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Taxation Services in Malaysia

Taxation Services in Malaysia Like many other countries, Malaysia has its tax system and is a very tax welcoming country. The tax year runs in accordance with the calendar year, beginning on 1 January and ending on 31 December. All tax returns must be completed and returned before 30 April of the following year. Other than personal income tax, there are different types of taxes in Malaysia, namely corporate tax, property tax, consumption tax, and road tax.

Corporate Tax Compliance & Planning Services

Tax is one of the inevitable parts of a business. As such, the cost of improper or inadequate handling of tax issues could be devastating and might restrict the development of a company. Often, the corporation tax compliance involves a large amount of management time, effort, and costs. At 3E Accounting, we provide tailored tax compliance services to meet your business needs, be it an independent tax compliance review, or specific technical advice or a fully outsourced tax compliance service, which will, in turn, allow you to focus more on the core business.

Goods and Services Tax (GST)

Introduced in April 2015, GST (Goods & Services Tax) is the value added tax (VAT) in Malaysia. GST Malaysia of 6% has been implemented to replace the consumption tax comprising the sales tax and the service tax (SST). It is levied on the supply of goods and services at each stage of the supply chain from the supplier up to the retail stage of the distribution. Furthermore, GST is expected to increase tax compliance and it is definitely easier to administer in view of its self-policing method.

Malaysia Certificate of Residence Application (COR)

In Malaysia, a Certificate of Residence (COR) is an official document issued by Inland Revenue Board of Malaysia (IRBM) to confirm that the taxpayer is resident in Malaysia for tax purposes. The issuance of COR is to enable the taxpayer [that is tax residence in Malaysia] to get the benefit of the Double Taxation Agreement (DTA), to avoid being tax twice on the same income by the treaty countries. The validity period of a COR is 12 months from the endorsement date and the application of COR should be made when the current COR has expired, or when there is a request made by the client from the treaty country.

Personal Income Tax

An income tax is a tax imposed on financial income generated by individuals or all entities within their jurisdiction. Every businesses and individual in Malaysia must file their return every year to determine whether they owe any taxes or are eligible for any tax refund. In other words, you are liable to file your return annually if your income is earned or generated from Malaysia. Besides that, income tax is one of the key sources of funds that the government uses to financially support its activities as well as to serve the public.

Withholding Tax Services in Malaysia

Like many other countries, Malaysia imposes withholding taxes on certain payments to non-residents. Withholding tax is an amount that represents the tax portion of an income of a non-resident recipient, withheld by the payer in Malaysia, and it is paid directly to the IRBM. In other words, withholding tax is a mechanism to collect income tax from certain groups of non-residents in Malaysia. Withholding tax will apply to certain payments such as royalty, interest, contract payments, and ‘special classes of income’ made to non-residents.

E-Stamping

In Malaysia, Stamp duty is a tax imposed on documents or written instruments specifies in the First Schedule of Stamp Duty Act 1949. Documents or instruments must be duly stamped within 30 days of its execution if executed within Malaysia. In the case that the instrument is executed outside Malaysia, it must be stamped within 30 days after it has been first received in Malaysia. e-Stamping is a computer-based application and a secured way of paying non-judicial stamp duty to the government. It provides the convenience of stamping documents in a hassle free manner.

Tax Clearance Letter Application

As the name goes, the Tax Clearance Letter (Surat Penyelesaian Cukai, SPC) is a certificate or letter from IRBM that will show any tax owe by a taxpayer. In Malaysia, a taxpayer needs to apply for a Tax Clearance Letter if he or she is retiring, leaving employment at the end of a contract, resigning, terminated from his or her employment, or leaving Malaysia for a period exceeding three months. The salary will be released upon receiving the Tax Clearance Letter from IRBM. In addition, when a taxpayer dies, their next of kin needs to apply Tax Clearance Letter. The Tax Clearance Letter applies to both Malaysians and expatriates or foreign Workers.

Tax Investigation

As the name implies, tax investigation is a method of enforcement conducted by the Inland Revenue Board Malaysia (IRBM) to ensure accuracy of tax filing. The aim of tax investigations is to investigate taxpayers who are suspected to be involved in fraud, wilful defraud or negligence in reporting their income. The Director General of Inland Revenue (DGIR), through Income Tax Act of 1967, has the power to put any taxpayer under “Investigation” and “Tax Audit”. Tax offences such as non-compliance and tax evasion will be charged under the Income Tax Act.

Transfer Pricing in Malaysia

Transfer pricing is a description of the intercompany pricing arrangements that take place for the transfer of goods, services and intangibles between the associated persons involved. Transfer pricing should ideally not be different from the prevailing market price that would be reflected in a transaction between the independent persons involved.

GST Health Check

By engaging professional services, you will be able to Identify the key risks areas, review and analyse the GST risk areas and discuss with your personnel on those areas that are potentially exposed to GST risk. An expert will also be able to conduct face to face meetings at your site and walk through the draft findings with your personnel. Following this, the expect can summarise their findings and recommendations, highlighting all the GST risk areas.

Sales and Services Tax (SST) Service in Malaysia

Under the Service Tax Act 2018 (which takes effect on Sep 1, 2018), Service Tax is a consumption tax levied on taxable services where the rate of service tax stands at 6%.

It is a single-stage tax charged once by the service provider and there will be would be no input or exemption mechanisms available for service tax. The new Sales Tax, on the other hand, stands at 0%, 5%, or 10% respectively.