LHDN travel restriction in Malaysia means the Inland Revenue Board of Malaysia (LHDN) can ask Immigration to stop a person from leaving the country when tax is unpaid. This guide is for SME owners and company directors, including foreign owners who are new to the Malaysian system. The short answer: a director can be stopped at the airport if the company owes tax, and the restriction can be lifted by paying or, for Malaysians, by an approved temporary release.
Many owners only find out at the immigration counter. This post explains who can be stopped, what unpaid amounts count, and the steps to check and lift a restriction, in plain words.
Key Takeaways
- The rule comes from section 104 of the Income Tax Act 1967. The Director General of Inland Revenue can issue a certificate to the police or Immigration.
- Individuals who owe tax can be stopped. Company directors can also be stopped when the company owes tax or debts.
- Foreign nationals can be stopped too, and the temporary release route is not open to them.
- Full payment lifts the restriction. Malaysians who cannot pay in full may ask for a temporary release, which needs at least 50% of the amount.
- Leaving or trying to leave without paying can lead to a fine of RM200 to RM20,000, up to 6 months in jail, or both.
What Is the LHDN Travel Restriction?
LHDN is the short name for Lembaga Hasil Dalam Negeri. Under section 104, the Director General can issue a certificate when he believes a taxpayer will leave Malaysia without paying. The certificate goes to the Police Commissioner or the Director of Immigration, who must stop the person from leaving. The certificate takes effect on the day it is issued. It is delivered in person or by registered post.
LHDN does not need to prove that the person plans to leave Malaysia for good. Since 1 January 2021, the certificate can be sent to Immigration electronically, so the restriction can show up quickly.
The details are in LHDN Public Ruling No. 4/2022, issued on 20 October 2022, which replaced Public Ruling No. 12/2015. A public ruling is LHDN guidance, not a law.
Who Can Be Stopped from Leaving Malaysia
| Person | When a restriction may apply | Note |
|---|---|---|
| Individual taxpayer | The person owes tax or debts to LHDN | Applies to Malaysians and foreigners |
| Company director | The company owes tax or debts | A director can be stopped even if his or her own personal tax is paid |
| Foreign national | Same as above | Must settle the amount in full to be released; no temporary release route |
In the ruling, a director means anyone who holds a director post or is involved in managing the company. It also covers a person who, alone or with associates, holds or controls at least 20% of the ordinary shares.
What Unpaid Amounts Count
The certificate can cover tax that is due, and also tax that is not yet due. It can also cover late payment penalties and larger penalties, for example when the tax estimate was too low by more than 30%. Withholding tax on payments to non-residents is covered as well.
This is why simple habits matter. Read our guides on CP204 tax estimates, deadlines and penalties, Form C filing and withholding tax on non-residents.
LHDN Travel Restriction in Malaysia: How to Check and Lift It
| Step | What to do |
|---|---|
| Check your status | Use MyTax or the Immigration travel restriction check linked on the LHDN page. Do this well before you book a trip. |
| Pay in full | Pay the full amount on the certificate and keep the receipts. Bring them to the LHDN branch that handles your tax file. For a cheque, release follows after the bank clears it, and LHDN then issues a cancellation letter. |
| Ask for temporary release (Malaysians only) | Pay at least 50% of the amount in cash or bank draft, and agree to instalments for the balance. Missing the instalment plan means no more temporary releases. |
| Apply early | State your destination, purpose and travel period. LHDN says to hand in the receipts and documents 5 days before you travel. |
Payment methods and codes are on the LHDN website. The ruling does not describe an appeal route or a guarantee process in detail, so speak to your LHDN branch if you need those.
Worked example (our own numbers, for learning only): a company owes RM60,000 and its Malaysian director wants a temporary release. The 50% payment is RM60,000 x 50% = RM30,000. The balance is RM30,000. If LHDN agrees to 3 equal instalments, each is RM10,000, and RM30,000 + (3 x RM10,000) = RM60,000.
Checklist for Directors and Business Owners
- Check your LHDN tax status and your company status before every overseas trip.
- File and pay on time, including the monthly CP204 instalments.
- Keep your registered address with LHDN up to date, because the certificate can be sent by registered post.
- Keep proof of every payment, such as ByrHASiL receipts.
- Contact your LHDN branch early if you cannot pay in full, and do not wait until the airport.
Conclusion
A travel restriction is a serious but fixable problem. The best fix is to avoid arrears with timely filing and payment, and to act fast if a restriction already exists. For more on the penalty side, see our CP204 guide.
How Conzlab can help: Our compliance consultancy team can help you review your LHDN filing and payment deadlines so tax arrears do not build up. Contact Conzlab if you would like a compliance check explained in plain words.
Official Sources
- LHDN: Sekatan Perjalanan (travel restriction) page
- LHDN Public Ruling No. 4/2022: Collecting tax from persons leaving Malaysia
- LHDN MyTax portal
Last updated: 12 November 2026. This article is general information, not tax or legal advice. Rules can change, so check with the agency before you act.
Frequently Asked Questions
Yes, it can. Under the ruling, a company director may be stopped when the company owes tax or debts.
The temporary release route in the ruling does not cover foreign nationals. A foreign national needs to settle the full amount, so contact your LHDN branch early.
The LHDN page says to submit receipts and documents 5 days before the travel date. Earlier is safer.
The LHDN travel restriction page points to MyTax and the Immigration check. Use the links on that official page.
LHDN Travel Restriction Malaysia: Directors and Unpaid Tax