The answer is their income would be subject to withholding tax (WHT) pursuant to
section (s.) 109A of the Income Tax Act (ITA) 1967. In Malaysia, public entertainers who are non-residents are subject to WHT on their income earned from performances in the country.
Remuneration or other
income in respect of services performed or rendered in Malaysia by a non-resident public entertainer is subject to withholding tax at 15 % on the gross income (ITA 1967 Schedule 1, Part II, Item 3). The sponsor of the non-resident public entertainer is required to pay a withholding tax of 15 % before an entry permit for the non-resident public entertainer can be obtained from the Immigration Department.
Who is considered a public entertainer?
“Public entertainer” was defined in s.2(1) of the ITA 1967, followed by Public Ruling No. 6/2017 that further clarifies and gives examples of who falls under this category.
A non-resident public entertainer means a non-resident individual, who carries out the following activities:
- a solo or group performance as an actor, model, circus performer, compere, dancer, entertainer, musician, singer, other artiste, or
the exercise of any profession, vocation or employment of a similar nature for cultural, educational, entertainment, religious or any other purposes;
- the use of the non-resident individual’s intellectual, artistic, musical, personal or physical skill or character for cultural, educational, entertainment, religious or any other purposes;
- lecture, speech, or talk for any purpose; or
- a sporting event or sporting competition of any nature. Tax Deduction on Premium Paid for Key-Man Insurance
Residence status of an individual
The WHT will only apply if the public entertainer is a non-resident of Malaysia. The residence status is pertaining to the individual’s physical
presence and not their nationality or citizenship. Generally, a public entertainer will be treated as a non-resident if he is in Malaysia for less than 182 days in a calendar year.
Deduction and
remittance of WHT
The payer is liable to deduct at the rate applicable on the payment to the non-resident public entertainer; and shall remit (whether or not that tax is deducted) the amount of
that tax to IRBM within 1 month after paying or crediting the payment.
“Date of crediting” refers to
- the date the amount is paid; or
- the date the amount is credited in the bank account of the recipient; or
- the date of a contra entry
Gross income of a non-resident public entertainer subject to WHT
It is possible for both the monetary and non-monetary income of the non-resident public entertainer to be subject to WHT.
Monetary income can include fees, allowances (per-diem), appearance fees, the share of the gate receipts, and fees from image rights.
Non-monetary income, on the other hand, includes benefits enjoyed such as accommodation, meals, airfare, laundry, transportation, tax, etc. borne by a sponsor.
Would you like to know about the five tax exemptions that are applicable to public entertainers?
