Business Registration

Business Income

Form B needs to be furnished by an individual who is resident in Malaysia and carries on a business.

Form BE – income assessed under Section 4 (b) – 4 (f) of the Income Tax Act 1967 (ITA 1967) and be completed by individual residents who have income other than business.

Form B – income assessed under Section 4 (a) – 4 (f) of the ITA 1967 and be completed by individual residents who have business income (sole proprietorship) or partnership.

The due date for submission of Form B is 30 June of the following year.Form B – income assessed under Section 4 (a) – 4 (f) of the ITA 1967 and be completed by individual residents who have business income (sole proprietorship) or partnership.

Yes. You will be charged a penalty under subsection 112(3) of the ITA 1967. Inland Revenue Board of Malaysia (IRBM) will issue a notice of assessment under subsection 90(3) of the ITA 1967 and the taxpayer is required to pay additional taxes (and the original tax if still unpaid) within 30 days from the date the notice is issued.

Records, documents and working sheets need to be kept for 7 years as evidence and reference if required.

If you do not keep your business records, you may be charged in court under Section 119A of the ITA 1967. If convicted, the penalty imposed will be not less than RM300 and not more than RM10,000 or imprisonment for not less than 1 year or both.

Types of forms to be filled are not depending on whether you have registered the business with the Companies Commission of Malaysia (SSM) or not. It depends on the source of the income received by you whether or not a business source. Income received by an independent agent is treated as business income. Therefore, you must declare the income in Form B.

Commission income is treated as business income and you are required to complete Form B to report income.

Yes. You may make check at the branch handling your income tax file. Another easier option is to check the amount using the e-ledger at IRBM’s website. To use this service you need to enter your e-filing user id and password.

You can amend the figure by submitting the CP502 form before 30th June to your respective income tax branch

Public Ruling is a guide for the public which sets out the interpretation Public Rulings of the Director General of Inland Revenue in respect of a particular tax law, policy and procedure that are to be applied. Details of each Public Ruling are available from the IRBM website.

For each partnership, the precedent partner is responsible for filling out the Form P and issuing the Form CP30 to each and every partner. CP30 is a statement of apportionment of partnership income for each partner. The Form CP30 has to be provided to each partner so as to enable them to declare their partnership income in Form B.

The rental income can be taxed as business income under section 4 (a) of the ITA Act 1967 if the property owner is comprehensively and actively providing maintenance services or support services in relation to the rental property. These services are offered, managed and provided by the person renting the property instead of rising passively or accidentally as a result of ownership or lease of the property.

Maintenance services or support services comprehensively provided means services which include security, air conditioning, hot water, escalators, elevators, recreational facilities (clubhouse, gym, tennis / badminton / squash, swimming pools, etc.), cleaning or revisions, including waste disposal -garbage, property maintenance, gardens, landscaping, lighting, etc.

Medical expenses for spouse’s parent are not allowable.

An amount limited to a maximum of RM5,000 is deductible (self) in respect of fees expended on any course of study up to tertiary level in any institution in Malaysia recognized by the Malaysian Government or approved by the Minister for the purpose of acquiring any skills or qualifications.

Complete medical examination refers to thorough examination as defined by Malaysian Medical Council (MMC) including both physical and mental examination and laboratory test (blood and urine test) together with doctor consultation as follows:

  • Physical examination refers to examination for weight, blood pressure, eye, ears, nose and throat, examining your neck for the 23 size of the thyroid gland and enlarged lymph nodes, listening to your chest and heart, breast examination, abdominal examination, looking at your arms and legs and pelvic examination (pap smear).
  • Lab examination refers to blood test, urinalysis and Pap smear. Blood test checking on your cholesterol level, thyroid hormones, complete blood count
  • Consultation after examination.
    Amount expended on own self, husband/wife or child is deductible up to a maximum of RM500 and must be proved with official receipt.

Yes, you can. Both hardcopy and electronic books but exclude newspapers or banned reading materials can be claimed under book/magazine relief limited to a maximum of RM1,000 regardless of where the books were purchased. Please keep the receipts for 7 years for the purpose of reference and review if required by IRBM.

Sports equipment for any sports activity as defined under the Sports Development Act 1997. Sports equipment includes equipment with short lifespan e.g. golf balls and shuttlecocks but excluding sports attire, e.g. swimsuits and sports shoes. The deductible amount is limited to RM300. For fitness sports – all fitness equipment such as treadmill, exercise bike and air walker can be claimed. For recreational sports – for example diving. All diving equipment can be claimed except for attire.

