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Tax

Personal Income Tax

How do I know what form I should submit?

1. Employment income is the income earned by an individual from an employer, such as wages, salaries, bonuses, and other benefits.

2. Business income, on the other hand, is the income earned by a business from its operations, such as sales, services, and investments.

Employment income

Employment income is the income earned by an individual from an employer, such as wages, salaries, bonuses, and other benefits. In Malaysia, employment income is regarded as derived from Malaysia and subject to Malaysian tax where the employee exercises employment in Malaysia, is on paid leave which is attributable to the exercise of employment in Malaysia, performs duties outside Malaysia which are incidental to the exercise of an employment in Malaysia, is a director of a company resident in Malaysia, or is employed to work on board an aircraft or ship operated by a person who is resident in Malaysia.

What form should an Employment income person file in personal income tax?

Form BE

When do I need to file a Form BE?

Individual with single status who receive employment income in more than RM34,001 per year (after EPF deduction)

Married individuals and unemployed spouses who receive employment income in excess of RM46,001 per year
But it is recommended that any income must be reported

When is the due date for submission of Form BE?

Manual filing: 30 April of each year

E-Filing: 15 May of each year

Will a penalty be imposed for late Form BE submission after the deadline?

If you submit your Form BE late, you will be penalized.
LHDN will then send you an assessment notice, you must pay within 30 days after the date of notification any additional taxes, including those who did not pay the original amount.

How do I register an Income Tax Number?

Income tax number registration can be done by :

1. Online via e-Daftar at https://edaftar.hasil.gov.my; or
2. Manually at the nearest Inland Revenue Board of Malaysia (IRBM) office.

My employer has made a monthly tax deduction (PCB/MTD). Do I still need to submit ITRF?

Yes, you need to submit your annual income via e-Filing or manually if you are not subject to the MTD as the Final Tax.

If PCB is paid, do you not need to submit the Form BE?

In the absence of other income, the total amount paid by the PCB can be regarded as the final tax.

I am in Malaysia but my income comes from Singapore. Do I need to file a tax return in Malaysia?

If your only income comes from Singapore and is already taxed in Singapore, it will not be taxed in Malaysia as of now.

***Foreign Income tax exemption will be delayed from 1/1/2022 to 31/12/2026

What do I need to prepare before filing a Form BE?

If it is only part-time income, just prepare and fill in the amount of income according to the company's Form EA & tax deduction expense slip.

Business income

Business income is the income earned by a business (Sole Proprietorship, Partnership) from its operations, such as sales, services, and investments.

In Malaysia, corporations are subject to corporate income tax, which is calculated based on the net profit of the business and the tax rates applicable to that type of business.

What form should a business income person file in personal income tax?

Form B

When is the due date for submission of Form B?

Manual filing: 30 June of each year
E-Filing: 15 July of each year

Will a penalty be imposed for late Form B submission after the deadline?

If you submit your Form B late, you will be penalized.
LHDN will then send you an assessment notice, you must pay within 30 days after the date of notification any additional taxes, including those who did not pay the original amount.

Did I need to keep source documents?

The original documents must be kept for at least 7 years as evidence and reference required by LHDN.

Is there a penalty if I do not keep records?

If you fail to maintain proper business records, you may face penalties ranging from RM300 to RM10,000 or even imprisonment.

I work as a property agent/insurance/direct sales business, but I haven't registered with the Companies Commission of Malaysia (SSM). Which form should I use to report my income?

It depends on your income source, If you're an independent agent, the income is considered business income, and you should declare it using Form B.

If someone gets consulting fees or commission income from a company, is it considered business income or non-business income?

Commission income is seen as business income, and you need to fill out Form B to report this income.

What is CP500?

CP500 is a tax installment scheme designed by the Inland Revenue Board Malaysia (LHDN) for taxpayers to report their other forms of income like rental income, royalties, or other business earnings. It is also known as a “Prepayment of Income Tax by Instalment” or “Notis Bayaran Ansuran”.

The CP500 notice is usually sent to taxpayers in February and the deadline for payment is usually in May.

How can I check the payment CP500 status?

You can verify this through the e-ledger on the IRBM's website.
To access this service, you'll need to enter your e-filing user ID and password

What can I do if I disagree with my CP500 figure?

You can rectify the figure by submitting the CP502 form to your specific income tax before June 30th.

I am running a partnership business. How can I report the income I get from the partnership business?

For each partnership, the partner is responsible for filling out the Form P and issuing Form CP30 to every partner.

CP30 is a statement of apportionment of partnership income for each partner. The Form CP30 has to be provided to each partner to enable them to declare their partnership income in Form B.

Under what conditions can rental income be treated as business income?

The rental income may be subject to business taxation if the property owner actively and comprehensively provides maintenance or support services for the rental property.

These services should be actively managed and directly provided by the property owner, rather than being passively or incidentally derived from property ownership or leasing.

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