7. I have registered my income tax number. What’s next?
You are responsible to:
- Submit Income Tax Return Form (ITRF) via e-Filing or manually;
- Report income and expenses, including deductions and rebates;
- Calculate/Compute income tax; and
- Keep records and relevant documents for seven (7) years for auditing purposes.
8. Do I need to submit supporting documentation along with ITRF?
No, but it shall be kept for seven (7) years, starting from the year in which the ITRF has been submitted.
9. What are the examples of supporting documentations?
- EA/EC Form
- Dividen vouchers
- Insurance premium receipt
- Book purchase receipt
- Medical receipts
- Donation receipt
- Receipt of payment of zakat
- Child's birth certificate
- Marriage certificate
- Other supporting documents
- Worksheet (if any)
10. What happen if I do not keep proper records and documentation?
Under section 119A, ITA 1967, he may be prosecuted and if convicted, shall be fined not less than RM300 and not more than RM10,000 or imprisonment for a term not exceeding 1 year or Both.
11. What forms do I need to fill out?
If you are a :
Individuals with no business income, please complete :
- Form BE : Resident Individual Who Does Not Carry On Business
Individuals with business income, please complete :
- Form B - Resident Individual with Business, Employment and Other Income
- Form M : Non-Resident Individuals With Business, Employment and Other Income
- Form BT - Resident Individual With Business, Employment and Other Income (Knowledge Workers / Expert Workers)
- Form MT - Non-Resident Individuals With Business, Employment and Other Income (Knowledge Workers)
12. When is the deadline for ITRF submission?
- Individuals with no business: before or on April 30th
- Individuals with business: before or on June 30th
13. What is the late submission penalty?
Failure to submit ITRF within the stipulated period is an offense and is subject to a penalty / tax increase under the Income Tax Act 1967.
14. I’m leaving for work abroad. What should I do?
Your employer is responsible to inform IRBM within thirty (30) days before the cessation date by completing and submitting Form CP21 (Notification by the Employer for Employees Who Want to Leave Malaysia) to the LHDNM office that handles your income tax file. The employer has to withhold any payment until tax clearance letter is received.
A written letter with relevant supporting documents on income derived in Malaysia will no longer be received due to working abroad must be submitted to the LHDNM office that handles your income tax file.
15. Is income derived from outside Malaysia taxable?
In general, income from employment should be taxable in the country where the services are performed regardless of the place where the contract is signed or where the remuneration is paid.
However, from the Year of Assessment 2004, income received in Malaysia from outside Malaysia is tax exempt. Therefore, any income received by resident or non-resident taxpayers in Malaysia are taxable (Paragraph 28 (1), Schedule 6 of the Income Tax Act 1967).
If you have worked abroad and the work carried out is related to the employment carried out in Malaysia, thus the employment income received will be taxable in Malaysia. Kindly log on to IRBM Official Portal, https://www.hasil.gov.my >> Legislation >> Public Ruling >> No.1/2011 – Taxation of Malaysian Employees Seconded Overseas for further information.
16. I quit my job in 2015 and re-employed in mid-2016 where, my annual income was less than RM 34,000. Do I need to submit the ITRF for the year of assessment 2016?
Pursuant to the provisions of section 77 of the Income Tax Act 1967 each person (other than companies, trust bodies and cooperatives) is required to submit the ITRF to the Director General:-
- Individuals carrying on a Business, Employment and Other Income before or on 30 June
- Individuals with Employment Income and Other Income (not carrying on business) before or on April 30th
in the year following a year of assessment, provided:
- Have taxable income for the year of assessment; or
- Does not have taxable income for the year of assessment but has taxable income or has submitted ITRF or has been required to submit ITRF for the year of assessment prior to the year of assessment.
17. How would I know if ITRF submission via e-Filing is thoroughly successful?
A confirmation notification will appear once the ITRF is successfully submitted for that particular year of assessment.
18. Do I have to fill up and submit a new ITRF to IRBM Information Processing Centre if the income declared was inaccurate?
ITRF is only to be submitted once. To amend, kindly send an appeal letter (stating the mistakes made), supporting documents and manual re-calculation to IRBM that handles your tax file. However, if the amendment includes under declared of income or over declared of reliefs which may results in additional tax, you need to fill in the BE/B Amended Return Form (ARF). The completed ARF must be submitted to the IRBM office that handles your income tax file.
19. My employer has made a Monthly Tax Deduction (MTD). Do I still need to submit ITRF?
Yes, you need to submit your annual income via e-Filing or manually if you are not subject to the MTD as the Final Tax.
20. How to fill in the ITRF manually?
Kindly refer to the IRBM official portal https://www.hasil.gov.my > Download > Form/Info > Individual > select Year of Assessment> Guide Notes/Explanatory Notes .
