Not all expatriates in Malaysia are required to file personal income tax. Foreigners working in Malaysia for less than 60 days are exempt from filling out taxes, as are those who have employed on board a Malaysian ship, or those aged over 55 years old who are receiving a pension from employment in Malaysia.
Expatriates working in Malaysia for more than 60 days but less than 182 days in a year are considered non-tax residents.
Only income that has its source in Malaysia is taxable in the country, regardless of where you are paid. However, there are some exceptions to this territorial principle. Malaysia has signed numerous Double Taxation Avoidance agreements, so certain nationalities will be exempt from paying personal income tax in Malaysia if their earned income is taxed in their home country. If your income is derived from specific industries, such as air transport or banking, a worldwide basis for taxation is applied instead of the territorial principle.