Digital Business

Introduction

Digital Business is a term used to refer to an economy activity based on the use of digital technology. Any transactions conducted through digital technology, including the providing of information, promotion and advertising, marketing, supply / delivery of goods / services, even though payment and delivery relating to such transaction may be conducted offline.
Individual / Company involves in Digital Business will be taxed under Income Tax Act 1967.

Responsibilities Of Individual/Company involves in Digital Business

Every Individual/Company must have an income tax file number:
- Declare all income received include Digital Business activities.
- Registration of Tax Identification Number can be made through e-daftar
Complete and submit Form e-B via e-filling.
If business is a partnership:
- Complete and submit Form e-P via e-Filing (responsibility of managing partner) and e-B
- Submit Form e-P without partnership's account
If partnership cease operation / changes to sole proprietorship / becomes a sendirian berhad company, inform in writing to LHDNM.
Pay tax through ByrHASiL

Required Document to Be Kept

Keep documents, records and business account as below for 7 Years

Statement from payment gateway (Paypal, ipay88, MOL, etc)
Domestic and personal expenses
Bank statement
Income statement from advertising company (such as Nuffnang, Google Adsense, etc)
Sale invoices and purchase records
Confirmation of sales and purchases via e-mail, etc
Agreement
Original receipts for each deduction / expense claimed, etc

No	Sector	Business description	Flow of activities
1	Retailing	Dropship, Agent, Stockist etc.	Taking orders, packing, receiving payment, delivery.
2	Transport & Logistic	e.g Poslaju, Gdex, Nationwide, Skynet, Air Asia, Car Rental, Online ticketing etc.	Order for services, payment, insurance, delivery.
3	Financial Services	Bank, Payment gateway, Crypto currency, credit card, debit card, loyalty card, membership card etc.	Validating financial status, issue statement.
4	Manufacturing & Agriculture	3D Printing etc.	Taking orders, packing, receiving payment, delivery.
5	Education	ebook, online tutor, online tutorial etc.	Taking orders, packing, receiving payment, delivery.
6	Healthcare	Healthcare products.	Healthcare products.
7	Broadcasting & Media	eg. Youtube photography (services as photographer & selling image) etc.	Content creation, uploading, receive payment.
8	Sharing Economy	Sharing car, house, room, bikes, etc.	Order for services, payment
9	Subscription	Comic online, newspaper online, video streaming, audio streaming etc.	Registration, payment.
10	Services	Infrastructure and software as services, event management, wedding planner etc.	Order for sevices, payment.
11	Advertisement	Blogger, instafamous, insta review.	Content creation, uploading, payment
12	Crowd Sourcing	Contoh: kickstarter.com	Content creation, create prototype, uploading, receive fund / payment.
13	Selling of Digital Product	Data, ebook, apps.	Content creation, uploading, payment.
14	Cryptocurrencies	Trading in cryptocurrencies.	Trader, Seller, Miner.

Allowable	Non-Allowable
Expenses incurred in the production of business income. Example: Wages / salaries Employee's EPF / SOCSO Business insurance (burglary) Business premises rental Interest on business loan Domain annual fees Server rental	Domestic and private expense. Example: Personal electricity & water supply bill, children's education fees and depreciation Purchase of personal assets. Example: Car House Furniture Business initial expenses. SSM registration Registration fees of domain name / server

Allowable

Non-Allowable

Expenses incurred in the production of business income.
Example:

Domestic and private expense.
Example:

Personal electricity & water supply bill, children's education fees and depreciation

Purchase of personal assets.
Example:

Business initial expenses.

Capital allowance on business assets are claimable and will be deducted against adjusted income.

Type of Allowance	Type of Asset	Rate
Initial Allowance	All types of asset	20 %
Annual Allowance	Computer and ICT Equipment	40 %
	Motor vehicles, heavy machinery	20 %
	Plant and machinery	14 %
	Peralatan pejabat, perabot dan lekapan dan lain-lainOffice equipment, furniture and fittings and others	10 %