21. My tax file is in LHDNM Pahang and I am currently working in Shah Alam. Can I transfer my file to LHDNM Selangor?
Yes, kindly contact IRBM Pahang to transfer the tax file to LHDNM Selangor and notify (latest HASiL office) of any future changes.
22. Is medical expenses incurred for self is allowed?
You can claim medical expenses for serious illnesses incurred on self, spouse or child up to a maximum of RM6, 000.00 per annum and medical expenses for parents up to RM5, 000.00 per annum. Your claim must be supported with an original receipt issued by a medical practitioner.
23. Is the number of children eligible for relief limited /restricted under the Income Tax Act?
There is no limit on the number of children, however relief is only given for unmarried child who is :
- Under the age of 18 years;
- 18 years and above and studying full-time instruction or still under training (articleship) or bond in an enterprise or profession; or
- Physically or mentally disabled and registered with the Social Welfare Department (a maximum relief of RM 6,000.00).
24. I will retire from civil service, how do I get my income tax clearance letter?
Kindly contact the pejabat HASiL where your income tax file is registered and bring along Form CP22B (Notification of cessation of employment or cessation by reason of death for an employee in public sector) which has been completed by your employer. Please ensure the CP22B is submitted six (6) months before retirement period.
25. Is my donation to mosque fund allowed for a tax deduction?
Deductions for donations made to a body or fund approved by the Director General is allowed. The approval (notification through the gazette) is normally stated on the donation receipt.
26. Where can I check on the donation made is to a institution or organisation that has been approved by the Government of Malaysia?
Log on to IRBM's official portal> Internal Links> List of Institutions or Organizations Approved Under Subsection 44 (6) of the ITA 1967. The donation receipts must display the phrase "This donation is under Subsection 44 (6) of the ITA 1967".
27. Is payment to the Zakat Collection centre part of the tax calculation?
Yes because an individual resident in Malaysia who has taxable income is eligible to claim a tax rebate on the payment of zakat, fitrah or others required by Islam to the religious authority established under any written law. The amount of rebate allowed to an individual is limited to the amount of income tax charged for a year of assessment.
- “Religious authorities established under any written law” include the Zakat Collection Center and the State Islamic Religious Council.
- “Written law” means a legal enactment or legal instrument in force in Malaysia.
28. Is the term Zakat inclusive of income and property Zakat?
Zakat is defined on all types of zakat payments made in a calendar year.
29. How to claim tax relief under Section 132 and 133?
Section 132 - Refers to tax relief in respect of income derived from Malaysia which has been subjected to tax in Malaysia as well as countries outside Malaysia. Refer to the Form BE Guidebook to determine the countries which have Avoidance of Double Taxation Agreement with Malaysia. Calculations can be made in HK-8 of the Form BE Guidebook.
Section 133 - Refers to tax relief in respect of income derived from Malaysia which has been subjected to tax in Malaysia as well as countries outside Malaysia. These countries do not have Avoidance of Double Taxation Agreement with Malaysia and the calculation can be made in HK-9 of the Form BE Guidebook.
30. What is MTD as Final Tax?
Effective from the Year of Assessment 2014, MTD as the Final Tax allows taxpayers with employment income and have MTD the option of not submitting ITRF by e-Filing or manually as per conditions.
31. What are the conditions of MTD as Final Tax?
- Has only one source of employment income under section 13 of the ITA 1967, including Benefits-In-Kind (BIK ) and Value of Living Accommodation (VOLA);
- MTD is deducted in accordance with the Income Tax (Deduction from Remuneration) Rules 1994 or MTD not applicable as income below the deductible level (MTD ‘0’);
- Serving the same employer;
- Taxes are not borne by the employer; and
- Not opted for joint/combined assessment with the spouse.
32. I am an engineer and pay professional fees to the Association of Engineers. Where can I claim this fee?
Kindly deduct from Gross Income (as per EA Form). The net amount must be filled in the Statutory income from employment column (deduction from professional fees).
33. I have a rental income as well as rental-related expenses. How do I compute my income and claim these expenses?
You can make the calculation as in HK-4 (Details of Property / Assets and Rent Amount) in the Form BE Guidebook to get the net rent and this amount is transferred to the statutory rental income column. Alternatively, you can deduct those expenses from the gross rental amount. Please ensure that the expense is an allowable expense.
34. How do I fill up my pension income in BE Form?
Pension income must be reported if:
- Retirement before the age of 55
Your pension income received until 55 years of age is taxable. Do fill up the pension income at the pension, annuity and other periodic payments field.
- If a person receiving more than one (1) pension incomes, only the highest amount of pension will be tax exempted. Kindly refer to Paragraph 16 of Schedule 6 of the Income Tax Act 1967.
- Derivative pensions
Derivative pensions received are not taxable.
Example: The wife/husband receives a pension (issued) on the death of the spouse. This pension is not taxable.
35. Initially I only receive employment income, but started doing business later. Which form to fill in?
Kindly fill in and submit B Form for business and employment incomes before or on 30th June.