KNOWLEDGE|
Section |
Residency Test |
Key Conditions |
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7(1)(a) |
182 Day Rule |
The individual is physically present in Malaysia for 182 days or more during the basis year. |
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7(1)(b) |
Linking Rule |
The individual’s stay of less than 182 days in the current year is linked to another period of 182 or more consecutive days in the immediately preceding or following year, including temporary absences due to service abroad, illness or short social visits (not exceeding 14 days). |
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7(1)(c) |
90 Days Rule |
The individual is in Malaysia for 90 days or more in the current basis year and in three of the four preceding years, was either resident or present in Malaysia for at least 90 days. |
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7(1)(d) |
Continuity Rule |
The individual is deemed resident for the current year if resident for the three preceding years and will be resident for the following year, even if not physically present in Malaysia during the current year, provided that both conditions in Section 7(1)(d) are satisfied. |
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7(1B) |
Malaysian Citizen Employed in Public Service or Statutory Authority |
A Malaysian citizen employed in the public service or by a statutory authority is deemed resident while serving abroad or attending fully sponsored studies overseas, notwithstanding physical absence from Malaysia. |
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a) |
182 Day Rule – Section 7(1)(a) This is the primary and most straightforward test for determining an individual’s residence status. An individual is regarded as a resident in Malaysia for a particular basis year if he or she is physically present in Malaysia for at least 182 days during that year. The day need not be consecutive, all days of presence including arrival and departure days are counted. Example Ramesh, a marine biologist from India, visited Malaysia several times in 2025 to collaborate with a local university on coral reef research. His period of stay was as follows:
The situation is summarised as follows: 
Although Ramesh’s visits were non-consecutive, his total physical presence in Malaysia amounted to 187 days and therefore, he is regarded as a resident for the YA2025 under Section 7(1)(a) of the Act.
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b) |
Linking Rule – Section 7(1)(b)
Under Section 7(1)(b) of the Act, an individual who is in Malaysia for less than 182 days in the basis year may still be treated as a tax resident, if that period of stay is linked to another period of 182 or more consecutive days in Malaysia in the immediately preceding or following year.
For the purposes of determining the continuous period of stay, temporary absences from Malaysia are allowed and will be regarded as forming part of the relevant period, provided that the individual was in Malaysia immediately before and after the temporary absence.
Temporary absences allowed include:
Example Pascal, an architect from France, was assigned to a long-term construction project in Malaysia. His periods of stay were as follows:
Pascal departed Malaysia permanently on 1 March 2025 upon completion of the project. 
In 2024, Pascal was present in Malaysia for 211 days, exceeding the minimum requirement of 182 days. He therefore qualified as a resident in Malaysia for YA2024 under Section 7(1)(a) of the ITA.
At the beginning of 2025, Pascal spent 10 days in France for a social visit before returning to Malaysia for a further 49 days. As his absence did not exceed 14 days and he was in Malaysia immediately before and after that absence, the continuity of his stay was maintained for the purpose of the 182-day link test.
Although Pascal’s total presence in Malaysia in 2025 was only 49 days, this period is linked to his 211-day stay in 2024. Accordingly, he is regarded as a resident in Malaysia for the YA2025 under Section 7(1)(b) of the ITA.
This example demonstrates that an individual who spends fewer than 182 days in Malaysia may nonetheless qualify as a tax resident if the period is linked to a qualifying 182-day period in an adjacent year and any temporary absences satisfy the prescribed conditions.
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c) |
90 Day Rule – Section 7(1)(c) Under Section 7(1)(c) of the Act, an individual who spends less than 182 days in Malaysia during a basis year may still be regarded as a tax resident if both of the following conditions are satisfied:
This provision recognises a pattern of regular presence in Malaysia, ensuring that individuals who maintain consistent ties with the country over several years are not excluded from resident status merely because their stay in a particular year is shorter.
Example Matthias, a professional consultant from Germany, frequently travels between Malaysia and his home country for project work. His period of stay and residence status are summarised below:
In 2025, Matthias was in Malaysia for 162 days, which is fewer than the standard 182 days required under Section 7(1)(a). However, he had been a resident or present in Malaysia for at least 90 days in three of the four preceding years (2021 – 2024).
Accordingly, Matthias qualifies as a tax resident in Malaysia for the YA2025 under Section 7(1)(c) of the Act.
This test ensures that individuals who demonstrate a sustained pattern of residence or connection with Malaysia continue to enjoy resident status, even if their physical presence in a particular year is comparatively shorter.
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d) |
Continuity Rule – Section 7(1)(d) Under Section 7(1)(d) of the Act, an individual is regarded as a tax resident in Malaysia for a particular basis even if he or she is not physically present in Malaysia during that year, provided that both of the following conditions are satisfied:
This provision ensures continuity of residence for individuals who have established a consistent pattern of residency in Malaysia but are temporarily absent due to overseas assignment or other short-term circumstances. Example Amelia, a Singaporean consultant, has been engaged on long-term professional assignments in Malaysia since 2021. Her periods of stay and residence status are summarised below:
In 2024, Amelia was not physically present in Malaysia, having been temporarily reassigned to her firm’s Singapore office. Nevertheless, she continued to be regarded as a resident in Malaysia under Section 7(1)(d) of the Act because:
Accordingly, even though Amelia was absent from Malaysia throughout 2024, her residency status is deemed to continue under the continuity test in Section 7(1)(d) of the Act.
Once Amelia is established as a resident in year 2025, she is required to revise her tax resident status in 2024. |
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e) |
Malaysian Citizen Employed in the Public Service or a Statutory Authority – Section 7(1B) Under Section 7(1B) of the Act, a Malaysian citizen is deemed to be a resident in Malaysia for a particular YA if the following conditions are satisfied:
This deeming provision ensures that Malaysia citizens serving the Government or statutory authorities abroad, or those temporarily overseas for fully sponsored studies, retain their resident status for Malaysian income tax purposes, even in years where they are not physically present in Malaysia.
Example Farah, a Malaysian citizen, is a senior officer with the Ministry of International Trade and Industry (MITI). She was posted to the Malaysian Trade Office in Tokyo, Japan from 1 April 2024 to 31 December 2025. Her period of stay in Malaysia and Japan was as follows:
For the YA2024 and YA2025, Farah is deemed to be a resident in Malaysia under Section 7(1B) of the Act because:
Although Farah was outside Malaysia for most of 2024 and the entire year 2025, her overseas posting forms part of her official government employment. Accordingly, she continues to be regarded as a resident for both years by virtue of Subsection 7(1B) of the Act.
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Disclaimer All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage. |
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