Tax residence in Malaysia for U.S. citizens and green card holders

Malaysia treats you as resident if you spend 182 days or more there in a calendar year, with any part of a day counting as a full day. Fewer days can be enough: if they are linked to at least 182 consecutive days in Malaysia within the previous or the next calendar year, if you have spent 90 days or more there in earlier years, or if you were resident in the three previous years and will be in the next. Malaysia taxes foreign income only when it is received in Malaysia, and a resident individual's foreign income received there by 31 December 2036 is exempt if it was taxed in the country of source. There is no comprehensive income tax treaty between the United States and Malaysia, so U.S. citizens and other U.S. residents rely on the U.S. foreign tax credit or the foreign earned income exclusion.

Check your status: United States and Malaysia

Free, no sign-up, about 3 minutes. Conclusion under U.S. law, compared with the law of Malaysia and the tax treaty.

When Malaysia treats you as a tax resident

Malaysia counts days in the calendar year (an individual's basis year), and the threshold is 182 days (not 183): 182 days or more make you resident. Any part of a day in Malaysia counts as a full day, so the days of arrival and departure count too. Citizenship, visa or owning a home do not matter for this test.

Malaysia links years together: even fewer than 182 days in the selected year make you resident if those days are linked to a period of at least 182 consecutive days in Malaysia that lies entirely within the previous or the next calendar year (for example, you were in Malaysia from 1 March to 31 December of the previous year and stayed on into the selected year). A stay that merely crosses 31 December is not enough: from September to April, neither year contains 182 consecutive days. Business trips for your Malaysian job, medical treatment (yours or a close relative's) and social visits of up to 14 days in total do not break the period if you were in Malaysia before and after the trip; a longer holiday abroad does. The 14-day allowance for social visits covers both periods together.

The second rule is for people who come to Malaysia year after year: 90 days or more in the selected year make you resident if, in any three of the four preceding years, you were resident in Malaysia or spent at least 90 days there. The criteria can be combined — for example, two years of residence and one year with 90 days.

The third rule keeps your status for a year in which you were hardly or not at all in Malaysia (for example, studying or working abroad for a long time): you are resident if you were resident in each of the three preceding years and will be resident in the following year. So your final status for such a year is known only after the following year ends.

For Malaysian citizens in the public service (or with a statutory authority) who spent the selected year abroad because of that work or on study fully paid by the employer, a special rule applies: they are treated as resident.

You spent 182 days or more in Malaysia in the calendar year (counting every part day) — you are a Malaysian tax resident for that year (s. 7(1)(a) ITA 1967). Malaysia taxes income from Malaysian sources at progressive rates from 0 to 30%; foreign income only if it is remitted to Malaysia, and for individuals it is exempt until 31 December 2036 if it was taxed in the country of source.
Fewer than 182 days in the selected year, but they are linked to a period of at least 182 consecutive days in Malaysia within the previous or the next calendar year — you are a Malaysian resident for this year (s. 7(1)(b) ITA 1967). The conclusion is probable: check that those 182 consecutive days really fall within one adjacent year and that every trip abroad was a permitted temporary absence (social visits — no more than 14 days in total across both periods).
You spent 90 days or more in Malaysia, and in three of the four preceding years you were resident there or spent at least 90 days there — you are a Malaysian resident for this year (s. 7(1)(c) ITA 1967). Back up your answer about the earlier years with documents (passport stamps, LHDN statements).
You were a Malaysian resident in each of the three preceding years and are (or will be) resident in the following year — you are resident for the selected year too, even if you were hardly in Malaysia (s. 7(1)(d) ITA 1967). The conclusion depends on your status in the following year: if you do not become resident then, the rule does not apply.
As a Malaysian citizen in the public service (or with a statutory authority) who was abroad because of that work or on study fully paid by the employer, you are treated as a Malaysian resident for this year (s. 7(1B) ITA 1967).

When you are a nonresident

You meet none of the criteria of s. 7 ITA 1967 — you are not a Malaysian resident for this year. Malaysia may tax only your Malaysian-source income, at a flat 30% without reliefs (certain types through withholding tax at source).
Your answers suggest you are probably not a Malaysian resident, but you answered «Not sure» to one of the questions (continuous period, earlier years or the following year). Count your days in Malaysia for the selected, earlier and following years — any of the criteria in s. 7(1)(b)–(d) can make you resident.

