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Public Ruling (PR) No. 1/2023 – Taxation of income from employment on board a ship
The Inland Revenue Board of Malaysia (HASiL) has published PR No. 1/2023: Taxation of income from employment on board a ship, dated 3 October 2023. This new 16-page PR replaces PR No. 12/2016, which was issued on 9 December 2016 (see Tax Alert No. 27/2016). The new PR comprises the following paragraphs:
1.0 Objective
2.0 Relevant provisions of the law
3.0 Interpretation
4.0 Introduction
5.0 Derivation of income
6.0 Tax treatment
7.0 Double taxation agreement
8.0 Documents required for verification
9.0 Responsibility of employer and seafarer
10.0 Updates and amendments
11.0 Disclaimer
Appendix I - Deeming provisions of employment income
Appendix II - Determining exemption of income of a seafarer
The content of this new PR is broadly similar to the earlier PR which explains the tax treatment of income of an individual derived from an employment exercised on board a ship. The new PR provides a more comprehensive definition of a “seagoing ship”, which is in line with the Merchant Shipping Ordinance 1952. Two new examples are also provided to illustrate the difference between a vessel which is a seagoing ship and one which is not.
The new PR also has updated examples discussing specific legislative provisions which set out the tax treatment of the employment income of a seafarer.