The last day to submit Individual Income Tax is 30 April 2010 and I hope you have using online e-Filling system to submit the e-BE form on time so the Inland Revenue Board of Malaysia (LHDN) will not chase after you later on due to late submission.
Before submitting the efilling income tax, do you know what is 2009 Income Tax Rates for Malaysia? Do you encounter any problems when filling up the e-filling form? Do you know how to file deduction claim and the most important thing will be how to pay less personal income tax?
Actually, we can spend some time to read on Income Tax Help or Income Tax Questions and Answers (FAQ) from LHDN website. I found out that some FAQ and income tax help are useful on saving tax that would ensure you not getting into trouble with the Income Tax laws. So, please read on below Income Tax Questions and Answers below which I think will help you in paying income tax.
Malaysia Income Tax Exemptions:
Leave passage within Malaysia not exceeding three times in a year and one leave passage outside Malaysia not exceeding RM3000.
Medical and dental benefit
With effect from the year of assessment 2008, medical benefits exempted from tax is expanded to include maternity expenses and traditional medicine like ayurvedic and acupuncture without limit.
The full amount of gratuity received by an employee on retirement from employment is exempt if:
i. The Director General of Inland Revenue is satisfied that the retirement is due to ill health;
ii. Retirement on or after reaching the age of 55 years/compulsory age of retirement and the individual has worked 10 years continuously with the same employer or companies within the same group
iii. The retirement takes place on reaching the compulsory age of retirement pursuant to a contract of employment or collective agreement at the age of 50 but before 55 and that employment has lasted for 10 years with the same employer or with companies in the same group.
Gratuity paid out of public funds
Gratuity paid out of public funds on retirement from an employment under any written law.
Gratuity paid to a contract officer
Gratuity paid out of public funds to a contract officer on termination of a contract of employment regardless of whether the contract is renewed or not.
Compensation for Loss of Employment
This is payment made by an employer to his employee as compensation for loss of employment either before or after the date of termination. This compensation is exempted from tax.
If compensation received is due to ill health
Compensation received in other cases:
Termination before 1st July 2008 – exemption of RM6000 for every completed year of service with the same employer or with companies in the same group
Termination on or after 1st July 2008 – exemption of RM10000 for every completed year of service with the same employer or with companies in the same group
Compensation received by a director (not service director) of a Control Company is fully taxable.
Pensions received by an individual are exempt under the following conditions:
He retires at the age of 55 or at the compulsory age of retirement under any written law; or
If the retirement is due to ill health and the pension is received from the government or from an approved pension scheme.
For an employee in the public sector who elects for optional retirement, his pension will be taxed until he attains the age of 55 or the compulsory age of retirement under any written law. Where an individual receives more than one pension, the exemption is restricted to the highest pension received.
Monies received as death gratuity is fully exempted from income tax.
Any monies paid by way of scholarship to an individual whether or not in connection with an employment of that individual is exempted from income tax.
Income of an individual resident in Malaysia in respect of his appearances in cultural performances approved by the Minister
Money received under this category is exempted from tax on condition it is approved by the Minister.
Income in respect of interest received by individuals resident in Malaysia from money deposited with the following institutions is tax exempt with effect from 30 August 2008:
A bank or a finance company licensed or deemed to be licensed under the Banking and Financial Institutions Act 1989;
A bank licensed under the Islamic Banking Act 1983;
A development financial institution prescribed under the Development Financial Institutions Act 2002;
The Lembaga Tabung Haji established under the Tabung Haji Act 1995;
The Malaysia Building Society Berhad incorporated under the Companies Act 1965;
The Borneo Housing Finance Berhad incorporated under the Companies Act 1965.
The following dividends are exempt form tax:
Dividends received from exempt accounts of companies.
Dividends received from co-operative societies.
Dividends received from a unit trust approved by the Minister of Finance such as Amanah Saham Bumiputra.
Dividends received from a unit trust approved by the Minister of Finance where 90% or more of the investment is in government securities.
Royalties received in respect of the use of copyrights/patents are taxable if they exceed the following exemption limits:
Types of Royalty
1 Publication of artistic works/recording discs/tapes
2 Translation of books/literary works of Education or Attomey or General Chambers
3 Publication of literary works/original paintings/musical compositions
Income Remitted from Outside Malaysia
With effect from the year of assessment 2004, income derived from outside Malaysia and received in Malaysia by resident individual is exempted from tax.
Fees or Honorarium for Expert Services
With effect from the year of assessment 2004, fees or honorarium received by an individual in respect of services provided for purposes of validation, moderation or accreditation of franchised education programmes in higher educational institutions is exempted.