Yes, you can. Please note that the EPF contribution for your own self cannot be deducted as expenses in order to calculate your business adjusted income/loss.

Insurance premium on the life of the child does not qualify. Only Insurance Premiums paid for policies taken on the life of an individual, husband or wives are allowable deductions.

Employment income

There are 2 methods of registering an income tax reference number:

  • You can register manually at the nearest IRBM branch by bringing along a copy of your identification document, remuneration statement and business registration for business cases.
  • You can register online through e-Daftar. Please visit http://edaftar.hasil.gov.my/

You may claim medical expenses for serious diseases expended on you, your spouse or child up and medical expenses for parents. Such a claim must be supported by original receipts issued by a medical practitioner.

There is no limit to the number of children, but relief will only be given for any dependent, unmarried child who at the time is:

  • below 18 years of age;
  • if above 18 years of age, is in receipt of full time education or is under articleship or indenture in trade or profession;

No, the MTD is strictly for person (s) under employment contract only. If you are in business or are self -employed, you can pay your income tax through the bi-monthly installment payment scheme.

Yes, a penalty will be imposed if there is a delay in the submission of the return form. All return forms must be submitted within a period that has been stipulated (e.g. 30 April is last day to submit employment income tax).

Yes, you may if you are a Muslim. You have to forward the original receipts, which are on your name, to substantiate your claim.

You may make a claim for deduction for the donation made but the donation must be made to a body or fund approved by the Director General. The approval (gazette notification) will be stated on the receipt.

Income tax payment can be made at:

  • IRBM payment counter (Jalan Tuanku Abdul Halim, Kuala Lumpur, Kota Kinabalu, Sabah, & Kuching, Sarawak)
  • Counter (CIMB Bank, Public Bank, Maybank, RHB, Bank, Affin Bank, Bank Rakyat & Pos Malaysia)
  • ByrHasil. Please visit https://byrhasil.hasil.gov.my
  • Internet banking (CIMB Bank, Public Bank, RHB Bank, Maybank, Hong Leong Bank & Pos Malaysia)

Monthly Tax Deduction (MTD or PCB) which was introduced on 1st January 1995, is a system of tax recovery where employers make deductions from their employees’ remuneration every month in accordance with the MTD Schedule. This is mandatory, in that neither the employer nor employee has any choice in the matter. Any deviation from the requirements of the Income Tax (Deduction from Remuneration) Rules 1994 can only be upon written authorization from IRBM.

MTD is an automatic deduction made every month, while CP 38 deduction arises only when IRBM issues a specific direction to the employer requiring him to make deductions of certain amounts for a specified number of months. Such CP 38 deductions are generally for settlement of outstanding taxes while MTD is on current income (Pay As You Earn – PAYE).

MTD (PCB) is due only on employment income, i.e., on remuneration that arises from a master servant relationship, and this includes all payment other than benefits-in-kind [Section 13(1)(b)], accommodation benefits [Section 13(1)(c)] and reimbursements. Employment income subject to MTD includes salary, wages, commission, overtime, allowances, director’ fees, tips and bonuses arising out of exercising the employment. The employer adds up such income, subtracts the employee’s EPF contribution (subject to a maximum of RM500 per month or RM 6000 per year), and deducts the MTD in accordance with the relevant category in the MTD Schedule that the employee comes under. However, where the payment is bonus or other lump sum payment, a special formula has to be adopted to determine the MTD.

In cases where the Director’s Fees is paid monthly together with other monthly remuneration, both the relevant amounts must be added together in order to determine the MTD.
For cases where only Director’s Fees is paid monthly, the MTD is determined in the usual manner. Where a director is paid a monthly remuneration and he receives Director’s Fees in a lump sum, the MTD is calculated by using the Bonus Formula.

In instances where the director receives only Director’s Fees and paid in a lump sum, the relevant amount is divided by the number of months for which the payment relates. MTD is determined accordingly and then multiplied by the number of months.

You will receive your refund within

  • 30 working days from the date of submission if the submission is done within the due date through e-filing.
  • 3 months from the date of submission if the submission is done manually, within the due date.

No. The refund will be processed within 30 working days for e-filers or within 90 working days for manual filers.

The delay in the refund process may be due to the need for auditing of the return form that was furnished. Nonetheless, you are advised to contact the IRBM branch which handles your income tax file or the Customer Service Centre for further information.

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