Tax filing for sole proprietorship 03

SOLE proprietors can optimise their taxes by taking capital allowances on business assets into account.

Fixed assets: Fixed assets acquired for use in the business are eligible for tax relief in the form of capital allowance. Capital allowances are deducted from the adjusted income of a business to arrive at statutory income. Depreciation on fixed assets is not tax deductible.

Newly acquired assets will be given an initial allowance of 20% and annual allowance of 10%, 14%, 20% or 40%, depending on the asset category.

The capital allowance amount is computed on a straight-line basis by reference to the cost. Full capital allowance is given even though it is acquired and in use for less than a year.

The cost of the asset includes alteration costs and incidental costs for the installation of fixed assets.

Small-Value Assets: With effect from YA 2006, where the sole proprietor acquires fixed assets (small- value assets) which are not valued at more than RM1,000 for each asset, the full cost of the asset enjoys capital allowance in a year (100% cost = capital allowance).

The maximum capital allowance allowed for small-value assets in a year is restricted to RM10,000.

To optimise tax planning, the acquisition of fixed assets like printers, telephone systems, fans, calculators and kettles should be staggered to reduce taxable income.

Capital allowance is given on a year’s basis even if it is acquired and in use for less than a year. Sole proprietor may consider accelerating the acquisition of small-value assets in November/December 2008 instead of January 2009 as capital allowance is available in YA 2008 to reduce taxable income.

Motor vehicles: Motor vehicles used in business are entitled to capital allowances.

The qualifying cost eligible for capital allowance is restricted to RM100,000 provided:

·it is a newly acquired car; and

·the cost does not exceed RM150,000.

Other motor vehicles which do not satisfy the above two conditions will be given qualifying cost of RM50,000 even if the actual cost may have exceeded RM50,000.

Capital allowance can be claimed on the full cost of commercial vehicles, which are motor vehicles used directly to transport trading stock, such as lorries and vans.

Other motor vehicles used in the business are known as passenger vehicles, which are restricted to a maximum cost of RM100,000. These are used in business to meet customers, bankers or suppliers. To maximise claims on passenger vehicles up to RM100,000, the sole proprietor has to ensure the cost of the new motor vehicle does not exceed RM150,000.

Personal fixed assets: Sole proprietors may transfer personal assets for use in their business. Once such assets are used in the business, capital allowance is then available.

The sole proprietor has to first establish the market value of the assets at the time they were brought into use in the business. The assets will then be recorded in the balance sheet of the business.

Annual allowance is given on the market value of these assets, but no initial allowance is allowed.

In the event that the sole proprietor continues using the assets for personal use, the portion of such personal usage must be excluded and no capital allowance is available on that portion.

Details: Tax planning for business assets

Tax filing for sole proprietorship 02

SOLE proprietors should take advantage of allowable business expenses and deductions on bad debts to reduce their taxable income.

Business expenses: Revenue expenses incurred directly in the production of business income are tax deductible against the gross income of said business and are commonly known as business expenses.

The general rule of thumb is that business expenses must be recurring in nature, permissible under the Act, have been incurred, reasonable and acceptable to a particular industry, and are not related to the acquisition of capital assets or expenses.

Other deductible expenses available for tax deductions include accounting fees, legal fees for recovery of trade debts, rental for premises, sales advertisement, entertainment expenses for trade debtors, and cash stolen from the cash register by cashiers.

Non-deductible expenses would include items like prepayment of insurance expenses for fire and theft; costs of renovation or construction for premises; fines imposed for traffic offences or custom offences; penalties on income taxes; donations to political parties, church or religious body; legal fees for bank loans or acquisition of premises; and legal fees for defense in suits for violation of trade regulations.

Mixed overhead expenses: Sole proprietors often have limited resources to acquire assets for exclusive business use. Therefore, personal assets such as motor vehicles, mobile phones, home offices and computers are mutually used for business and private or domestic purposes.

