Withholding Tax on Early Withdrawal from Deferred Annuity / Private Retirement Scheme (Section 109G ACP)

Contents

1. Introduction
2. Types of payments subject to withholding
3. Statutory provision
4. Rate and form
5. Final tax
6. Exemptions
7. Frequently Asked Questions (FAQ)
8. Official sources

Introduction

Early withdrawals before age 55 from a deferred annuity or private retirement scheme (PRS) are subject to withholding tax at the rate of 8%. This article explains the provision, rate, form and exemptions based on HASiL's official page.

Types of payments subject to withholding

According to the HASiL Withholding Tax page:

Statutory provision

Provision: Section 109G, Part XVI, Schedule 1 ACP.

Rate and form

Rate: 8%. Payment form: CP 37G.

Final tax

Exemptions

Withdrawals are NOT subject to withholding tax when before age 55 for the following reasons:

1. permanent total disablement;
2. serious illness;
3. mental infirmity;
4. death;
5. leaving Malaysia permanently;
6. healthcare.

Frequently Asked Questions (FAQ)

Q: What is the withholding tax rate on early PRS withdrawal before age 55? A: 8%, under section 109G ACP; form CP 37G.

Q: Is this withholding tax final? A: Yes — "This withholding tax is deemed to be final tax."

Q: Which withdrawal reasons are exempt? A: Permanent total disablement; serious illness; mental infirmity; death; leaving Malaysia permanently; healthcare (subject to Securities Commission guidelines).