Move to tax foreign-sourced income in Malaysia not a surprise

Kuala Lumpur

THE Malaysian government's move to remove the exemption of tax from foreign-sourced income (FSI) is likely in response to the country's inclusion in the European Union's (EU) grey list, where Malaysia's territorial sourced tax regime is considered harmful, analysts said.

The tax proposal is not surprising, said accounting firm Deloitte Malaysia in a report, as the EU is concerned only where such regimes create situations of double non-taxation.