The services provided by an individual concerned have to be verified and acknowledged by the Malaysian Qualifications Agency (MQA). However, the exemption does not apply if the payment received forms part of his emoluments in the exercise of his official duties.
Income Derived from Research Findings
With effect from the year of assessment 2004, income received by an individual from the commercialization of the scientific research finding is given tax exemption of 50% on the statutory income in the basis year for a year of assessment for 5 years from the date the payment is made.
The individual scientist who received the said payment must be a citizen and a resident in Malaysia. The commercialized research findings must be verified by the Ministry of Science, Technology and Environment.
Malaysia Income Tax Questions and Answers:
REQUEST FOR TAX RETURN
Q : I have not received my Income Tax Return Form. How do I obtain a copy of the said form?
A : Contact the Assessment Branch where your income tax file is registered or the nearest Inland Revenue office and request for the relevant forms.
TRANSFER OF FILE
Q : I have changed my place of work from Kuantan and I am currently working in Shah Alam but my income tax file is at the Inland Revenue Branch in Kuantan. Can my income tax file be transferred to Shah Alam?
A : You may by way of telephone or letter to the Inland Revenue Branch Kuantan request for your tax file to be transfered to the Inland Revenue Branch Shah Alam. You have to inform the new Branch (in this case the Shah Alam branch) of any future change of address.
Q : Can I make a claim on medical expenses expended on myself ?
A : You may claim medical expenses for serious diseases expended on you, your spouse or child up to a maximum of RM 5,000.00 a year and medical expenses for parents up to a maximum of RM 5,000.00 a year. Such a claim must be supported by original receipts issued by a medical practitioner.
SCHEDULAR TAX DEDUCTION (STD)
Q : My employer has been making Schedular Tax Deductions ( STD or PCB as it is more commonly known ) from January up to December 2001. I have received my Form J (Notice of Assessment) in May 2001 and the tax payable is RM 1,200.00. Do I have to settle the tax raised ? The STD deduction from January – December 2001 totalled RM 1,000.00.
A : If you are in the payment scheme under STD, you do not have to pay the tax separately. In this case, you only have to pay the balance RM 200.00.
TO STOP STD DEDUCTION
Q : According to my calculation, I am not liable to tax for the year of Assessment 2001. What should I do to enable my employer to stop / cancel my deductions under STD?
A : You may contact the Assessment Branch directly for confirmation of your non-liability, then inform the Collections Branch and request the issuance of a letter to your employer to stop the STD deductions.
STD DEDUCTIONS ARE TOO LOW
Q : My monthly STD deductions are too low compared to the actual tax payable (according to the Form J). How can I increase my deductions to settle the tax payable?
A : You can request your employer to increase your monthly deductions to settle the tax payable. Employers do not have to wait for instructions from the Collections Branch to increase monthly deductions for purposes of paying tax.
STD DEDUCTIONS ARE IN EXCESS
Q : My monthly deductions are in excess of the total tax assessed. How do I apply to cancel further monthly deductions and also obtain my over payment of tax?
A : You can contact the Collections Branch directly to obtain a letter to stop the deductions. You can apply for a refund of your credit on condition that all assessments have been finalised to-date.
Q : Is there a limit to the number of children entitled to child relief under the Income Tax Act?
A : There is no limit to the number of children, but relief will only be given for any dependent unmarried child who at the time is:
below 18 years of age;
if above 18 years of age, was in receipt of full time education or is under articleship or indenture in trade or profession; or
is physically or mentally disabled (relief for physically or mentally disabled child is RM 5,000.00).
Q : I am going to retire from civil service, how do I obtain my income tax clearance certificate?
A : You can contact the Assessment Branch where your income tax file is registered and bring along your Form CP 22 B (Notice of Cessation of Employment) that has been completed by your employer. Please ensure that your employer forwards the Form CP 22 B to the relevant IRB Assessment Branch, 6 months before your retirement.
BI-MONTHLY INSTALMENT SCHEME
Q : I run a provision shop and from time to time sell provisions at the night market. Can I pay my income tax through the Scheduler Tax Deduction (STD) scheme?
A : No, the STD is strictly for person (s) under employment contract only. If you are in business or self -employed, you can pay your tax through the bi-monthly installment payment scheme. If you are not in the installment scheme, you have to settle your tax within 30 days from the date on the Notice of Assessment (Form J).
PENALTY ON LATE LODGEMENT OF RETURN FORM
Q : Would a penalty be imposed if I delay the submission of my return form?
A : Yes, a penalty will be imposed if here is a delay in the submission. All return forms must be submitted within 30 days from the date stated on the form or a period that has been stipulated.
ZAKAT / FITRAH REBATE
Q : If I pay zakat or fitrah (religious tithes), can I make a claim of set-off against the tax payable?
