Govt extends individual income tax exemption for foreign-sourced income for another 10 years, plus other tax reliefs

The government has extended the individual income tax exemption on foreign-sourced income for another 10 years, to 31 December 2036, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced in his Budget 2025 speech.

The exemption, previously in effect from 1 January 2022 to 31 December 2026, applies to foreign-sourced income already taxed in its country of origin. It covers resident individuals across all classes of income, except income received through a partnership business in Malaysia.

Other individual tax reliefs announced

• Relief on education and medical insurance premiums raised from RM3,000 to RM4,000, effective year of assessment 2025
• Tax relief for EV chargers extended to also cover household food-waste composting machines, until year of assessment 2027, in support of the circular economy
• Relief for private retirement scheme contributions and deferred annuity premiums extended to year of assessment 2030
• Relief of up to RM8,000 on net annual SSPN (National Education Savings Scheme) savings extended a further three years, to year of assessment 2027
• Relief for childcare centre and kindergarten fees raised from RM2,000 to RM3,000, extended three years to year of assessment 2027
• Relief limit for autism treatment and rehabilitation expenses raised from RM4,000 to RM6,000

Source: The Edge Malaysia