Kuala Lumpur

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Tax Services

Sections

1. Overview of Taxation in Malaysia

Malaysia has a progressive tax system, and the tax year runs from January 1 to December 31. The Inland Revenue Board of Malaysia (LHDN) is the primary authority responsible for tax collection and enforcement.

2. Personal Income Tax

a. Tax Rates

  • Residents: Tax rates range from 0% to 30% based on income brackets. For example:
    • 0% for income up to MYR 5,000
    • 1% for income from MYR 5,001 to MYR 20,000
    • 30% for income above MYR 2,000,000
  • Non-residents: A flat rate of 30% applies to all income.

b. Filing Procedures

  • Tax Identification Number (TIN): Obtain a TIN from LHDN if you are a new taxpayer.
  • Filing Method: You can file your taxes online via the e-Filing system or submit a paper form.
  • Documents Required: Income statements, tax relief claims, and supporting documents.

c. Deadlines

  • Filing Deadline:
    • For individuals (residents): April 30 of the following year.
    • For non-residents: May 15 of the following year.

d. Costs

  • Tax Preparation Services: Fees for tax consultants can range from MYR 200 to MYR 1,500, depending on the complexity of your tax situation.

3. Corporate Tax

a. Tax Rates

  • Standard Rate: 24% on chargeable income.
  • Small and Medium Enterprises (SMEs): A reduced rate of 17% on the first MYR 600,000 of chargeable income, with the remaining taxed at 24%.

b. Filing Procedures

  • Company Registration: Ensure your business is registered with the Companies Commission of Malaysia (SSM).
  • Tax Returns: File your corporate tax return (Form C) electronically through the e-Filing system.
  • Documents Required: Financial statements, tax computation, and supporting documents.

c. Deadlines

  • Filing Deadline:
    • Generally, within 7 months after the end of the financial year.

d. Costs

  • Tax Advisory Services: Fees can range from MYR 1,000 to MYR 5,000, depending on the size and complexity of the business.

4. Goods and Services Tax (GST) / Sales and Service Tax (SST)

a. Overview

  • GST: Previously implemented at a rate of 6%, but was abolished in 2018.
  • SST: Reintroduced in September 2018, consisting of:
    • Sales Tax: 5% or 10% on goods.
    • Service Tax: 6% on taxable services.

b. Registration

  • Businesses with annual sales exceeding MYR 500,000 must register for SST.

c. Filing Procedures

  • SST Returns: File returns quarterly through the Royal Malaysian Customs Department (RMCD) portal.
  • Documents Required: Sales records, purchase invoices, and tax computation.

d. Deadlines

  • Filing Deadline:
    • Returns are due on the last day of the month following the end of the taxable period.

e. Costs

  • SST Compliance Services: Fees for assistance can range from MYR 500 to MYR 2,000.

5. Local Considerations and Tips

  • Language: While English is widely spoken, especially in business contexts, having a basic understanding of Malay can be beneficial.
  • Cultural Sensitivity: Be aware of local customs and practices, especially during tax consultations.
  • Professional Help: Consider hiring a local tax consultant or accountant familiar with Malaysian tax laws to navigate complexities.
  • Stay Updated: Tax laws can change, so regularly check the LHDN and RMCD websites for updates.

6. Useful Resources

Conclusion

Navigating the tax system in Kuala Lumpur can be straightforward with the right information and resources. Whether you are an individual taxpayer or a business owner, understanding the various tax obligations and seeking professional assistance when needed can help ensure compliance and optimize your tax situation.