In such cases, a sole proprietor in a business has to segregate expenses incurred, differentiating between business expenses and private expenses. Items such as petrol, repair and maintenance on vehicles, telephone charges, Internet charges, house interest expense and utilities have to be apportioned into business and private expenses.

In practice, sole proprietors first need to segregate out the private expenses.

A reasonable and reflective basis has to be developed by analysing the actual expenses and usage for several months.

Once a basis is ascertained, the ratio will be applied on such expenses from year to year. The common basis from a practical viewpoint will be 1/3, 1/4 or 1/5 for private use, depending on the business industry and personal conditions.

Since the taxpayer is fully responsible for the tax computation in a self-assessment system, penalties on an incorrect return would be imposed if the taxpayer intentionally and purportedly claims private and domestic expenses as business expenses. This could amount to:

·100% of the tax undercharged

·a fine of RM1,000 to RM10,000.

Entertainment expenses: These are incurred primarily to maintain existing sales revenue or to increase sales.

Although entertainment expenses are generally 50% deductible, the following entertainment expenses are, however, fully tax deductible as specifically allowed by the Act:

·Staff amenities such as the provision of food and beverages in the office, annual staff dinners, company trips, and family days.

·Promotional gifts at trade fairs, trade or industrial exhibitions held outside Malaysia and for the promotion of exports from Malaysia.

·Promotional samples of the business’ products.

·Provision of entertainment for cultural or sporting events; open to public; wholly to promote business.

·Provision of promotional gifts; within Malaysia; consisting of articles incorporating a conspicuous advertisement or business logo.

·Provision of entertainment which is related wholly to sales arising from the business.

Public Ruling 3/2004 clarifies entertainment related wholly to sales as entertainment which is directly related to sales provided to customers, dealers and distributors but excluding suppliers (trade creditors).

Bad debts: Specific provisions for bad debts are tax deductible, provided they arise from credit sales (trade debts) and there are commercial reasons for such provisions. Bad debts arising from sales of fixed assets to other debtors are not tax deductible.

Bad debts written off on trade debts are tax deductible in situations where trade debtors are bankrupt, dead, have absconded or liquidated.

At the year ending Dec 31 and interim periods at March 31, June 30 and Sept 30, 2008, sole proprietors must analyse their trade debtors aging report to ensure immediate action can be taken on defaulted trade debtors and make continuing provision of specific provision for bad debts.

As the sale is assessed to tax on an accrual basis, the specific provision for bad debts can reduce business adjusted income. The particulars of the trade debtors must be recorded in detail and the reasons for the provision and the non-supplying of stock to them are to be compiled for tax audit purposes.

Specific deductions: The following expenses are tax deductible against gross business income even although they may be capital expenditure and only remotely connected with the business:

·Equipment like wheel chairs to assist disabled employees to work in business premises.

·Cash donations or in kind to public, college or school libraries up to RM100,000 in a year.

·Expenses incurred to maintain a child care centre for employees.

·Sponsorship of art/cultural or heritage activities approved by the Culture, Arts and Heritage Ministry up to a ceiling of RM500,000 for local, RM200,000 for foreign and RM500,000 for combined local and foreign activities.

Double deductions: The following expenses enjoy additional deductions in arriving at adjusted income:

·Remuneration paid to disabled employees.

·Insurance premiums paid to a Malaysian insurance company on importing and exporting cargo or raw materials.

Details: Business expenses and bad debts

Tax filing for sole proprietorship 01

ACCORDING to the Companies Commission of Malaysia, the majority of the 810,150 registered companies in Malaysia are owned by sole proprietors or business enterprises.

These entrepreneurs are probably paying too much in taxes, since professional tax advice would be too costly for sole proprietors with a typical annual turnover of RM300,000 to RM500,000.

Here is how you can optimise taxes and avoid penalties by implementing permitted accounting standards, segregating trading stock from items for personal use and applying stock write-down and obsolescence policies.

