frequently asked questions_ malaysia income tax 2014.pdf

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Frequently Asked Questions: Malaysia Income Tax 2014Home > Income

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Frequently Asked Questions: Malaysia Income Tax2014

Some of the frequently asked questions in 2014 for income tax in Malaysia! Doingyour taxes for the first time can seem daunting but even for some tax veterans,

filing season passes like a blur. For the complete guide on fil ing your taxes in 2014,

check out the Malaysia Income Tax 2014guide here.

The Malaysia Income Tax 2014 guide has been running for the last 2 years,

naturally there have been plenty of questions coming our way, this FAQ was

designed togive a quickoverview of what the SaveMoney.my Community has been

asking!

Getting Started

1. How much do I have to earn to start paying tax?

If you earned an annual income of RM36,704 (or about RM3,058 per month) or

more in 2013, you have to open a tax file and have to pay taxes. Of course if you

earn below this amount, you can sti ll open a tax file (but you will not be paying any

tax). Why RM36,704? Find out here.

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Published: 26th Mar, 2

Updated: 26th Mar, 2

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2. What documents do I need during the registration process?

You will need to bring:

A copy of the latest Salary Statement (EA/EC) or latest Salary Slip

A copy of Identification card / police i.c. / army i.c. / international passport

A copy of marriage certificate (if applicable)

3. How do I register for a tax file and get my income tax reference number?

You can register at the nearest or any other LHDN branch of your convenience.

Even easier, you can also register online through e-Daftar.

4. I am a foreign national currently working in a Malaysian company . Do I still

have to pay t axes?

In Malaysia, the tax rate payable is on residency status (rather than nationality) so

if your employment results in you staying in Malaysia for 182 days or more, you will

be subject to taxes if you earn above the minimum threshold. You will need to give

notice of your chargeability to the Non-Resident Branch or the nearest IRBM

branch within 2 months of your arrival in Malaysia.

Filing

1. When are the due dates for submitting income t ax returns?

For most of us without additional business income, the due date for the

submission of the Borang BE (Resident of Malaysia) and Borang M (Non-Resident)

is 30th April 2014 for the tax assessment year 2013.

For people with additional business income, the due date for the submission of the

Borang B (Sole Trader, Sdn Bhd and Bhd income) and Borang P (Partnership) is

30th June 2014 for the tax assessment year 2013.

2. My employer deducts my salary every month to pay tax via the MTD/PCB

system, do I still need to file my tax ret urn?

The MTD/PCB system is where your employer uses your annual salary, marital

status and number of children to estimate how much tax you will be paying based

on those 3 factors and then pays LHDN on your behalf every month. As your

employer has no idea of what tax reliefs you might be able to claim (by buying

sports equipment, investing in a PRS Fund, saving in an SSPN account and so many

more), they may have been overpaying on your behalf and you should definitely file

your tax return to claim back that tax!

Alternatively, you could be earning outside income (property rental, dividends from

share investments etc.), which the PCB system does not take into account, and your

employer may have been underpaying your tax, causing you to be liable for more

income tax.

3. Should my spouse and I file in our taxes together or separately?

This really depends but the general rule is that if you and your spouse both earn

above the threshold to pay taxes then its best to file it separately. If one of you

earns much less than that or none at all, then you can consider file your taxestogether in a joint assessment.

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Reliefs and Rebates

1. What are the ty pes of tax relief and rebates can I claim?

You can refer to Malaysia Income Tax Guide 2014to a list of tax relief and rebates

available in Malaysia for 2014. Theres plenty!

2. Is Life Insurance also a t ax relief?

Yes it is. Despite the constant confusion whether life insurance is also accounted

for, it has been listed under the tax relief category. For most taxpayers, the

maximum relief for EPF and Life Insurance (lumped in together) is RM6,000, so if

you earn over RM4,550 a month or so you may not have any relief left even if you

have paid for life insurance during the year.

3. Can I claim a tax relief on my t ablet device?

While the purchase of personal computers and laptops are a tax relief (RM3,000

once every 3 years), LHDN has clarified that for Assessment Year 2013, tablet

devices are not included.

4. Can I still claim for tax relief for children if my wife is still pregnant during t he

tax season?

No, the relief for children does not encompass unborn foetuses.

Tax Payment and Refunds

1. How do I pay for my taxes or any other fees that involve taxes?

You can pay for your income tax for the year by most local/foreign banks online

banking channels, including Maybank, CIMB, Public Bank, RHB Bank etc. If yourbanks online banking system does not allow you to select LHDN as a payee, or you

are paying from overseas, you can still set up an IBG (Interbank GIRO) or TT to the

following bank account (be sure to include all your tax file number details and

references):

SWIFT Code (for Overseas and RENTAS): CIBBMYKL

Bank Account Number: 14230003355052

Beneficiary (Payable to): Ketua Pengarah Hasil Dalam Negeri

Name and address of the bank: CIMB Bank Berhad, Cawangan Jalan Duta Tingkat Bawah, Blok

8, Kompleks Pejabat Kerajaan, 50480 Jalan Duta, Kuala Lumpur, Malaysia

If you wish to do it the old fashioned way you can stil l walk into the following majorbanks or financial institutions in Malaysia and pay by cheque or cash:

CIMB Bank

Public Bank

Maybank

POS Malaysia

Affin Bank

Bank Rakyat

RHB Bank

2. If my salary increases, do I effectively earn less because I pay a h igher tax

rate?
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, ,happen. That means that if you earn more and hit a higher tax bracket, only the

amount above the bracket gets charged with a higher tax rate (and not

your whole salary). There are 2 main exceptions in 2014 though, due to the RM400

tax rebate and RM2,000 special relief, there may be rare cases (around RM50,000

annual salary and RM96,000 annual salary) where earning a little more may result

in not being eligible for the rebate/relief and causing a small jump in tax payable.

3. I didnt submit my tax return last year even though I should have. Whats

going to happen to me when I do it t his year?

Tax evasion is a serious offence and if you are found guilty; it could cost youanywhere between RM1,000 RM20,000 in fines or worse; a prison sentence. If

youve unwittingly missed a tax year; get in touch with LHDN to sort it out. Youll

probably have to pay a penalty on top of the taxes you owe but it would be a lot

better than being hauled up to court for tax evasion.

4. What kind of penalty would I receive for not pay ing my taxes before the due

date?

A late payment penalty of 10% will be imposed on the balance of tax not paid after

30th April 2014 for most individuals. If the tax and penalty imposed is not paid

within 60 days from the date the penalty is imposed, a further penalty of 5% will be

imposed on the amount stil l owing.

5. How do I claim for a tax refund?

The refund should automatically be credited into your account. But if you do not

receive your refund, you can forward your application to the Collections Unit from

the branch where your file is located. Or you can complete and submit via our

Feedback Form http://www.hasil.gov.my/smp/ or by calling this toll free number 1-

800-88-5436 (LHDN).

You can also use your tax credit to offset your current year balance of tax.

More Questions? Ask in our comments section below!

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LuvMints:

am retired but I have some shares which generates handsome dividend. Should I submit HK3?.

Your advise would be very much appreciated. Thank you.

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