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OVERVIEW OF MALAYSIAN TAX SYSTEM - Coggle Diagram
OVERVIEW OF MALAYSIAN TAX SYSTEM
SOURCES OF REVENUE LAW
STATUTE LAW
enacted by parliament
eg: Income Tax Act 1967, Real Property Gains Tax Act 1976, Regulations made under such acts
CASE LAW
unenacted laws created by decisions of courts
used as reference in the interpretation of ITA 1967
INFORMAL LAW - CONCESSIONS
practices of IRB
informal law
INFORMAL LAW - PUBLIC RULINGS
rulings issued by the DG of IRB on interpretation of the provisions of tax laws
ADVANCE RULINGS
taxpayer may request advance rulings from DG
DIRECT & INDIRECT TAXES
SCOPE OF CHARGE - INCOME TAX ACT 1967
income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia
shall not be charged in respect of Labuan entity
taxed on a current year basis
receipts or gains, which are income or revenue in nature would be chargeable to tax
Who is taxed?
a company
a body of people
a corporation sole
an individual
a limited liability partnership
scope of charge
territorial basis
worldscope basis
SOURCES OF INCOME
gains or profits from a
business
gains or profits from an
employment
dividends, interest or discount
rent, royalties or premiums
pension, annuities or other periodical payments
gains or profits not falling under any of the foregoing paragraphs
special classes of income from a NR
amount paid in consideration of services rendered by the person or their employee in connection w the use of property or rights belonging to, or the installation or operation of any plant, machinery or other apparatus purchased from, such person
amounts paid in consideration of any advice given or assistance or services rendered in connection w mgmt or administration of any scientific, industrial or commercial undertaking, venture, project or scheme
rent or other payments, made under any agreement or arrangement for the use of any moveable property
RATES OF INCOME TAX
Chargeable income of a company: flat rate of 24%
SMEs (paid up ordinary share capital of not more than RM2.5m): First RM600,000 at 17% and the balance at 24%
Individual NR: flat rate 30%
Resident individual: scale rates
SELF-ASSESSMENT SYSTEM (SAS)
Taxpayers are required to determine their taxable income, compute their income tax liabilities, submit their income tax return, and pay their income tax liabilities
income tax returns would not be subjected to detailed checking by IRB
penalties would be imposed for non-compliance and/or understatement of income