·Sales/Revenue: Revenue is recognised once trading goods are sold to customers. In practice, the issuance of sales invoices are demarcation points for sales to be recorded in the accounts. For service industries, revenue is recognised at the point when services are rendered and completed.

Sales revenue at all times must be recorded at market price, which is the arm’s length or actual sales price between the trader and his customer.

·Sales recorded on accrual basis: Accounting standards in Malaysia require revenue to be recorded on an accrual basis. This means sales must be recorded notwithstanding whether it takes place on credit or cash terms; whether cash is received or not is irrelevant.

·Cash accounting: This is not a permitted accounting standard in Malaysia. Under the cash accounting basis, revenue is recognised solely based on cash received and there is no reference to the sale of goods or completion of services.

Sole proprietors computing income tax on this basis are considered as submitting an incorrect return and will be liable to a tax penalty of 100% and/or a fine up to RM10,000.

·Deemed sales for use of own stocks: Traders who wish to use their trading items (stocks) for donation, personal use or as gifts must record these items at market value, since Section 24(2) of the Act deems these as sales revenue. These transactions are treated as sales and the “profit” which was never earned is subject to income tax.

To avoid this situation, the sole proprietor has to request that the supplier invoice him separately on his personal account for the item that he intends to give away or keep for his own use. Do not bill the item to the business enterprise.

·Cost of sales: Trading stocks are assets to the sole proprietor and reflected in the balance sheet. The cost of trading stock is only allowed as a deduction against sales revenue when the stock is sold.

Excess unsold stock is an asset and not deductible. Sales quantity and the cost of sales must be identical.

The sole proprietor should develop a stock write-down policy to evaluate the quantity or quality of unsold stocks as the Act allows tax deductions for stock written down or stock write-offs due to obsolescence.

The stock policy has to be applied consistently for at least three years. Tax authorities may review such a stock policy during the tax audit.

The write-offs of the stocks or write down in the value of trading stock must reflect actual market conditions. Sole proprietors must record the details of such stocks and provide the specific reason why certain stocks are written off or written down as part of the documentary evidence for tax audit inspection.

Details: Revenue recognition and cost of sales

Easy Guide to Taxation for Employees 02

On short-notice payment and child-care allowance

Q: In November 2008, I voluntarily ceased my employment and had to pay short notice of RM2,000 (supported by an official receipt). However, I was compensated with a sign-in bonus of RM6,000 from my new employer.

The problem is the sign-in bonus is stated in my EA form but the short notice of RM2,000 is not deducted from the form. Can I automatically net off the amounts and disclose RM4,000 as my sign-in bonus because RM2,000 is my actual expense?

A: Sign-in bonus is capital in nature and not taxable in the event the salary that you receive subsequently upon commencement/exercising of employment with the new company is at the commercial rate. The amount is not to be included in the EA form.

However, if the sign-in bonus is in lieu of reduced salary, the amount is income in nature and subject to income tax. In this scenario, the amount is to be included in the EA form.

The amount paid by you as compensation for short notice of resignation is not deductible as it is not directly incurred in deriving employment income as you have stopped working in your old company.

My former company did not disclose my travelling allowance of RM1,500 in my EA form as tax-exempt benefits. Upon calling it, the company refused to issue a fresh EA form to me. What can I do?

Travelling/petrol allowance received by an employee for travelling from home to workplace and vice-versa is exempted up to RM2,400 while travelling/petrol allowance received for travelling in exercising employment, is exempted up to RM6,000.

In your case, if the amount is authentic and verifiable, even without a revised EA form, you may straight away deduct the amount from your total income reported in the EA form. The adjustment is at column C1 where, the amount is represented by: Total income (as per EA form) – travelling allowance incurred (RM1,500) = Total income from employment (C1)

I paid RM280 per month for my four-year-old daughter’s nursery in 2008. I understand that child-care is exempted from tax up to RM2,400 per year. Can I claim it (since I paid for it and it’s not an allowance)?