A : Yes, you can if you are a Muslim. You have to forward the original receipts to substantiate your claim. The receipts must be in the name of the taxpayer.
DEDUCTION FOR DONATION
Q : If I make a donation to the Masjid Fund, can I make a claim for deduction from my tax?
A : You can make a claim for deduction for the donation made but the donation must be made to a body or fund approved by the Director General. Usually the approval (gazette notification) will be stated on the receipt. You have to forward the original receipt with your Form B for the relevant year of assessment.
Payment of Tax
Q1 : What is STD / PCB?
A1 : Schedular Tax Deduction (STD or PCB) which was introduced in 1st January 1995, is a system of tax recovery where employers make deductions from their employees’ remuneration every month in accordance with a Schedule. This is mandatory, in that neither the employer nor employee has any choice in the matter. Any deviation from the requirements of the Income Tax (Deduction from Remuneration) Rules 1994 can only be upon written authorization from the Board.
Q2 : How does STD differ from CP38 deduction?
A2 : As explained in above, STD is an automatic deduction made every month, while CP 38 deduction arise only when the Board issues a specific direction to the employer requiring him to make deductions of certain amounts for specified months. Such CP 38 deductions are generally towards settlement of outstanding taxes while STD is on current income (PAY AS YOU EARN)
Q3 : Can STD be remitted through tapes or diskettes?
A3 : This form of remitting STD is allowed; in fact employers having more than 20 employees are encouraged to submit their STD payments through tapes or diskettes because in this way, processing can be achieved faster and there would be no mistakes in transcribing the details into IRB’s computer system.
However, whatever mode of remittance that may be used, employers are reminded that they should furnish complete and accurate particulars of all employees so as to avoid delay in crediting the deductions to the respective individual accounts.
Q4 : What are the payments liable to STD?
A4 : STD is due only on employment income, i.e., on remuneration that arises from a master servant relationship, and this includes all payment other than benefits-in-kind [Section 13(1)(b)], accommodation benefits [Section 13(1)(c)] and reimbursements. Employment income subject to STD includes salary, wages, commission, overtime, allowances, director’ fees, tips and bonuses arising out of exercising the employment. The employer adds up such income, subtracts the employee’s EPF contribution (subject to a maximum of RM416. per month or RM 5000 per year), and deducts the STD in accordance with the relevant category in the Schedule that the employee comes under. However, where the payment is bonus or other lump sum amount, a special formula has to be adopted to determine the STD.
Q5 : Please explain how Form CP159 is to be completed?
A5 : The Form CP 159 issued to employers forms part of the Form E and the employer is required to show in it details of remuneration and deduction made in each month of the relevant year. The Form CP 159 is a statement of fact; it shows, among other things, the total remuneration paid and the STD deducted therefrom in each of the given months notwithstanding the basis year to which the payment refers. E.g. Bonus for 2000 is paid in February 2001. This will not feature in the CP 159 for 2000 in spite of being payable for 2000. It will only be stated in the CP 159 for 2001, as it was actually paid in 2001.
THE FORM CP 159 IS TO BE COMPLETED IN DUPLICATE.
[Refer to Statement Of Tax Deductions Under Income Tax (Deduction From Remuneration) Rules 1994 - Form CP159]
Q6 : How to calculate the STD for director’s fees?
A6 : In cases where the Director’s Fees is paid monthly together with other monthly remuneration, both the relevant amounts must be added together in order to determine the STD.
For cases where only Director’s Fees is paid monthly, the STD is determined in the usual manner.
Where a director is paid a monthly remuneration and he receives Director’s Fees in a lump sum, the STD is calculated by using the Bonus Formula.
In instances where the director receives only Director’s Fees and paid in a lump sum, the relevant amount is divided by the number of months for which the payment relates. STD is determined accordingly and then multiplied by the number of months in question. E.g. A director receives annual Director’s Fee of RM36,000.00, without any other remuneration. Therefore the amount applicable per month is RM3,000.00 (RM36,000.00 / 12). The STD for RM3,000 is determined and then multiplied by 12.
Q7 : How to deduct STD if the reference number of the employee is not known?
A7 : Contact the nearest Inland Revenue branch to check for the tax reference number. If that employee does have a tax reference number, action must be taken to register a tax file.
Q8 : What reference number should be used if the employee has two or more reference number as, for example, in the case of a married woman?
A8 : In the case of a married women, quote the husband’s reference number but ensure that the wife’s code is stated. For other cases, contact the nearest IRB branch for assistance.
Q9 : An over-deduction has been deducted in respect of an employee for a particular month. Will a refund of the excess amount be made to the employee?
A9 : No. As the monthly deduction is made from the employee’s remuneration, any refund will accrue to the employee in question.
