This post is also available in: Melayu (Malay) 简体中文 (Chinese (Simplified))

Personal Income Tax Filing Requirement in Malaysia

 

Time to file your Malaysia personal tax return

Under the self-assessment system which is based on the concept of “File and Pay”, individuals are required to:

  • File their completed income tax return forms to the Inland Revenue Board (IRB) together with the payment of the balance of tax payable (if any).
  • Pay their income tax liability through monthly salary deductions for salaried individuals or through bi-monthly instalments for individuals having business income.

 

Malaysia’s personal income tax year is from 1 January to 31 December and income is assessed on a current year basis. The tax filing deadline for person not carrying on a business is by 30 April in the following year. For a person carrying on a business, the tax filing deadline is 30 June in the following year.

Our personal income tax (Form B/BE/M/MT) submission package includes:

  • Preparation of tax computation in determining the Expatriate/Individual’s tax positions
  • Filing of Tax Returns (Form B/BE/M/MT)
  • Preparation of working sheets and appendices as supporting to Tax Returns
  • Advising on the payment of the balance of tax payable (if any) based on the Tax Returns submitted
  • Providing timely reminders of deadlines (by email and by call)
  • Review of tax positions to enhance claims of tax incentives, where applicable
  • Timely updates on latest tax developments and the implications on individuals.

 

Penalty Provisions

(i) Failure to submit a tax return

Failure to submit a tax return and upon conviction, the taxpayer will be liable to a fine of not less than RM200 and not more than RM20,000 or to imprisonment for a term not exceeding six months or to both.

The IRB is allowed to impose penalty of up to 3 times the amount of tax and/or additional tax payable if no prosecution action is taken against the taxpayer. In practice, the following late filing penalty rates will be imposed by the IRB on the tax payable before any set-off, repayment or rebates:

Submission of tax return Rates of penalty
Up to 12 months 20%
Exceeding 12 months to 24 months 25%
Exceeding 24 months to 36 months 30%
Exceeding 36 months 35%

 

(ii) Failure to remit tax payable

Failure to remit the balance of tax payable by 30 April / 30 June will attract a penalty of 10%. A further 5% penalty will be imposed on any balance remaining unpaid after 60 days.

 

Personal Income Tax Deadline Reminder

We would like to remind all taxpayers, including sole proprietors and partners, to file their income tax returns before the stipulated deadline. Please file early to avoid the last-minute rush and late filing penalties.

For Personal Income Tax FAQ, please click: Personal Income Tax.

 

Filing of Form E and Issuance of Form EA

Employers are responsible under the Income Tax Act to make monthly deduction & payment of PCB as well as filing of Form E and issuance of Form EA to their employees.

For Companies, LLP, Trust Bodies and Co-operative Societies, it is mandatory to file the Form E by 31 March (1 month grace period might be given for entity who file via e-filing) even the entity has no employee OR dormant OR has not commenced business during the year.

Employers which are companies are compulsorily required to furnish Form E via e-Filing (Form e-E) with effect from the Year of Remuneration 2016.

Every employer shall, for each calendar year, prepare and render to his employee a statement of remuneration (EA for private sector employees; EC for public sector employees) on or before the last day of February of the following calendar year for each employee to complete and submit his/her personal tax return.

Failure in submitting Form E will result in the IRB taking legal action against the company’s directors. A minimum fine of RM200 (to RM20,000 or to imprisonment for a term not exceeding 6-months, or both) will be imposed by IRB for failure to prepare and submit the Form E to IRB.

As a one stop solution accounting firm, we offer services to complete income tax return for individual and preparation of form E and EA for your company employees at affordable rates. Email to us now!