Withholding Tax·Step 1 of 3
03 · Tax and compliance

Withholding Tax

预扣税（Withholding Tax）怎么算？付给外国公司的广告费、软件费、版权费，先扣多少、几时交。

Paying Meta, Google or an overseas consultant? Work out what to hold back, which form it goes on, and when.

The payment

Withholding tax is deducted by you, the payer, out of a payment to a non-resident, and remitted to LHDN. It is not a cost the payee agrees to — it is your obligation, and getting it wrong makes the expense non-deductible.

If the contract says the payee receives a fixed sum “free of all taxes”, choose net — the payment has to be grossed up and the tax works out higher than the headline rate.

The tax

Withholding tax is charged on the gross. Paying the payee in full and settling the tax on top does not remove the liability — it just means you have borne it yourself, and the sum you actually paid then has to be grossed up.

Pay and file

How to remit it

  1. Sign in to MyTax at mytax.hasil.gov.my with your company’s digital certificate, and open e-WHT (ByrHASiL → withholding tax).
  2. Choose the form the payment falls under — CP37 for this one — and key the payee, the gross amount and the date of payment or crediting.
  3. Attach the supporting documents: the invoice, proof of payment, and the Certificate of Residence if you are claiming a treaty rate.
  4. Pay the tax, and keep the acknowledgement. The receipt is what proves the deduction is allowable if the file is ever reviewed.

A paper form can still be lodged at an LHDN branch, but e-WHT is the route that gives you an immediate acknowledgement.

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A free tool from LTT Outsourced CFO Sdn. Bhd. · more KiraKira tools · ltt@lttcfo.com
General information on withholding tax under the Income Tax Act 1967 and LHDN Practice Note 1/2018. Not advice on your payment. Treaty rates turn on the payee’s residence and on holding a valid Certificate of Residence — check both before you deduct.
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