Responsibility of a taxpayer in Malaysia

Responsibility of a taxpayer in Malaysia

Responsibility of a taxpayer- In Malaysia, tax liability is imposed on individuals, companies and other business entities that generate income in Malaysia.

Generally, different tax rates and rules may vary depending on the type of taxpayer.

Hence, different type of taxpayer would have different responsibility.

1. What is the responsibility of an individual taxpayer ? 

   The responsibility of an individual taxpayer ( including sole proprietorships, partnerships ) as the following:

   • Obtaining and forwarding the Income Tax Return to the Inland Revenue Board Malaysia (IRBM).
   • Declaring income and claiming expenses.
   • Computing income tax payable.
   • Make tax estimate instalment payments (CP500) (for individual businesses). CP500 is pre-determined by IRBM. However, taxpayer can revise the tax estimate instalment payments via Form CP502 by 30 June.
   • Keeping records for 7 years for audit purposes.
   • Submission and remitting of the income tax payable.

2. What is responsibility of a corporate taxpayer ?

   The responsibility of a corporate taxpayer ( including companies, Small and Medium Enterprise (SME), Limited Liability Partnership (LLP) ) as the following:

   • Obtaining, completing and submitting the Income Tax Return to the Inland Revenue Board Malaysia (IRBM).
   • Declaring income and claiming expenses.
   • Computing income tax payable.
   • Submission of tax estimates (CP204) / revised tax estimates (CP204A).
     Subsection 107C (3) of the ITA provides that the minimum amount of tax estimate for a year of assessment shall not less than 85% of the amount of the tax estimate (CP204) or the amendment of tax estimate (CP204A) amount for the immediate preceding year of assessment.
     Revision can be made by 6th month and 9th month of the basis period/year of assessment.
   • Make instalment payments (CP204 / CP204A).
   • Remittance of Penalties on underestimated income tax payable (Calculated based on 30% difference).
   • Remittance Penalties on late payment (10%) of instalment payments
   • Keeping records for 7 years for audit purposes
   • Submission and paying of the income tax payable
   • Change of accounting period

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Our tax consulting services include business tax, transaction tax, personal tax, and corporate income tax. We don’t just guide you in interpreting and applying complicated taxation rules, but to explore new opportunities and business trends.

We keep you abreast with Malaysia tax updates and any changes in the local regulations.

We work closely with industry specialists, authorities, and associated professionals within ANC Group to provide the best-in-class integrated tax planning solutions. ANC specialists coordinate the accounting and taxation services to bring your business to success.