Child-care allowance of RM2,400 is tax exempted if provided by employer to staff. In your case, no deduction is available as such allowance was not paid by your employer. You have only incurred a domestic expense which is irrelevant in computing your employment income tax. Domestic expense is not deductible.

I sought treatment using the “Tui-Na” therapeutic massage for my left leg. The total cost of treatment was RM89.60. Can this sort of expense be treated as a form of medical expense tax relief under the traditional acupuncture and ayuverdic categories?

The medical benefit (including Chinese Tui-Na) is tax exempt provided it is given by the employer to the employee. Benefits cover ayurvedic and acupuncture effective YA2008. However, you cannot claim this expense when computing your employment income, since it is paid by you and not your employer.

If a self-employed person makes a contribution of 12% to the EPF under his firm, is the contribution deductible to the proprietor firm and is there any limit?

If you are earning business income as a sole proprietor, you may utilise the B form to submit your tax return. BE form is for individuals earning employment income. In both cases, the total EPF contribution by the employee or the self-employed person plus the amount of insurance premium paid are deductible up to the aggregate of both amounts (up to a maximum of RM6,000).

Where the employer is concerned, a Sdn Bhd firm is entitled to claim the EPF contributions for employees as a full deduction from their business income and the maximum contribution is 19%, as governed by Section 34 (4) of the Income Tax Act, 1967. However, for the sole proprietor, the amount is not deductible when computing business income.

How do I disclose interest subsidies on housing, car and education loans?

Interest subsidies on housing, education or car loans provided by the employer to the employee are all tax-exempted in full, provided the aggregate amount of loans from all of the above does not exceed RM300,000.

If you qualify for exemption and your documentation is verifiable, you may deduct the appropriate amount from your total income reported in the EA form. The adjustment is at column C1 where the amount is represented by:

Total income (as per EA form) – exemptions entitled (subject to maximum) = Total income from employment (C1)

How do I apply for retrenchment benefits for my husband?

As long as the compensation is given by the employer to the employee (your husband), he is entitled to claim the exemption. No prior approval from Inland Revenue Board is required. The computation is as follows: Employment income as per EA form – (RM10,000 x the years of completed service) = Total employment income (column C1 in BE form)

I understand that the payment of bonus/directors’ fees related to 2008 in year 2009 has the tax savings advantage of 1% if the annual income is RM250,000 and above. Please explain.

If the chargeable income is more than RM250,000, the tax rate is 28% for YA2008. However, the tax rate will be 27% in YA2009. Hence, if your bonus is disclosed in the EA form in 2009, you will save 1% since your chargeable income is assessed on 27% (YA 009) instead of 28% (YA2008).

Details: Tips on filing your income tax

Easy Guide to Taxation for Employees 01

Q: As a sales and marketing executive with a financial institution, I am paid a basic salary and sales commission and am not entitled to any claims (petrol, toll, parking and car maintenance). I use my own car to do my job. My average monthly expenses for sales and marketing activities are about RM500.

I understand that with the new provisions under Budget 2009, the employee is entitled to tax exemption for certain benefits. Since my company does not provide such benefits, can I claim marketing and travelling expenses under “Perbelanjaan Keraian”?

A: The actual amount you incurred can only be deducted provided that you received either entertainment or travelling allowances from your company. In your case, the amount you incurred is not deductible.

I understand that meal allowances can only be claimed for tax relief for outstation travel or overtime. I am being transferred to a branch in Klang next month from my present workplace in Puchong, and my employer has agreed to give me an additional monthly amount of RM800 as meal allowance.

Can I deduct my meal allowances since I reside in Subang Jaya and don’t do overtime? My working hours are 9am-5pm and I work six days a week.

Your meal allowance for employment in the Klang branch will not be eligible for deduction as it is not in respect of working overtime or travelling outstation.

What are the tax exempt employee benefits in relation to employees who have been given a fully-expensed company car and a company petrol card? I know that I will be assessed on the Scale Car and Fuel benefits for the use of the company car. For YA2008, am I entitled to the relief of RM2,400 for the tax exempt petrol card?

