• What types of income – Sec 4 of ITA 1967
•
o Sales/turnover of manufacturer or trader
o Compensation for loss of income
o Interest received from trade debtors
o Insurance recovery from circulating assets, such as stocks, cash & etc.
o Donation/Gift of Trading Stocks
o Dividend income of a share dealing business.
o Interest income of an investment dealing or money lending business.
• Incomes from where – M’sia vs Foreign source income
• When – basis period
•
how the ledgers and stuff are recorded
•
the period used for tax submission purposes.
The first basis period YA = accounting period
•
when your business is ready to operate, not related to accounting or basis
period
• Any revenue expense incurred before the commencement date is not
deductible
o Exceptions:
▪ Incorporation expenses for companies with paid up capital not
exceeding RM 2.5 million
▪ Training expenses for employees, provided the expenses were
incurred within a year before the commencement date
▪ Recruitment cost such as expenses on job fairs, employment
agencies etc, provided the expenses were incurred within a year
before the commencement date
• Capital allowance would be available only starting on the basis period
where the commencement date falls
• It results in the determination of the first YA
= the year with no 12 month account
, o
Accounting period = Basis period for the YA in the failure year
o
New accounting period is apportioned equally to 2 YAs of the failure
year and subsequent year
•
o
Accounting period = Basis period for the YA in the failure year
New accounting period will be added with the following accounting
period to be the basis period for the YA of the failure year
•
Accounting period = Basis period for the YA in the failure year
•
Accounting period will be apportioned to form the basis period for the YA
in the failure and subsequent year
o A company is resident in Malaysia for the basis year for a YA if at any
time (at least once) during that basis year, the management and control
(directors’ meeting place where decisions are made to control/direct the
company) of any one of its businesses are exercised in Malaysia.
, Resident Non-resident
Tax rate (1) Paid Up Capital ≤ 2.5mil Chargeable income taxed at
+ Gross Income from Business 24%
Source ≤ 50mil
= 1st 600k chargeable income @ 17%
= Balance of chargeable income @ 24%
(2) Others = chargeable income @ 24%
Scope of Income accrued/derived in Malaysia, Income accrued/derived in
charge except the 4 specialised business is taxed Malaysia
for everything
Incentives Available under ITA 1967 & Promotion No
of Investments Act 1986
Withholding Not applicable 10-15% tax on Malaysian
tax deemed derived gross income
• Business includes profession, vocation, manufacturing, trade and adventure
or concern in the nature of trade
•
(will be charged with tax & treated as revenue income if:)
• Existence of organization; or
• Activities which lead to the maturing of the asset to be sold; or
• Existence of special skill, opportunities in connection with the article; or
• Nature of assets itself lend to commercial transactions; or
• Receipt in relation to loss of income (NOT loss of source of income)
o Depreciation of NCA
o General provision for doubtful debts
o Initial expenses (but with exceptions above)
▪ No restriction - Commercial Vehicle
▪ Restriction – Passenger Vehicle (dual purposes)
• Conditions:
o New car
o Cost of the car ≤ 150k
• Fulfil both - max deduct 100k ; fulfil one - max deduct 50k
•
o Sales/turnover of manufacturer or trader
o Compensation for loss of income
o Interest received from trade debtors
o Insurance recovery from circulating assets, such as stocks, cash & etc.
o Donation/Gift of Trading Stocks
o Dividend income of a share dealing business.
o Interest income of an investment dealing or money lending business.
• Incomes from where – M’sia vs Foreign source income
• When – basis period
•
how the ledgers and stuff are recorded
•
the period used for tax submission purposes.
The first basis period YA = accounting period
•
when your business is ready to operate, not related to accounting or basis
period
• Any revenue expense incurred before the commencement date is not
deductible
o Exceptions:
▪ Incorporation expenses for companies with paid up capital not
exceeding RM 2.5 million
▪ Training expenses for employees, provided the expenses were
incurred within a year before the commencement date
▪ Recruitment cost such as expenses on job fairs, employment
agencies etc, provided the expenses were incurred within a year
before the commencement date
• Capital allowance would be available only starting on the basis period
where the commencement date falls
• It results in the determination of the first YA
= the year with no 12 month account
, o
Accounting period = Basis period for the YA in the failure year
o
New accounting period is apportioned equally to 2 YAs of the failure
year and subsequent year
•
o
Accounting period = Basis period for the YA in the failure year
New accounting period will be added with the following accounting
period to be the basis period for the YA of the failure year
•
Accounting period = Basis period for the YA in the failure year
•
Accounting period will be apportioned to form the basis period for the YA
in the failure and subsequent year
o A company is resident in Malaysia for the basis year for a YA if at any
time (at least once) during that basis year, the management and control
(directors’ meeting place where decisions are made to control/direct the
company) of any one of its businesses are exercised in Malaysia.
, Resident Non-resident
Tax rate (1) Paid Up Capital ≤ 2.5mil Chargeable income taxed at
+ Gross Income from Business 24%
Source ≤ 50mil
= 1st 600k chargeable income @ 17%
= Balance of chargeable income @ 24%
(2) Others = chargeable income @ 24%
Scope of Income accrued/derived in Malaysia, Income accrued/derived in
charge except the 4 specialised business is taxed Malaysia
for everything
Incentives Available under ITA 1967 & Promotion No
of Investments Act 1986
Withholding Not applicable 10-15% tax on Malaysian
tax deemed derived gross income
• Business includes profession, vocation, manufacturing, trade and adventure
or concern in the nature of trade
•
(will be charged with tax & treated as revenue income if:)
• Existence of organization; or
• Activities which lead to the maturing of the asset to be sold; or
• Existence of special skill, opportunities in connection with the article; or
• Nature of assets itself lend to commercial transactions; or
• Receipt in relation to loss of income (NOT loss of source of income)
o Depreciation of NCA
o General provision for doubtful debts
o Initial expenses (but with exceptions above)
▪ No restriction - Commercial Vehicle
▪ Restriction – Passenger Vehicle (dual purposes)
• Conditions:
o New car
o Cost of the car ≤ 150k
• Fulfil both - max deduct 100k ; fulfil one - max deduct 50k
