Taxation Avoidance Agreement (DTA/DTAA) — https://www.hasil.gov.my/en/antarabangsa/perjanjian-pengelakan-pencukaian-dua-kali-pppdk/ (LHDN) --- Source of truth: https://github.com/negaraku-md/NegaraKu.md License: CC BY-SA 4.0