If so, can this RM2,400 be deducted from the Scale Fuel charge in YA2008 so that the Scale Fuel benefit assessed in the tax year will be lowered by RM2,400?

If (1) above is allowed and my actual petrol card expenses for the year exceed RM2,400, can the balance of actual petrol bills spent under the petrol card be deducted from the Scale Fuel benefit up to the maximum of exhausting the amount of the Scale Fuel benefit?

The benefits in kind with regards to the car benefit and fuel benefit are to be taxed. These cannot be deducted as additional tax exempt benefits.

Monthly parking claims and fixed mobile-phone allowances are submitted to my company at the end of the month and these will be reimbursed into our salary in the following month. These claims are subject to EPF contribution. Therefore, are they tax-exempt for YA2008 and do they need to be disclosed under the tax-exempt benefits in the EA form?

Both parking and phone allowances up to the actual amounts incurred which are borne by the employer are tax exempt with effect from YA2008. The amount is to be disclosed as tax exempt benefits in the EA Form.

Can interest on housing loans and car loans be deducted from gross salary on the EA form? Are medical expenses such as maternity expenses deductible?

Interest on housing and car loans are deductible only if paid by the employer on a total loan amount of up to RM300,000. Similarly, medical expenses are only deductible if the amount incurred has been paid by the employer and this benefit is extended to maternity and traditional medical expenses. However, should these expenses be paid personally by the employee, they are not tax deductible.

My organisation is a resident company and our expatriate Japanese director and technical manager has two types of income – salary from Malaysia and salary from Japan. Please advise whether we have to declare our Japanese director’s income in total (i.e. Malaysia and Japan) or just Malaysia-derived income to the Malaysian government?

All employment income derived by the Japanese expatriate for exercising employment in Malaysia is subject to income tax, including the amount paid in Japan, if it is related to the exercising of employment in Malaysia.

Is the tax benefit on childcare allowance up to RM2,400 a year to be deducted directly from the EA form? Is this applicable if there is no such benefit from the company I work for?

The childcare allowance is only tax exempted if you receive such an allowance from your employer; otherwise the exemption will not be applicable to you.

In the event you do receive the childcare allowance, the amount (the lower of the actual amount received or RM2,400) is to be excluded from the employment income and disclosed in section C1 of the Form BE.

I bought a comprehensive insurance policy (life + medical + investment) and the insurer is unable to split the premium payment into life insurance and medical insurance. Can I treat this totally as a medical premium as I have already disclosed RM6,000 for my life insurance premium and EPF deduction?

In the event that the amount cannot be segregated, the amount is to be disclosed either as life or medical insurance premiums based on the description stated in the insurance premium receipt.

Source: Easy guide to tax filing

Lessening the burden

FOR YA2008, employees need to make a minimum annual salary of RM26,804 before triggering income tax. Married couples should ensure that the higher-earning spouse claims child relief to lessen the tax burden.

Details: More tips on lessening your income tax burden

Tax reliefs:

Changes in tax regulations

These changes in tax regulations are:

Bonus/directors’ fees
Employees receiving director fees or bonuses in 2009 in relation to work performed in 2008 or prior to 2008 will only be taxed in year of assessment (YA) 2009 under a new amendment to the Income Tax Act 1967 to ease filing under the self assessment system via the Finance Act 2009 (gazetted on Jan 8, 2009).

These director fees or bonuses would be included in the EA Form 2009 to be submitted on April 30, 2010. They must not be treated as income in 2008 and should never be included in EA Form 2008.

EPF contributions: 11% or 8%?
Taxpayers need to consider the tax consequences if they elect to pay the mandatory minimum contribution of 8% to the Employees’ Provident Fund (EPF).

By opting to contribute 8% to EPF instead of the previous 11%, they lose out on dividends, decrease the potential size of their retirement nest egg, and could suffer additional income tax.