Q10 : Remittance of an amount in excess of that stated in the deduction table has been discovered? Can an adjustment be made in the following month’s deduction?
A10 : An adjustment is acceptable provided a covering letter explaining the position is sent together with the adjusted deduction. Adjustments are not allowed for different years, for example, an error relating to the deduction in December 1999 cannot be rectified by an adjustment in the deduction made in January 2000. It is advised that you seek assistance from the nearest IRB Branch before making any adjustments.
Q11 : An employee is about to cease working. Are tax deductions still required?
A11 : Yes. In addition to complying with the monthly tax deduction, the following must also be complied with if that employee is known to be retiring from employment:
All monies due to the employee must be withheld.
A notification of cessation through Form CP 22A (Form CP 22B for employees in the public sector) must be immediately forwarded to the relevant Inland Revenue Assessment Branch.
The correct amount of tax to be paid (if any) must be remitted to the Inland Revenue immediately upon receipt of the certificate of tax clearance.
Q12 : An employee has income from other employment sources too. How should his tax deduction be calculated?
A12 : An employer is required to deduct tax only in respect of the remuneration paid by him to his employee. The other employers of the employee will be responsible for making the necessary deductions on the remuneration they pay.
Q13 : An employee wants tax to be deducted at higher amount than that determined by the table. Can this be complied with?
A13 : An employee’s actual tax liability may be higher than the total amount of his deductions because of income from other sources. Higher deductions can be made if the employee so requests.
Q14 : Will tax deductions be applicable to an employee who makes zakat payments?
A14 : Where an employee pays zakat through monthly deduction from his salary, the employer may off-set such zakat payments against the amount of tax deduction for the respective month.
However if zakat is paid in other manner, the employee concerned should contact the IRB branch which handles his tax file for further assistance.
Q15 : Will tax deductions be applicable to an employee who is entitled to a refund after taking into account tax deducted at source from dividend income?
A15 : Tax deductions are applicable. However, the employee concerned may contact the Inland Revenue office which handles his tax file for assistance.
Q16 : If a direction to employer to deduct tax (Form CP38) is received by the employer in respect of one of his employees, will the employer still have to deduct tax under the schedular tax deduction scheme?
A16 : Yes, the Direction To Employer To Deduct Tax (Form CP 38) will be issued for the purpose of recovering outstanding tax only.
Q17 : If a taxpayer, on receiving his form J, Finds that his STD deductions are insufficient to cover the total tax payable, what should he do?
A17 : He should pay the difference within 30 days from the date of Notice of Assessment.
FAQ ON FORM M
Q1 If I have not received my Form M, how can I get a copy?
A1 i) You can get a copy of the Form M from any of the nearest IRBM branches; or
ii) You may use our e-filing facility for online submission. Please visit our website at www.hasil.gov.my for more information on e-filing.
Q2 Can I used a photostat copy of the Form M to fill and submit?
A2 No, you cannot because it is not a prescribed form.
Q3 I received two Form M for the same Year of Assessment under different reference numbers. Which one should I complete?
A3 You are advised to call us at Tel No. 603-42893500 or e-mail us at [email protected] to confirm your correct reference number.
Q4 If my Form M will be processed at the Processing Centre, Pandan Indah, does it mean that my income tax file has been transferred to
the Processing Centre, Pandan Indah?
A4 No, your income tax file will still be maintained at your previous Branch. Only the Form M will be sent to the Processing Centre, Pandan Indah.
Q5 If I made a mistake when filling my Form M can I rectify using a correction pen?
A5 You are not allowed to use the correction pen. However, you can cancel it by drawing a line across the mistake and writing again the correct details and making a brief initial on each correction made.
Q6 What is a Public Ruling? What is the implication if I choose 1 or 2?
A6 The Public Ruling is issued to provide guidance for the public and officers of the Inland Revenue Board. It sets out the interpretation of the Director General of Inland Revenue in respect of the particular
tax law, and the policy and procedure that are to be applied. You may view the Public Ruling at the website http://www.hasil.gov.my. If one or more Public Rulings are not complied with please choose no 2.
Q7 Will I be penalised for the late submission of the Return Form?
A7 Yes. You will be penalised under Section 112(3) of the Income Tax Act 1967.
Q8 Since no Form J will be issued under the Self Assessment System, how will I know if my tax has been correctly assessed?
A8 If you have doubts or inquiries kindly e-mail us at [email protected] or call us at 603-42893500 before submission of your Return Form.
Q9 Why do I need to keep my records for 7 years? I operate my business from my house and I do not have enough space to store them.
A9 It is a requirement under Section 82(1)(a) of the Income Tax Act 1967.
