A Certificate of Residence serves the purpose of confirming the ‘resident’ status of the taxpayer for the taxation purposes. The country of Malaysia has Double Taxation Agreements (DTA) with some countries which are thus her treaty partners for this purpose. The Certificate of Residence ensures that the Malaysian tax residents can claim tax benefits under the DTA and need not pay double tax on the same income.

What is the Avoidance of Double Taxation Agreement (DTA)?

‘Avoidance of DTA’ is an agreement signed by Malaysia with another country which serves to remove the possibility of duplication of taxation on income earned in one country by a resident of the other country. A country that has signed a DTA with Malaysia is called a treaty country.

The DTA lays down the taxing structure between Malaysia and her treaty partner on different types of incomes generated through economic activities across the border between these two countries. It also specifies tax mitigation or exemption on specific types of income.

Only the tax residents of Malaysia who have one of the treaty countries as their country of origin can enjoy the benefits of a DTA. For enjoying the benefits of this tax exemption, a tax resident in Malaysia must obtain a COR. Malaysia has at present 69 effective DTA agreements.

If you are a Malaysia tax resident

If the tax resident of Malaysia earns foreign income in a treaty country, he would be subject to tax in that foreign country. However, he may wish to claim the DTA benefits that entitle a Malaysia tax resident to enjoy a reduced tax rate or a tax exemption in that foreign country.

To enjoy this benefit, he must submit the Certificate of Residency (COR) to the tax authorities in that country to prove that he is a Malaysia tax resident.

When is a person or an entity considered to be a Malaysian tax resident?

For companies or bodies of persons:-

  • A Hindu joint family is considered to be a tax resident in Malaysia for that particular assessment year in which its manager or karta is resident for that assessment year.
  • A company or a body of persons (not being a Hindu joint family) carrying on a business in Malaysia is considered to be a tax resident in Malaysia for that particular assessment year in which at any time during that assessment year the management and control of its business or of any one of its businesses, as the case may be, are exercised in Malaysia.
  • Any other company or body of persons (not being a Hindu joint family) is considered to be a tax resident in Malaysia for that particular assessment year in which at any time during that basis year the management and control of its affairs are exercised in Malaysia by its directors or other controlling authority.

For an individual

An individual is considered to be a tax resident in Malaysia for that particular assessment year if –

  • He is in Malaysia in that assessment year for a period/ periods cumulatively amounting equal to or more than one hundred and eighty-two days.
  • He is in Malaysia in that assessment year for a period of less than one hundred and eighty-two days and that time-period is clubbed with another time-period of one hundred and eighty-two or more consecutive days during which he was continuously in Malaysia.

QX Trust Company will help you through the process of obtaining a COR without hassles in a reasonably short period of time.

The procedure is described below in short.

How to apply for Certificate Of Residence?

One can apply for COR in 2 ways

  1. Manually;
  2. Using the e-Residence on-line form.

How to manually submit the application for COR?

The following categories of taxpayers must apply manually for COR:

  1. Individual taxpayers
  2. Partners (individual) of a partnership
  3. Taxpayers (individual or company) whose tax files are being handled by the Non Resident Branch.
  4. For individuals / companies who have Saudi Arabia, Indonesia, France, Singapore and Switzerland as their country of origin must submit their applications for COR in special forms which can be downloaded from the respective official websites.

Taxpayers (individual or company) whose tax files are being handled by Labuan Branch, the COR application should be send to the Labuan Branch at the following address:

Inland Revenue Board of Malaysia
Labuan Branch
Unit E.004 dan E.005
1st Floor, Aras Podium
Kompleks Ujana Kewangan
Jalan Merdeka
87000 W. P. Labuan

certifcate application

Companies and Trust Files

COR Application by companies and trust files other than the ones mentioned above, can be submitted manually or through e-Residence.

Application Form For COR

For all COR applications, the Form STM1 is to be completed. Where the application is for more than one certificate, the Form STM1A should also be completed.

Necessary Supporting Documents

For Companies
Following supporting documents must be submitted with COR application for the year of assessment for which the Return Form is not as yet due:

  • A copy of the Minutes of the BOD Meeting that was held during the year for which application is being submitted; or
  • A confirmation letter signed by a director, stating that the management and control of the company are exercised in Malaysia during the year for which application is being submitted;
  • A copy of Form 49 from Companies Commission of Malaysia (CCM)

For Individuals

  • Passport in original as well as photocopies;
  • A List of travels in/out of Malaysia during the year for which application is being submitted.

For Partnership Firms
The residence status of an individual, who is a partner of a partnership, is determined in accordance with Section 7, Income Tax Act, 1967. The residence status of a company, being a partner of a partnership, is determined in accordance with Section 8, Income Tax Act 1967. The supporting documents required are as stated in paragraphs (I) and (II) above.

For Trusts
A copy of the trust deed (for newly registered file)

We at QX Trust Company will help you at a very nominal fee through the process of obtaining a Certificate Of Residence application by completing all the necessary paper work.