22 April 2006

e-Filing: File your income tax return online

This is the first year the Inland Revenue Board (IRB) Malaysia introduces the use of online income tax return filing.

This is the steps to file tax return online.

Source: The Sun newspaper, 19 April 2006

Getting a digital certificate
1. Go to the nearest branch to obtain a PIN number. The PIN number is a 16 digit number sealed like a usual bank's credit card PIN number.
2. Log on to https://e.hasil.org.my/
3. Back up your digital certificate and password online by clicking the link "penyelengaran sijil digital" (digital certificate maintenance).
4. View or remove the certificate from the computer, open an Internet Explorer window and go to "Tools > Internet Options > Content > Certificates".

Keep your password confidential and remove the certificate if the computer you are using is shared by others. After registration, the pin number is no longer needed, instead you will use your password.

Using the BE Form
1. Download form from e-Hasil
2. Install form in your "program files" folder
3. Go to "Start" and select BE form to open the form. The PDF form requires Adobe Reader with, at least, Version 7.0.5. If your Adobe Reader is Version 6.0 you will need to download 20MB to upgrade the Adobe Reader to Version 7.0 and to download another 9MB to upgrade your Adobe Reader to Version 7.0.5. If you are using Broadband, it will take you slightly less than one hour to complete both downloads.
4. Fill in the form.
5. Click "cetak" to print, "export" to save the completed form to your hard disk, diskette or thumb drive.
6. Click "tandatangan dan hantar" to attach digital certificate and send form to the IRB via your internet connection.
7. You should receive immediate confirmation of receipt. If not, keep resending until you do.
8. Print and save confirmation.

Once submitted, error in the form cannot be corrected by sending in a second form. You will have to drop by an IRB branch to make the correction.

You can download the manual from e-hasil, call 1-300-88-3010 or email callcentre@hasil.org.my

Source: The Sun newspaper, 19 April 2006

02 April 2006

Are you subject to Malaysian income tax?

There are two main factors in deciding whether you are subject to Malaysian income tax:
a. Whether you are resident of Malaysia (which depends on duration of your stay in Malaysia, regardless of your nationality or citizenship.)
b. Whether your source of income is from Malaysia or outside Malaysia.

Being a resident means, you have stayed 182 or more days in Malaysia during the assessment year (for individual it means the calander year).

1. If you are a non-resident and without source of income from Malaysia, you are not subject to Malaysian Income Tax. So even if you are a Malaysian working in Singapore with Singpore PR status and are travelling back often to Malaysia for holidays, most likely your stay in Malaysia is less than 182 days. So you are a non resident. Without an income source from Malaysia, you are not subject to Malaysia tax at all.

2. Even if you are a resident of Malaysia, your income from overseas, i.e. employment income, internet business income, dividend income from Singapore stocks, etc. are exempted from Malaysian Income Tax. You may want to declare it in your Tax return, but be careful of your calculation, these overseas incomes are tax exempted. You should not pay tax for your overseas incomes.

3. If you are a non-resident with source of income from Malaysia, you are subject to Malaysia Income Tax over the income source from Malaysia. There is a help book on Self Assessment System for Non resident from Lembaga Hasil Dalam Negeri (Inland Revenue Board) for download.

4. If you are a resident of Malaysia, and you have source of income from Malaysia...think what? Off course you have to pay tax.

Part 1: Malaysian income tax filing deadlines
Part 2: Malaysian income tax processes
Part 3: Are you subject ot Malaysian income tax?

01 April 2006

Income tax processes

Where should you send tax return to?

Use the envelope comes with Borang BE or B that you should have received from IRB/ LHDN some months ago. The address is:
Lembaga Hasil Dalam Negeri Malaysia
Pusat Pemprosesan
Aras 10-18, Menara C, Persiaran MPAJ
Jalan Pandan Utama, Pandan Indah
Karung Berkunci 11054
50990 Kuala Lumpur
If you have not received the form from IRB/ LHDN, call the branch that keep your tax file and get a copy.

Like previous years, we may want to cross our finger and to look around popular shopping centres for IRB's helpdesk and tax return collecting counter.

And since there is no announcement, unlike last year, we should not send our tax return to the nearest assessment branches.

What should you include in the envelope for tax return?

1. DO NOT include payment in the envelope to Pusat Pemprosesan. Pusat Pemprosesan is meant to process Form/ Borang B or BE and to input information into IRB's database.

2. If your final tax liabilities exceed your schedular tax deductions and monthly tax instalments, this means tax paying position, you just need to include Form B or BE into the envelope.

3. If your schedular tax deductions exceed your tax payable (cukai kena dibayar), that you have overpaid your tax, beside Form B or BE you will need to include Form HK-3 and the original dividend vouchers into the envelope.

If you are at tax paying position, read the last page of Borang BE or B where you can find the postal address and collection counter's location. (The last page of Borang BE or B is Slip Pengiriman Bayaran (CP501). It is at the back of the Slip.)

You can also make payment through Bumiputra-Commerce Bank Berhad and Public Bank Berhad. Just walk in to the bank and ask the bank officer for appropriate bank-in-slip for tax payment.

Yes, the deadline to settle the payment is 30 April 2006.

If you have overpaid your tax, write a letter to the assessment branch for refund. As far as I know there is no deadline for them to pay you back. So remember to call the IRB officer who in charge of your file.

Part 1: Malaysian income tax filing deadlines
Part 2: Malaysian income tax processes
Part 3: Are you subject ot Malaysian income tax?

31 March 2006

Tax Filing - Malaysian Income Tax for Individual

When is the tax filing deadline? Where to file tax return? What documents do we need to send to Lembaga Hasil Dalam Negeri?

The problem about income tax is that we only do it once a year and therefore we tend to forget how we had successfully dealt with it last year. I have to admit even as an accountant who is used to corporate tax, I can be very unsure of what to do next when it comes to my own income tax return filing!

I hope this series of writings can provide a good Malaysian Income Tax reference for individual.

First thing first, this is the web site of Lembaga Hasil Dalam Negeri. But don't waste time searching to find information on Income Tax filing. I tried, nothing there...yet.

If you are a salaried employee without business source of income, you should fill up Form BE and your tax filing deadline is 28 April 2006 as 30 April 2006 falls on Sunday.

Please take note that dividend income and rental income (generally) are not considered as business source of income. For rental income, you will need to own several residential rental properties and/or commercial properties to be considered as business source of income.

So this means if you are a salaried employee owning an apartment for rental and few stocks with dividend income and without a business registered under your name, you should fill up Borang BE and file the tax return by 28 April 2006.

If you have a business source of income you should fill up Form B and your tax filing deadline is 30 June 2006.

Part 1: Malaysian income tax return filing deadlines
Part 2: Malaysian income tax return processes: from filing to payment...
Part 3: Are you subject to Malaysian Income Tax?