Details: If you pay minimum EPF how does it affect you taxes

Tax benefits for employees

IT’S tax season again! Employees are required to submit their tax return Form BE for year of assessment (YA) 2008 on or before April 30, where the income assessed is in relation to the basis period of Jan 1 to Dec 31, 2008.

Additional goodies for YA2008:

Compensation for loss of employment
Employees who are retrenched on or after July 1, 2008 will be granted an income tax exemption of RM10,000 for each completed year of service with the employer or companies in the same group. If the retrenchment was before July 1, 2008, then the amount exempted for each year of service will be RM6,000.

Tax-exempt employee benefits — allowances
(a) Petrol card/petrol allowance/travel allowance
(b) Meal allowance for working overtime, travelling outstation.
(c) Parking allowance.
(d) Medical treatment for employees, spouses and children to include traditional medicine such as ayurvedic treatment and acupuncture.
(e) Interest subsidies on housing, car and education. The total loan amount is restricted to RM300,000.
(f) Childcare allowance up to RM2,400 a year.
(g) Employers’ products or services which can be provided free or at a discount which must not exceed RM1,000 a year.
These allowances need to be disclosed in the Form EA as tax-exempt benefits although they are not taxable on employees. These benefits are also available for YA2009.

Official duties – travelling allowance
In the Budget 2009 announcement, the Government said petrol cards, petrol allowance, travelling allowance and toll cards for official duties up to RM6,000 a year will be tax-exempt.

This means that the employer will exclude RM6,000 a year from the taxable income of employees as reported in the EA Form. However, the employer needs to disclose this RM6,000 as a tax-exempt benefit in the EA Form.

Details: Tips for filling your income tax returns

Income Tax : Taxable Income

ALL revenue income derived from a source within Malaysia are subject to tax unless specifically exempted. Foreign source income remitted into Malaysia are exempted from tax.

Employment income
Employment income which must be reported in the employee’s tax return includes the following:

• Salary, wages, commission, bonus, gratuity, perquisite or allowances (perquisite would include the following payments made by the employer on behalf of the employee: utility bills, income tax, children’s education expenses, individual club membership, employee share option scheme and loan interest);
• Benefits-in-kind such as car, driver, corporate club membership, mobile phone, household furniture and appliances; and
• Value of living accommodation, servant and gardener.

Certain expenses are allowable against the employment income such as professional membership fees, and travelling and entertainment expenses. The onus is on the employee to prove to the Internal Revenue Board that the expenses were incurred for business purposes.

Employment income which is exempted from tax and need not be reported includes:

• Leave passages provided to the employee, his spouse and children up to a maximum of RM3,000 for one overseas trip and up to a maximum of three local trips per year;
• Retirement gratuities (on meeting certain conditions);
• Employees Provident Fund withdrawals; and
• Dental or medical treatment or child care benefit.

Dividend income

The tax treatment will be as follows:

Normal dividends: Dividends are received net of tax by individual shareholders. The gross amount of the dividend is declared in the tax return.

A Section 110 tax credit (27%) can be claimed against the income tax suffered on the dividend income. If a resident individual’s marginal tax rate is lower than 27%, the excess tax credit can either be refunded or used to set off against the tax payable on other sources of income.

Tax exempt and foreign dividends: These dividends are exempted from income tax and need not be declared in the tax return.

Expenses which are deductible against the dividend income are:

• Commission or brokerage fee;
• Stamp duty on transfer of shares; and
• Interest on loan obtained to purchase the shares.

Interest income
Interest income received is subject to income tax and is required to be reported in the tax return. However, interest paid by a financial institution in Malaysia to a resident individual is not required to be reported in the individual’s tax return as the withholding tax of 5% is treated as a final tax.

Rental income
Rental income is required to be reported in the tax return and is normally treated as an investment income.
Expenses which are allowable against the rental income are:

• Quit rent and assessment;
• Insurance premium on the property;
• Replacement costs on assets used in the property;
• Repairs and maintenance;
• Interest on loan obtained to purchase the property;
• Commission and agency fee;
• Advertisement for letting out of property.

