Please enable JavaScript.
Coggle requires JavaScript to display documents.
33 Limited Liability Partnership (LLP) - Coggle Diagram
33 Limited Liability Partnership (LLP)
not a Co
partners are
not liable
to pay tax owed by LLP
exempt under Para 12c Sch 6
no need to report in ITRF, no S110
IF LP
unable to settle tax
, ind partners would
NOT be held responsible
for these assessments
Co
directors of Co are
personally liable
to pay tax if they own
>=20% of the pd up capital of the Co
LLP is a
chargeable person
LLP taxed in its
own name
conventional partnership: each partners are taxed on their share of profits
LLP can
enjoy incentives under PIA
(Promotion of Investments Act)
Tax administration
LLP is required to provide
estimate of tax payable (ETP)
no waiver is given to LLP converted from a Co or a partnership
LLP which entitled to 17% tax rate for every 1st RM600,000 of its CI
also
required
to provide ETP
payment by instalments
Tax Treatment
Y from LLP taxed at
LLP level
no requirement to apportion the divisible Y to partners
like conventional partnership
partners of LLP X taxable
LLP has to bear the tax
, as it is a
chargeable person
Remuneration
NOT specified
in LLP agreement
X ded
Specified
in LLP agreement to be pd to the partners
ded
remuneration = basic salary S13(1)(a) + fixed allowance
exclude em'er cont to EPF, SOCSO or insurance
taxable on partners
S13(1)(a) Y, whether ded or not
Distribution of profits to partners
X taxable under Para 12c Sch 6
X withholding tax on pfts pd, credited or distributed to the partners
Conclusion
Partners
X liable to tax on their share of Y from LLP whether distributed or NOT
taxed on
remunerations, perquisites and BIK received
from LLP
as an em'ee
Tax rate
flat rate at 24%
Scale rate
1st RM600k @ 17%
Excess @ 24%
applicable IF
LLP is R
total cap cont (cash/in-kind) <= RM2.5m
gross Y from biz <= RM50m for a BP of YA
NOT applicable IF
more than 50% cap cont (cash/in-kind) is directly/indirectly
cont by a Co
more than 50% pd up ord cap of the Co is directly/indirectly
owned by LLP
more than 50% cap cont (cash/in-kind)
of LLP
AND more than 50% pd up ord cap of the Co is directly/indirectly
owned by another Co
controlled by Another Co which control LLP (>50% cap cot) and Co (>50% ord sh cap) at the same time