Malaysia - ISKL

[Speculative Bubble]

I hope it's OK to copy a few lines here from the ISR:

"First off, what they don't tell you in the job interview is that you are stuck at this school for 3 years minimum. There is a very confusing tax clause that is not explained clearly where if you try and leave after 2 years, you must stay in the country for 2x6 month periods where you cannot leave Malaysia. If you do, you pay a tax penalty of $5000 USD. Also, it is a VERY expensive school to setup at. You are expected to pay 2.5 months housing deposit up front along with many other additional deposits that you may or may not see again. You need a car to survive here and they are very expensive as well. There is very little public transport to and from school."

Can anyone comment on this? Is there really a law that states that you cannot leave the country unless you pay that 5,000USD penalty? If this were true it would be true for all schools in Malaysia and not only ISKL.

Anyone has any info on this?

[durianfan]

Wondering the same. I read that on the ISR a few months back and checked Malaysia off the list of places that I might work.

[Lopaka]

It is a Malaysian Tax. In order to qualify as a tax resident in Malaysia, you must be physically present in the country for 182 days within the tax year (Jan. 1 to Dec. 31). The problem comes in your first and last years. If you arrive after July 2 of your first year then it won't be possible to make the 182 day requirement. The same when you leave at the end of your contract for another post if you want to leave the country prior to July 2. There are ways to get around this....arrive prior to July 2 and keep your travel the first 6 months in Malaysia, so many things to see. You can also "link" between the your first and second calendar years which allows you to make the required time commitment and allows you the ability leave that first year on authorized school trips, bereavement/health issues and holidays not exceeding 14 days. Once you have qualified as a tax resident than can come and go as you please without the threat of increased taxes.

I have a number of friends working at ISKL and they absolutely love it. The tax law is a pain but once you qualify Malaysia and KL are great places to live and work....great food, wonderful travel opportunities, cultural diversity.

[sevarem]

It sounds like a pain, but not a terrible one, not if you get to work at ISKL. I met a woman who had worked at ISKL at one of our PD workshops. She was there for ten years with her children. The only reason she left was for some family issues she had to take care of back home, but she said she would go back in a heartbeat.

ISKL is one of the those schools I would love to eventually work at.

[PsyGuy]

Its exactly as Lopaka describes, you can always do a combination of arriving earlier or leaving later in your first or last year to make the 182 day tax requirement. For long time teachers they usually have PR by the time they decide to leave.

The poster in the review most likely had to leave quickly and didnt have the opportunity to really plan a graceful exit from the country.

[KellyGuy]

That sounds ridiculously onerous. My current school winds up around the 20th of June, getting to Malaysia by July 2nd would be possible, of course, but leaves very little room for vacation, since apparently I would need to get to Malaysia and stay put. There are plenty of other good places to teach in the world, I see no need to deal with such ludicrous restrictions.

That's quite enough to just strike Malaysia off my list of places to teach.

[PsyGuy]

I understand your concerns, it would still give you about 2 weeks before July 2nd. You could also take a bus down to Singapore for some vacay time without lapsing your start day of your stay. ISK is also the type of school you cold easily retire out of, making the leaving part a moot point.

[rumour5182]

Just wanted to add a bit of extra context to Lopaka's information, which is completely correct. I'm in my first year in Malaysia and couldn't arrive before July 2, so I'm not in the country for 182 days this year. That means that, for 2012, I'm paying extra taxes (26 percent, because I'm taxed as a visitor). However, by being in the country on December 31 and January 1, I'm linking this year's income to next year's income. So, for my next paycheck my taxation level will revert to the resident percentage (don't remember what that is), and in July I will receive a refund of all the additional tax I paid in 2012 (which will make a nice starter fund for our Christmas vacation in Australia).

Additionally, because I'm not in "tax jail" this year (as many of my colleagues have been), I have left the country several times, including Singapore, Bali, Vietnam and Cambodia. In 2013, while I'm earning my resident rate, I'll be able to leave the country for Spring Break (staying within my 14 days), and although I won't be able to leave again until July 2 so that I complete my residency requirements, we'll be spending the week between then and the end of the school year in Langkawi, a beach destination within Malaysia.

I actually think it's preferable to do it this way and pay the extra taxes at first (which will be 100 percent refunded) because I'm not losing two breaks worth of travel time.

Good luck with your decision!

[gus]

Also know people who, after being hired, have gone there for spring break to find a house, look around, etc. this counts in their 182 days and buys them an extra week or two in summer. ISKLs induction package is very clear on your options and recommends different ways of getting your time in.