Where the rules of Malaysia clash with U.S. tax rules

Collision: resident of both countries — no tie-breaker. Malaysia treats you as resident under s. 7 ITA 1967, and the United States taxes you as a citizen, green-card holder or substantial-presence resident. Without a treaty nothing resolves the conflict. In practice the overlap is narrower than it looks: Malaysia taxes income arising in Malaysia, and foreign income only when it is received in Malaysia — and foreign income of a resident individual received there by 31 December 2036 is exempt if it was taxed in the country of source. Double tax therefore falls mainly on Malaysian-source income (pay for work done in Malaysia, Malaysian rents, gains on Malaysian real property): Malaysia taxes it as the source country, and the United States credits the Malaysian tax or lets you exclude foreign earned income under § 911.
Collision: Malaysia can make you resident with fewer than 182 days. Malaysia may treat you as resident for a year in which you spent fewer than 182 days there: if those days are linked to at least 182 consecutive days in Malaysia within the previous or the next year (s. 7(1)(b)), if you have come for 90 days or more in earlier years (s. 7(1)(c)), if you were resident before and after that year (s. 7(1)(d)), or as a Malaysian civil servant posted abroad (s. 7(1B)). The United States also looks beyond one year: the substantial presence test weighs the days of the two preceding years, and citizens and green-card holders are resident whatever the days. Both countries can therefore treat you as resident for the same year, and with no treaty there is no tie-breaker to settle it.
Collision: green-card holder resident in Malaysia — no treaty to rely on. A green card makes you a U.S. resident for the whole year regardless of the days you spend in the United States. Where a treaty exists, a green-card holder can sometimes claim treaty residence in the other country; with no U.S.–Malaysia treaty that route is closed, and the closer connection exception is part of the substantial presence test, which does not apply to green-card holders. So while you hold the green card, the United States taxes your worldwide income and Malaysia taxes you under its own rules; double tax is relieved only by the U.S. foreign tax credit or the foreign earned income exclusion. The status lasts until the green card is formally revoked or abandoned (Form I-407).

What else to know

No income tax treaty between the United States and Malaysia. The United States and Malaysia have no comprehensive income tax treaty — only a limited agreement exempting income from shipping and air transport (Kuala Lumpur, 18 April 1989). Consequences: there is no tie-breaker, so you can be a full resident of both countries at once; no 183-day rule protects short work trips; Malaysian withholding rates on payments to U.S. residents are not reduced; there is no mutual agreement procedure. Double tax is relieved only unilaterally: in the United States by the foreign tax credit or the foreign earned income exclusion (§ 911); in Malaysia mainly by its exemption for foreign income of resident individuals — foreign income received in Malaysia by 31 December 2036 is exempt if it was taxed in the country of source.
Not a U.S. citizen or green-card holder: without a treaty only the closer connection exception helps. You are a U.S. resident only under the substantial presence test. With no U.S.–Malaysia treaty you cannot claim treaty nonresidence under a tie-breaker. The only way out of U.S. residence is the closer connection exception: fewer than 183 days in the United States in the year, a tax home in Malaysia for the whole year, a closer connection to Malaysia than to the United States, a timely Form 8840, and no green-card application (e.g. Form I-485). If it applies, you are a nonresident alien taxed in the U.S. only on U.S.-source income and income connected with a U.S. business.
Malaysia counts 182 days, and part of a day is a day. Malaysia's threshold is 182 days in the calendar year (also in a leap year), and any part of a day in Malaysia counts as a full day, so the days of arrival and departure count. The United States also counts every day of presence, but its substantial presence test requires at least 31 days in the year and 183 weighted days over three years (all days of the current year, 1/3 of the first preceding year, 1/6 of the second). Both countries work by calendar year; besides one year's days, Malaysia also counts a period of 182 or more consecutive days within the previous or the next year to which your days are linked and your earlier years.
Working in Malaysia while resident in the U.S.. Pay for work physically done in Malaysia is Malaysian-source income. As a non-resident of Malaysia you pay 30% on it without reliefs, unless the work there lasted no more than 60 days in the basis year (para 21 Sch. 6 ITA 1967). With no treaty there is no 183-day exemption: beyond 60 days Malaysia taxes the pay even if a U.S. employer pays it. The United States taxes the same pay as part of your worldwide income and credits the Malaysian tax.
Non-resident of Malaysia: full domestic withholding rates. As a non-resident you pay Malaysian tax only on Malaysian-source income, partly through withholding by the payer: interest 15%, royalties 10%, fees for technical and consultancy services performed in Malaysia 10%, other income under s. 4(f) 10%, public entertainers 15%. A sale of Malaysian real property by a foreigner without permanent resident status bears RPGT of 30% within 5 years of ownership and 10% from the 6th year. With no U.S.–Malaysia treaty these rates are not reduced; a U.S. citizen or resident can credit the Malaysian tax in the United States.
Residence under s. 7(1)(d) depends on the following year. You are a Malaysian resident under the rule that looks at the following year. If you do not become a Malaysian resident in the following year, your status for the selected year changes — check it once that year has ended. Your U.S. status is not affected: it follows only the U.S. rules.
No U.S.–Malaysia social security (totalization) agreement. Malaysia is not on SSA's list of U.S. social security agreements. U.S. Social Security and Medicare taxes (or self-employment tax) apply under U.S. law, no certificate of coverage can exempt you, and periods in the two countries are not added together.

