Personal Income Tax

Personal Income Tax Services in Kuala Lumpur, Malaysia

Package fee for personal income tax preparation fees:

  • Personal Income Tax Submission of Form BE/B/M/MT:
    • Active business operation: RM 1,800 (subjected to 6% service tax)
    • Rental income: RM 1,250 (subjected to 6% service tax)
    • Salary income: RM 600 (subjected to 6% service tax)
  • Partnership Form P Submission: RM 600 (subjected to 6% service tax)

Malaysia income tax liability of an individual can be determined more quickly, to do so, at first you need to determine the tax residency and amount of the income that is chargeable, after then you must apply for the progressive tax rate. The personal income tax planning for an individual includes points:

Personal Income tax filing Malaysia
  • With the effective year of assessment 2020, personal income tax payable on the taxable income of residents at the rate of 0% to 30%, further, nonresident’s tax depends upon the certain types of income they are holding. While another tax rate is fixed at 30% respectively.
  • The rules belonging to your tax differs from one to one regarding the tax residency of an individual.
  • Only Malaysia source income is subjected to tax whether you are a resident or nonresident.
  • The payable tax assessed on the current year, the tax year is probably known as the year of assessment (YA). The year ranges from 1st January to 31st December.

Once you are ready with the points mentioned in the planning of income tax, now let’s move further to the points related to the filing of the personal tax.

  • The employer will deliver the employee the Form EA, employer must make sure that the delivery must not be done later than the last date of February of the following year
  • The person who is not carrying any kind of business i.e. person refers to as an employee should be done with his/her filing of Form BE, BT, M, and MT before 30th April of the following year.
  • The person who is carrying a business i.e. person refers to as a sole proprietor should be done with his/her filling of Form B before 30th June of the following year.
  • The deadline for filing Form P by a partnership excluding limited liability partnerships is by 30th June of the following year.

Employer’s Responsibilities 

  • Form CP 22: Employer must notify IRB via this form about the commencement of employment of employees within one month of employment.
  • Form CP 22A: Employer must notify IRB via this form about the cessation of employment of an employee at least 30 days before the date of cessation until the employee is subjected to Monthly Tax Deduction (MTD). An overall deduction is made by the employer whose income is below the minimum amount subjected to MTD.
  • Form CP21: Employer must notify IRB via this form about the departure of an employee for more than three months.
  • Form E: Employer must furnish employee’s employment income via this form by 31st March of the following year.
  • Form EA: This form is not required to be sent to IRB. Statement of Remuneration completed and provided t employee before the last day of February for employee’s personal tax return purpose.

Employer’s responsibilities under MTD:

MTD system covers withholding tax from employment income. Employer’s responsibilities under MTD are as follow:

  • You can deduct the MTD or remuneration of employees each month or relevant in accordance with the schedule of MTD and pay to the Director General.
  •  Employees must pay to the Director General within fifteen days of every month.
  • Furnish with accurate and complete employee information in return when submitting the MTD payments.
  • Retain in the safe custody with sufficient document for time of seven years from the end of the calendar year, in which the remuneration is deducted in the respect of his employee, according to MTD rule.
  • Under rule 4 of MTD rules, make additional deduction from employee’s remuneration within the direction given by the Director General. 

 Following responsibilities should be informed to your employees:

  • To submit a TP3 form to the employer to report his employment with the previous employment in the current year.
  • To submit a TP1 form to the employer, if employee desire to claim with deduction and rebates in month. It will be affected subject to the approval by employer.
  • To submit a TP2 form, if employer want to include benefits in kind (BIK) and value of living accommodation (VOLA) as part of his relevant monthly remuneration by MTD amount subject to approval by the employer.
  • To submit with right information in a prescribed form relating to his own chargeability to tax, and collapse by the employee to do so constituency.

Responsibilities of Employees/ Self Employed     

  • Form BE: The eligible for this category to the occupant who does not carry on business, due date for them is 30 April of the following year.
  • Form BT: The category is occupant individual, due date is 30 April of the following year.
  • Form M: The eligible for this category are the non-occupants, due date of submission is 30 April of the following year.
  • Form MT: the entitled for this category are non-occupant, individuals (Knowledge expert and Workers), due date of submission is 30 April of the subsequent year.
  • Form M: This category is for the non-occupant individuals with business income, due date of submission is 30 June of following year.
  • Form MT: This category is eligible for the non-occupants individual (knowledge expert and workers with business income), due date is the 30 June of subsequent year.
  • Form B: Category entitled to the resident’s individual who carries the business, due date of submission is the 30 June of the following year.
  • Form P: This category is entitled to the partnerships, due date of submission is 30 June of the following year. 

Partnership’s Responsibilities

Filling income tax: 

While those who in the partnership does not pay tax, but it has to file the annual income tax return (called the Form P) to show all income earned and the business expenses deducted by the partnership throughout the year.

Personal income tax services

There are some rate arrangements done accordingly on the progressive of the tax; this is how Malaysia personal tax scales the rates.