Category: Taxation

Business Loss Current year adjusted business losses can be used to set off against other income from the aggregate income for that year of assessment in ascertaining its total income. The other types of income such as other businesses, rental income, interest income, employment income, etc. After offsetting the current year losses against the other… Continue reading How to utilize business losses to save tax?

Employer’s Statutory Requirement  Being an employer is not an easy job. On top of the daily ins and outs of running a business, employers also have a whole list of statutory requirements to fulfil. The Income Tax Act (ITA) 1967 places an obligation on employers to fill out a list of forms, and failure to… Continue reading IRBM forms that you may have MISSED OUT!

Personal Tax Clearance Letter  On top of reporting obligations under the Income Tax Act 1967, employers are also responsible for informing the Malaysian Inland Revenue Board (IRB) of an employee’s cessation of employment, retirement, death, or departure from Malaysia for a period exceeding 3 months so that the tax clearance letter (TCL) can be issued. The TCL notifies the employer… Continue reading What should an employer do after an employee leaves?

Loss of Employment? Do you know you can get Tax Treatment?  While the recession hasn’t “officially” arrived, Malaysians are still feeling the heat with the rate of retrenchments and budget cuts due to the falling ringgit. If you are unfortunate enough to be laid off and receive the compensation, will this income be taxed? In this… Continue reading Loss of Employment? Is the compensation taxable?

What If Tax Estimation Was Not Done Properly?  What are the possible consequences if tax estimation is not done properly? A taxpayer who fails to submit Form CP204 will be liable to pay a fine of not less than RM200 and not more than RM2,000 or to imprisonment for a term no than 6 months,… Continue reading Tax Estimation was NOT done properly?

Withholding Tax on Foreign Service Provider in Malaysia As business owners, we want the best for our businesses. Therefore, sometimes we may enlist the services of foreign providers who are known to be the cream of the crop in their respective industries. When we make payments to these non-resident service providers, something called “withholding tax”… Continue reading Who should pay Withholding Tax?

Consequences of Not Remitting Withholding Tax   When the withholding tax (WHT) is not appropriately deducted and remitted to the Malaysian Inland Revenue Board (HASiL), serious consequences will follow. What Constitutes Non-Compliance? The payer fails to pay WHT at the prescribed rate (whether deducted or not). The payer pays WHT late (not within the period… Continue reading What if I fail to pay Withholding Tax?

Interest Restriction As defined in Public Ruling No. 2/2011, “interest” is the return or compensation for the use or retention by a person of a sum of money belonging to or owed to another.  How does interest restriction work?  If you have taken a loan, you would have interest expenses incurred on the loan obtained. Pursuant to… Continue reading NOT all interest expenses are tax deductible!

Key-Man Insurance You may have heard of the saying “a company is only as good as its people”. At the end of the day, a business is run by people. Without the pivotal man or woman playing their respective roles in a company, the organisation may face the danger of crumbling apart.   That is… Continue reading Is key-man insurance tax deductible?

Income Received From Letting of Real Property Public Ruling No. 12/2018 (PR 12/2018) was issued to clarify the tax treatment on rental income received from the letting of real property. The key difference in tax treatment depends on whether the letting of real property can be deemed as a business source or not.   When… Continue reading Is rental considered a business source of income?