How dual residence is resolved

There is no income tax treaty in force between the United States and this country.

Terms you will come across in Malaysia

Income Tax Act 1967 (ITA): Malaysia's income tax law; residence of individuals — s. 7
basis year: for an individual, the calendar year for which residence is determined
LHDN: Inland Revenue Board of Malaysia
Certificate of Residence (e-Residence): Malaysian certificate of tax residence, issued by LHDN online
RPGT (Real Property Gains Tax): tax on gains from selling real property in Malaysia
PR 11/2017: LHDN public ruling on the residence status of individuals

Questions

How does Malaysia count 182 days?

The threshold is 182 days or more in the calendar year (also in a leap year), not 183. Any part of a day in Malaysia counts as a full day, so arrival and departure days count. Besides one year's days, Malaysia also looks at a period of 182 or more consecutive days within the previous or the next year to which your days are linked and at your earlier years, so you can be resident with fewer than 182 days.

Is there a tax treaty between the U.S. and Malaysia?

No comprehensive one — only a limited agreement of 18 April 1989 exempting income from shipping and air transport. There is no tie-breaker for dual residents, no 183-day rule for short work trips and no reduced Malaysian withholding rates; double taxation is relieved only under each country's own rules — in the U.S. by the foreign tax credit (Form 1116) or the foreign earned income exclusion (Form 2555).

Does Malaysia tax my U.S. income?

Only if it is received in Malaysia. Foreign income received by a resident individual from 1 January 2022 to 31 December 2036 is exempt if it was taxed in the country of source (or not taxed there because of its tax system, a tax-free threshold or an incentive); income connected with a Malaysian partnership is excluded. The United States still taxes a U.S. citizen or resident on worldwide income.