Q10 Must I use the working sheets provided in the guidebook for preparation of my accounts? Will I be penalised if I don?t?
A10 No. The working sheets are just a guideline for preparation of your accounts and keeping your records.
Q11 Can I fill Form M with just the personal details and sign the form ?
A11 If you derived income from Malaysia, your Form would be deemed incomplete and will be returned to you for completion. Under the Self Assessment System you do not need to attach any statements,
receipts etc. You would have to complete all the relevant items and compute your taxes. However, if you did not derive any income from Malaysia in the said year, you have to complete your personal particulars and put ?? in the relevant column sign the form and return it to us.
Q12 I find the Form M too complicated. As such I am not sure if my calculations are correct. What should I do?
A12 Please call us at 603-42893500 or e-mail us at [email protected] for assistance or please refer to the Form M Guidebook or Explanatory Notes.
Q13 How do I get the country code?
A13 The Country code is available in the Form M Guidebook under Appendix E.
Q14 I submitted my Form M to Processing Centre, Pandan Indah without my signature. Will my Form M be processed?
A14 The Form will be considered as incomplete and will not be processed. You are advised to complete and send in a new Form M with your signature. Penalty for late submission will also be imposed
under Section 112(3) of the Income Tax Act,1967 if the IRB receives it after the due date.
Q15 I am 80 years of age, do I need to continue filing the Income Tax Return Form?
A15 The main criteria for filing the From M would be whether you have any income from Malaysia and it is irrespective of your age.
Q16 I have received a copy of the Form M for 2009 but I have not received any income from Malaysia. Do I need to fill the Form. Do I have to declare income derived from Singapore and submit the Notice of Assessment from the Singapore Tax Authorities?
A16 Since you have received the Form M for 2009, you would have to complete it whether or not you have derived any income from Malaysia. Income that has not been derived from Malaysia need not
be declared in the Form M. You do not have to submit any documents from the Singapore Tax Authorities.
Q17 Where do I send the Form M 2009?
A17 Please send your completed Form M to the address below:
Inland Revenue Board Malaysia
Level 10-18, Menara C
Persiaran MPAJ, Jalan Pandan Utama
Pandan Indah, P. O. Box 11096
50990 Kuala Lumpur, Malaysia
Q18 I am not sure which Income Tax Form I have to complete. My husband is a Malaysian but has been working in Brunei for many years. He has received a Form M 2009 and I have not received any
Income Tax Form to declare my income.
A18 Non residents for tax purposes are to fill in the Form M for the Year Assessment 2007. Residents for tax purposes are to fill Form BE (if there is no business income) or B (if there is business income).
Please refer the Public Ruling No. 2/2005 on the determination of resident status. If you qualify as a tax resident, obtained a copy of the Form BE or B from our nearest IRBM Branch or you are encouraged to use our e-filing facility for online submission. Please visit the IRBM website at www.hasil.gov.my for further information on e-filing.
Q19 When do I have to submit the Form M 2009?
A19 If you did not derive any business or partnership income in 2009 , ensure that the Form M is submitted by 30 April 2010. If you had derived business income the due date for submission is 30 June 2010.
Q20 My wife and I are both non-resident taxpayers. Should we elect for separate or combined assessment?
A20 Both of you are non residents of Malaysia. For tax purposes, it makes no difference whether you elect for separate or combined assessment as the tax rate for non residents is at a flat rate of 27%.
Q21 I understand that as British citizens and being Hong Kong residents we are not eligible to elect for combined assessment, and that separate forms for both me and my wife must be submitted ?is this
A21 Under the Self Assessment System, husband and wife are to complete separate Income Tax Forms if each derived income from Malaysia. If your wife was not sent a Form M, obtained a copy of the Form from our nearest IRBM Branch or you are encouraged to use our e-filing facility for online submission. Please visit the IRBM website at www.hasil.gov.my for further information on e-filing.
Q22 My period of stay in Malaysia was and will be as follows: How do I determine my resident status for the Year of Assessment 2008 and 2009?
25.07.2008 to 22.12.2008 In Malaysia 51 days
23.12.2008 to 31.12.2008 Not in Malaysia 9 days
01.01.2009 to 03.01.2009 Not in Malaysia 3 days
04.01.2009 to 01.07.2009 In Malaysia 179 days
A22 You can be considered a tax resident for Year of Assessment 2008 if the period of less than 182 days in 2008 is linked to a period of I82 days or more consecutive days in 2009. The temporary absence from 23.12.2008 to 3.1.2009 forms part of the qualifying period to link the 2 periods. Therefore you can be considered a tax resident of Malaysia for the Year of Assessment 2008 on 2.7.2009. In the Year of Assessment 2009 since you are only physically present in Malaysia for only 179 days you are not considered a tax resident of Malaysia unless you extend your stay to 5.7.2009.
