If you are online digital marketer, online business owner etc, you might hear about withholding tax.

What is WHT?
Withholding tax has been a term we, advertisers have been listening over and over for the past few years. What exactly is Withholding Tax and why are we required to pay it?

Withholding tax officially started in January 2017 by the LHDN Malaysia. If you are paying any non-local invoices or vendors, an x% of the invoiced amount need to be withheld and paid to LHDN Malaysia while the remaining balance is then paid to your foreign vendor.

How does it affect us?
As long you are using the digital platforms to advertise on behalf of the business. You will be required to withhold tax on the payments for the services rendered under the agreement for the use of any movable property and paid to the non-resident payee.

How does it affect us?
As long you are using the digital platforms to advertise on behalf of the business. You will be required to withhold tax on the payments for the services rendered under the agreement for the use of any movable property and paid to the non-resident payee.

Is it possible to avoid WHT?
It can’t be avoided. It is the latest finance policy implemented by the officials in Malaysia. All businesses in Malaysia that advertise on digital channels like Facebook, Twitter, Google, LinkedIn etc will all have to bear the WHT on the advertising expenditure.

“In conclusion, withholding tax is inevitable finance policy that had been implemented in Malaysia since 2017. We suggest to not take the risk and pay the tax accordingly to IRB Malaysia. In hopes of a better future, we do hope the government will find a way to charge the WHT on the advertising platform like Facebook or Google instead of increasing the burden of our local businesses.”