Sources

Legislation and official guidance

s. 7(1) Income Tax Act 1967 (Act 53) — An individual is resident in Malaysia for a basis year (for individuals, the calendar year) if he or she: (a) is in Malaysia for 182 days or more in that year; (b) is there for fewer than 182 days, but that period is linked to another period of at least 182 consecutive days in Malaysia falling within the preceding or the following year (permitted temporary absences count towards both periods, and the 14-day allowance for social visits covers both together); (c) is there for 90 days or more in that year and, in each of any three of the four preceding years, was resident or was in Malaysia for 90 days or more; (d) is resident in the following year and was resident in each of the three preceding years.
Public Ruling LHDN No. 11/2017 «Residence Status of Individuals» (22.12.2017), paras 5–6 — Residence depends on physical presence, not on citizenship or a residence permit. Part of a day counts as a full day of presence (the days of arrival and departure count). LHDN's ruling gives examples for each of the criteria in s. 7(1)(a)–(d) and s. 7(1B).
s. 7(1)(b) ITA 1967 (temporary absences) — A continuous period is not broken by temporary absences, provided the person was in Malaysia immediately before and after them: (i) absences connected with service in Malaysia (official business, conferences, seminars, study abroad); (ii) absences owing to ill health of the person or of an immediate family member; (iii) social visits not exceeding 14 days in total.
s. 7(1B) ITA 1967; Public Ruling No. 11/2017, para 6.5 — A Malaysian citizen who works in the Malaysian public service or for a statutory authority is treated as resident for a year in which he or she was not in Malaysia because of service abroad in that post or study abroad fully paid by that employer. The rule does not cover employees of private companies or local staff hired abroad.
Income Tax (Exemption) (No. 5) Order 2022, P.U.(A) 234/2022, as amended by P.U.(A) 451/2024; LHDN Guidelines on income received from abroad (20 June 2024), paras 5.2.2.1–5.2.2.2 — Foreign income of a resident individual received (remitted in cash or electronically) in Malaysia from 1 January 2022 is exempt, except income connected with a partnership in Malaysia — provided the income was taxed in the country of source, or was not taxed there because of its tax system, a tax-free threshold or a tax incentive. P.U.(A) 451/2024 (in force from 1 January 2027) extended the exemption from 31 December 2026 to 31 December 2036.
s. 3 ITA 1967; LHDN «Who is taxable» — Tax is charged on income accruing in or derived from Malaysia and on income received in Malaysia from outside Malaysia. Residents pay at progressive rates and are entitled to personal reliefs (ss. 45A–49); non-residents pay a flat 30% without reliefs.
LHDN — limited double taxation agreements (Malaysia–United States: shipping and air transport, P.U.(A) 242/1989) — Malaysia's agreement with the United States, signed in Kuala Lumpur on 18 April 1989 (Order P.U.(A) 242/1989), is a limited agreement covering only income from shipping and air transport; the United States is not in LHDN's table of comprehensive double taxation agreements.
Income Tax (Double Taxation Relief) (United States of America) Order, P.U.(A) 242/1989 — Reciprocal exemption of income from the operation of ships and aircraft in international traffic; no definition of residence for individuals and no tie-breaker.
26 U.S.C. § 901(b)(1) — A U.S. citizen may credit income taxes paid or accrued to a foreign country (subject to the limitations of § 904).
26 U.S.C. § 911(a), (d)(1), (d)(6) — A qualified individual (tax home abroad and bona fide residence for an entire taxable year, or 330 full days abroad in 12 consecutive months) may elect to exclude foreign earned income and a housing amount; no foreign tax credit is allowed for taxes allocable to the excluded income.
§ 7701(b)(3)(A); Treas. Reg. § 301.7701(b)-1(c) — Substantial presence test: at least 31 days in the current year and at least 183 days counting all current-year days, 1/3 of the days in the first preceding year and 1/6 of the days in the second preceding year. Fractions are not rounded.
§ 7701(b)(3)(B)–(C); Treas. Reg. §§ 301.7701(b)-2, -8 — Closer connection exception: fewer than 183 days in the current year, a tax home in a foreign country for the whole year, a closer connection to that country, and a timely Form 8840; not available if you applied for a green card (e.g. Form I-485).
IRS Publication 519, U.S. Tax Guide for Aliens — Official IRS guide for aliens: residence tests, exempt individuals, closer connection exception, dual-status years, dual-resident taxpayers.
Treas. Reg. § 301.7701(b)-1(b) — A lawful permanent resident (green-card holder) is a U.S. resident for the calendar year regardless of the number of days spent in the United States.
para 21 Sch. 6 ITA 1967 (LHDN, «Tax treatment of residents and non-residents», 2025) — A non-resident's pay for work in Malaysia is exempt if the work in the basis year lasted no more than 60 days (with exceptions, e.g. for entertainers paid from public funds). Otherwise a non-resident pays 30% without reliefs or rebates.
ss. 107A, 109, 109A, 109B, 109F ITA 1967 (LHDN, withholding tax) — Withholding by the payer on payments to a non-resident: interest — 15%, royalties — 10% (s. 109); public entertainers — 15% (s. 109A); fees for services in connection with property, technical management or advice, rent of movable property — 10% (s. 109B, only for services performed in Malaysia); other income under s. 4(f) — 10% (s. 109F); contract payments for services — 10% + 3% (s. 107A). A double tax treaty may reduce the rates.
Real Property Gains Tax — Schedule 5 RPGTA, Parts I and III (LHDN) — Tax on gains from disposals of Malaysian real property: citizens and permanent residents — 30% (up to 3 years of ownership), 20% (4th year), 15% (5th year), 0% (from the 6th year); persons who are neither Malaysian citizens nor permanent residents — 30% (up to 5 years), 10% (from the 6th year).
SSA — U.S. international social security agreements (status)
Sch. 1 Part I ITA 1967 — rates for residents, YA 2023–2025 (LHDN) — Rates for residents: 0% up to RM 5,000; 1% — 5,001–20,000; 3% — 20,001–35,000; 6% — 35,001–50,000; 11% — 50,001–70,000; 19% — 70,001–100,000; 25% — 100,001–400,000; 26% — 400,001–600,000; 28% — 600,001–2,000,000; 30% — above RM 2,000,000. Non-residents — 30%.
Income Tax (Determination of Chargeable Income of an Individual in respect of Dividend) Rules 2025, P.U.(A) 148/2025 — From YA 2025, dividends of an individual (resident or non-resident) above RM 100,000 a year are taxable under Part XXII Sch. 1 ITA 1967; the Rules determine which part of chargeable income is attributable to dividends.

Updated 2026-11-10. The result is for information only and is not tax or legal advice. Tax authorities and courts may interpret the rules differently, including because of circumstances not covered here, and the law changes. Consult a qualified adviser before making decisions.

Check your status