Q23 At the time (April 2008) of filing the Income Tax Form, I thought I was a resident. Today (June 2008), I realised that I am still a non resident. I have filed the Form B 2007. What do I have to do now? Will there be a penalty?
A23 You are advised to send a letter to the Non Resident Branch explaining that you had made a mistake in determining your resident status. Your assessment will be reviewed and the necessary assessment will be raised.
Q24 How do I confirm that my Form M has been received by IRBM. I am worried and do not want to be penalised?
A24 If you have an acknowledgement stamp on the Form M 2009 that was submitted at any of IRBM?s branches you need not worry. If you had posted it from overseas, please keep a copy of the proof of postage.If you need to contact the Processing Centre, you may send an email to [email protected] call us at 603-42893500.
Q25 I would like to know when I would receive my Form J as I need to know the amount of tax I have to pay?
A25 Under the Self Assessment System, no Notice of Assessment (Form J) will be issued to taxpayers. Taxpayers are expected to compute their own tax payable in the Income Tax Form submitted to IRBM. The DGIR is deemed to have made an assessment based on the tax computation furnished in the Income Tax Form. The Income Tax Form is deemed to be a Notice of Assessment. The date of filing the Income Tax Form is deemed to be the date on which the Notice of Assessment is served on the individual.
Q26 Can you grant me a grace period of up to 05.07.2010? I will send the Form M 2009 on 06.07.2010. This is the first time I am filling up this Form and I had forgotten about this matter only until last week ?
A26 All Income Tax Forms must be submitted:
By 30.4.2010 if no business income was derived in the year 2009 by
an individual; or
By 30.6.2010 if business income was derived by an individual in the
No grace period will be granted. You are advised to submit the Form
M 2009 as soon as possible together with the payment.
Q27 After I have submitted my Form M, I realised that there are some errors in my Return and amendments to my accounts. Do I need to submit another Form M?
A27 Please take note that the Form M can only be done once. To make the correction on the form please follow the procedures as stated below:
(a) Print out the submitted form and do the correction on the particular page/column (please initial besides the correction made) and calculate the new amended tax payable;
(b) A letter stating the errors/omission made and
(c) submit the amended form together with the letter to the IRB branch where your file is maintained.
Q28 Why should we submit the M forms to the Processing Centre, Pandan Indah only ?
A28 Under the Self Assessment System all Return Forms will be processed at the Processing Centre, Pandan Indah.
Q29 Do we need to write OG/SG on every page where the file reference number is required?
A29 No . You only need to fill in the numbers.
Q30 What will be the action taken by IRBM if they found that income declared in the return form is understated?
A30 Additional assessment will be raised with penalty under Section 113(2), Income Tax Act 1967. The rate of penalty is posted in the IRBM website at http://www.hasil.gov.my.
QUESTIONS PERTAINING TO FILLING OF FORM M
Q31 I am a Singaporean with a Singaporean passport. Where do I fill my particulars?
A31 Please fill your passport no. in item 7 (Current Passport No) of page 1. All information as per pages 1 & 2 are to be furnished.
PART A : PARTICULARS OF INDIVIDUAL
Q32 I have a business in Singapore, do I fill in the address of business premise in item A11? I also do not have a bank account in Malaysia, do I have to fill in the bank account no. in item A16?
A32 A11 relates to business in Malaysia. In fact you are only required to furnish income derived from Malaysia in the From M 2009. A16 is only relevant if you have a bank account in Malaysia.
Q33 As a non-resident, and not being employed in Malaysia it seems to me that completion of item A11 to A18 is not appropriate ?is my interpretation correct?
A33 Yes, you are only required to fill up the particulars in item A12 and A14 of page 2 Form M 2009 if it is applicable to you.
PART B : PARTICULARS OF HUSBAND / WIFE
Q34 My wife is not a Malaysian, do I need to complete Part B?
A34 Part B has to be completed by you even though your wife is not a Malaysian.
Q35 My husband is a Singaporean. He does not have any income in Malaysia. He is retired. Do I need to fill in B1 – B 10?
PART C : STATUTORY INCOME AND TOTAL INCOME
Q36 My wife has elected for a combined assessment under my name. Which item is applicable to both of us?
A36 If your wife elect for a combined assessment, in her Form M 2009 she should complete her form up to C34 and sign the form. In your Form M 2009, you are to complete the Form in full. Transfer
your wife?s income to C35 and determine whether it is a business income or without business income. Total C34 and C35 to get aggregate total income (husband and wife). Please note that under Section 45(2) of the Income Tax Act 1967, a husband / wife who is not resident in Malaysia may elect only if :-
a) He or she who elects is a Malaysian Citizen and has total income;
b) The spouse in whose name the combined assessment is to be raised has total income; and
c) Both husband and wife mere living together and did not cease to live together in the basis year for a year of assessment.