Expenses incurred on advertisement, commission and legal fees for the first tenancy agreement are not allowed as these expenses are capital in nature.

Rental losses are not allowed to be utilised to set-off against other sources of income.

Business income
The taxable income of a business is determined after deduction of the following:

• All expenses and outgoings incurred wholly and exclusively in the production of the business income;
• Capital allowances; and
• Any unabsorbed business losses brought forward.

Expenses which are wholly and exclusively incurred in the production of the business income would include:

• Interest on loan used in the business;
• Rental in respect of any land or building occupied;
• Employee costs;
• Specific provision for doubtful debts/bad debts; and
• Repairs and maintenance.
• Depreciation on fixed assets is not deductible.

However, capital allowances can be claimed provided the fixed assets are owned by the taxpayer and are in use for the business at the end of the basis period.

Related post:
Income Tax : Personal Returns
Income Tax : A Savvy Taxpayer
Income Tax : Forms Printing

Income Tax : Personal Returns

Form due dates:
B (Resident individual with business income) - June 30
BE (Resident individual without business income) - April 30
M (Non-resident individual) - April 30

WHO is required to submit a tax returns?
A person who is chargeable to tax is required to submit an income tax return to the Inland Revenue Board (IRB).
An employee who is single and earning RM27,000 annually would be chargeable to tax if his claim for relief is limited to self relief and Employees Provident Fund.

HOW to filing tax returns for the first time?

An individual will have to register a tax file with the IRB by going to the nearest IRB office and bringing along his identity card/passport, Form EA and marriage certificate, if married.

HOW will you be taxed?
An individual is taxed on his chargeable income after deduction of personal reliefs. He will be taxed at scale rates starting from 0% (on the first RM2,500) to a maximum of 28% (on chargeable income exceeding RM250,000).

WHAT should a taxpayer do if he did not received tax return form?
Any taxpayer who has not been issued a tax return by March 31 must request for one from the IRB by April 14.
For taxpayer previously submitted their tax returns via e-filing will no longer be issued tax returns.
Taxpayer who have received their tax returns form but wish to submit their tax returns via e-filling can logging by using pin number printed on their income tax returns.

HOW to file tax returns for the first time via e-filing?
An Individual can obtain their Pin number by visit the nearest IRB office.

Related post:
Income Tax : A Savvy Taxpayer
Income Tax : Forms Printing

Income Tax : A Savvy Taxpayer

There are not many ways to reduce your tax liabilities as an employee, except to maximise your reliefs and rebates, and to deduct minimal allowable expenses from your income.

Reduction of cash remuneration
Cash allowances like allowances for entertainment, housing, car and petrol is taxable at your tax bracket. You may arrange with your HR department and request for your allowances to be on a reimbursable basis.

Introduction to benefits in kind
You may want to negotiate with your employer to provide you with BIK such as a company car and company accommodation, instead of a direct cash allowance for car and accommodation.

Dual employment contract
A dual employment contract means there will be two employment contracts: one with the local employer in respect of duties carried out locally and another with a non-local entity in respect of duties carried out outside the country.

EPF contributions
Most employers only contribute the mandatory 12% of the employee’s monthly salary to EPF. These contributions are tax deductible for the employer and tax exempt for the employee. What an employee can do to reduce his tax liability is to ask for a higher EPF contribution rate from his employer and reduce his monthly salary by the same amount.

Related post : Income Tax : Forms Printing

Income Tax : Forms Printing

Taxpayers are allowed to use the B, BE, M, E, P, TP, TF and TJ statement forms in the PDF format to file their 2007 income tax forms from the LHDNM.

However, Taxpayers who want to print the downloadable PDF format of the income tax statement forms must follow specifications as below:-

• plain A4 paper (210 x 197mm), 80gsm minimum


• in a portrait layout with a laser printer, in pure black or monochrome ink


• single side at 300 dpi

As an alternative, LHDN encourages the public to send in their income tax return forms via the e-Filing system.