If your wife elects for a combined assessment in your name then she has to fill in her form until total income (self), that is C34.
Q37 I have made some donations and I am not certain if I can claim them?
A37 You can make a claim for deduction for the donation made but the donation must be made to a body or fund approved by the Director General. Usually the approval (gazette notification) will be stated on
the receipt. You can call us at 603-42893500 or e-mail us at [email protected] for confirmation
Q38 If I made some donation to an organisation, how will I know if that donation is approved by IRBM?
A38 Ensure that the receipt is printed with IRBM approval under Section 44(6) of the Income Tax Act, 1967. If it is not printed on the receipt, check with the organisation whether if approval has been given.
Q39 I have purchased a house in JB but it has been vacant since completion. Where can I claim the bank loan interest in the Form M 2009?
A39 As the house purchased by you in JB is vacant you are not entitled to claim deduction on the bank loan interest.
Q40 My only source of income is rental. Do I have to complete HK4 and submit it together with the Form M ? Do I have to attach the receipt for quit rent, assessment, repair bills etc?
A40 Yes you would have to complete HK4. Do not send HK4 and any documents together with the Form M 2009. Just keep your documents until we request for it later when an audit is done . You are required to retain all the documents for a period of 7 years.
Q41 I received rental income from Malaysia. Please let me know which section of the Form M 2009 I should complete?
A41 Please fill the net rental income in the item C 13.
Q42 I receive director fees. Where do I declare this amount?
A42 Director’s fee is to be entered into C10.
Q43 I have sold my property in Malaysia in 2009. Do I have to complete the Form M 2009?
A43 If you are in receipt of rental income prior to the sale, you are to declare it. However if there was no rental income derived in 2009, you are to enter a ??in item C13 of the Form M 2009.
Q44 My husband does not have an income tax reference number. The property is registered in both our names. We are both living in Canada. Does he have to register an income tax file?
A44 Since your husband does not have a tax reference number, the full rental income for 2009 can be declared under your name and the assessment can be made in your name. However if your husband
has other sources of income from Malaysia in the year 2009, then he has to get a file registered and his share of the rental income should be declared under his name.
Q45 What are the expenses that can be claimed against the rental income?
A45 Example of allowable expenses:
Assessment and Quit rent
Insurance premium ?fire /burglary
Bank loan interest
Cost of repairs & replacement
Cost of obtaining tenant to replace the old tenant
Cost of renewal rental agreement
Service charges & maintenance (condominiums & apartments)
Industrial Building Allowance can be claimed if the property
qualifies as an industrial building.
Rental collection .
Example of non allowable expenses :
Cost of obtaining the first tenant (advertising, commission paid to a property agent, legal expenses on first rental agreement)
Renovation ?rebuilding, reconstructing & improvement
Installation of electrical items ?air conditioners, water heater, etc?
Capital payment of loan
Capital Allowance (where rental is not considered a business source for individuals).
Q46 Two payments of rent for November and December 2009 were paid late by the tenant of the property in March 2010. Should the due in 2009 be declared as of the date due rather than as of the date
A46 November and December 2009 rental income should be declared for the year ended 31 December 2009.
Q47 I wish to claim for the non-resident relief under Section 130. Please let me know how I should go about calculating the relief?
A47 From your e-mail, I assume that you are in the Malaysian Civil Service and have been posted abroad. Since you had to exercise your employment outside Malaysian in the public services, you are entitled to claim non resident relief under Section 130 of the Income Tax Act 1967 if you are a non resident for tax purposes.
Complete the Form M 2009 as required and claim for the non resident relief under item D8. To work out the non resident relief please refer to the working sheet HK7 found in the Form M Guidebook
- Sources and amount of income from Malaysia & outside Malaysia. (Employment – gross, rental – net gain)
- number of children below 18yrs. / above 18 and studying at tertiary level.
- EPF / life insurance premiums / medical insurance premiums
- Books purchased – amount as per receipt
- Other claims ?refer to working sheet HK7
Child relief is RM1000 per child
Studying at local University. – Claim 1000 X 4 = 4000 per child
Studying at foreign University – Claim 1000 X 4 = 4000 per child ( for degree courses and above)
Please take note that non resident taxpayers are not entitled to any personal reliefs. Only Non-Resident government servant taxpayers in the government service or statutory body in Malaysia are entitled to
claim under Section 130. When working out the non-resident relief, personal reliefs are allowed.
Q48 In Part L, do I have to fill up row L11 if I have already filled up C13?
My only source of income is from rental of private residential property.
A48 Part L is only applicable if you derive business income from Malaysia and have included the rental income in your Profit & Loss accounts.
Q49 Is it necessary for me to obtain the services of a tax agent to complete the Form M?
A49 It is not necessary to obtain the services of a tax agent if you are able to complete the Form M yourself. You are required to fill the Form by using the Explanatory Notes & Guidebook as a guideline. Please ensure that you declare income derived from all sources in Malaysia, work out the tax payable and sign the Form.
Q50 In previous years the form had to be declared before a Notary Public or consular official before submission. It is not clear to me from the form whether this is still the case or not. Please confirm whether
declaration before a consular official is still required?
Q50 The declaration on page 10 is to be signed by you. It need not be signed before a notary public etc.
Q51 Where do I send my payment to?
A51 Payment is to be sent separately using the payment slip CP501 (Pin.1/2009) attached to the Form M 2009. Kindly send the payment to :
Lembaga Hasil Dalam Negeri Malaysia
Cawangan Pungutan, Tingkat 15, Blok 8A
Kompleks Bangunan Kerajaan, Jalan Duta
Karung Berkunci 11061
50990 Kuala Lumpur
Q52 In Part L, do I have to fill up row L11 if I have already filled up C13?
My only source of income is from rental of private residential property.
A52 Part L is only applicable if you derive business income from Malaysia and have included the rental income in your Profit & Loss accounts.
Q53 Is it necessary for me to obtain the services of a tax agent to complete the Form M?
A53 It is not necessary to obtain the services of a tax agent if you are able to complete the Form M yourself. You are required to fill the Form by using the Explanatory Notes & Guidebook as a guideline. Please ensure that you declare income derived from all sources in Malaysia, work out the tax payable and sign the Form.
Q54 In previous years the form had to be declared before a Notary Public or consular official before submission. It is not clear to me from the form whether this is still the case or not. Please confirm whether
declaration before a consular official is still required?
Q54 The declaration on page 11 is to be signed by you. It need not be signed before a notary public etc.
Q55 I wish to apply for installments to settle my taxes for the Year of Assesment 2009. In the past I have always been granted installments to settle my taxes. My only source of income from Malaysia is rental.
A55 Under the Self Assessment System, full payment must be made by 30 April 2010 for the Year of Assessment 2009. Installments beyond 30 April 2010 may be allowed on condition a penalty is imposed on the balance unpaid as at 1 May 2010. If you find that you are unable to pay up the taxes in one settlement, you should contact or write in to the Collections Unit of the Non-Resident Branch to request for bimonthly advance installment payments. For example you should request for advance installments from March 2009 to Jan 2010 to settle the taxes for the Year of Assessment 2009 (income of calendar year 2009). So when you complete the Form M 2009 next year the balance of tax payable will not be too much for you to pay up by 30 April 2010.
Q56 I have credit arising from the previous year?s reduced assessments. Can I use this credit to pay my taxes for 2009 and where do I enter this credit in the Form M 2009?
A56 The credit arising from the reduced assessment for the previous year of assessment can be used to offset the tax for Year of Assessment 2009. But do not enter this credit in the Form M 2009. Please confirm the total credit available in account before off-setting the amount from the tax payable when paying using the Form CP501 (Pin.1/2009)
For example, if the credit arising from the Reduced Assessment for Year of Assessment 2008 is RM200.00 and the tax payable for the Year of Assessment 2009 is RM800.00, the tax payable in E1 & E3 of Form M 2009 should be RM800.00. RM600.00 is only entered into the Form CP501 (Pin.1/2009) payment slip when you make the payment.
Q57 What does ’99′ under ‘No of Installments’ in the Payment Slip stand for?
A57 It’s a code to indicate that you are paying in one lump-sum and not in installments.
Q58 Can I make payment through TELEGRAFIC TRANSFER?
A58 Payment through TELEGRAFIC TRANSFER is possible.The payment should be made payable to DIRECTOR GENERAL OF INLAND REVENUE. The account no. at the CIMB Bank Berhad, Cawangan Jalan Duta, is ” 1423-0004076-055 ”
Address: CIMB Bank Berhad
Jalan Duta Branch
Ground Floor , Block 8,
Government Office Complex,
50480 Jalan Duta,
Kuala Lumpur, Malaysia
Swift Code : CIBBMYKL
Sort Code : N/A
You are required to fax the following documents for the attention of the Accountant of Collection Branch, Kuala Lumpur:
- a copy of the covering letter stating your particulars such as
income tax reference no., name, address and passport no.
- the Year of Assessment concerned
- the amount of tax payable
- TELEGRAFIC TRANSFER advice
The fax no. is 603-62016857.