Income Tax Malaysia 2018

Useful reference information for Malaysia’s income tax 2018 filing deadline for year of assessment 2017 for BE is Apr 30, 2018 (manual form) and May 15, 2018 (e-filing). E&OE.

What is income tax?

Income tax is a type of tax that governments impose on individuals and companies on all income generated. Individuals and companies must file their taxes within a stipulated deadline to pay any taxes owed (or receive any overpaid tax refunds).

Income:

  • Business or Profession
  • Employment
  • Dividends
  • Interest
  • Discounts
  • Rent
  • Royalties
  • Premiums
  • Pensions
  • Annuities
  • Others

Why contribute?

The tax you pay helps pay for the salaries of government workers including the police force and firefighters. It also pays for infrastructure and public amenities including roads, parks, and schools.

 

Do I need to pay tax?

An individual who earns an annual employment income of 34,000 (after EPF deduction) has to register a tax file. If the employee is eligible for Scheduled Tax Deductions (STD/PCB) deduction, he is advised to register an income tax file before STD/PCB is implemented.

What should I do if my income is taxable?

Apply to register an income tax reference number at the nearest Inland Revenue Board of Malaysia (IRBM) branch.

Documents Required For Registration

  • A copy of the latest Salary Statement (EA/EC Form) or latest Salary Slip
  • A copy of Identification card (IC) / police IC / army IC / international passport
  • A copy of marriage certificate (if applicable)

You can also register an Income Tax reference number via e-Daftar

 

Chargeability of Income Tax for Foreigners

If you are a foreigner employed in this country you must give notice of your chargeability to the Non-Resident Branch or the nearest IRBM branch within 2 months of your arrival in Malaysia.

What if I don’t pay my taxes?

Failure to file income taxes

  • No prosecution: 300% tax payable.
  • On conviction: RM200 – RM200,000 / imprisonment.

Incorrect tax returns by understating income

  • No prosecution: 100% tax undercharged.
  • On conviction: RM1,000 – RM10,000 and 200% tax undercharged.

Incorrect tax returns by understating tax liability

  • 10% on difference between tax underestimated and 30% of actual tax payable.

Late payment

  • 10% tax payable and additional 5% on outstanding if not paid in 60 days.

 

Malaysia Key Income Tax Figures

Individuals

  • Min tax rate: 0%
  • Max tax rate: 28%

Companies

  • Corporate tax rate cap: 25%
  • Average effective tax rate: 7.5%

Income tax changes over the last decade

  • 2005: e-Filing introduced nationwide
  • 2009: individual tax rate reduced from 28% to 27%
  • 2009: corporate tax rate reduced from 26% to 25%
  • 2010: individual tax rate reduced from 27% to 26%
  • 2015: corporate tax rate reduced from 26% to 24%
  • 2015: individual tax rate reduced from 26% to 25%
  • 2016: individual tax rate increased from 25% to 28%

 

Income Tax Filing Guide

More Info

 

Share and discuss on this year’s income tax filing!

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13 thoughts on “Income Tax Malaysia 2018

  • April 3, 2018 at 2:03 pm
    Permalink

    Thanks for the useful information!
    For the Lifestyle relief – Internet Subscription, is the Mobile phone data plan which bundle with voice call, can claim under it?

    Hi Wong, unfortunately mobile phone data plans are not included. It must be a broadband internet subscription.

    Reply
  • April 19, 2018 at 10:19 am
    Permalink

    Hi,
    Would like to check if a person is currently under employment and also as a business owner, how does he going to declare his tax ya? Thanks.

    Hi Win, You will be likely submitting under e-B With business source of income

    Reply
  • April 21, 2018 at 3:16 pm
    Permalink

    I am a retiree. The only income for 2017 is from rent received and the amount is less than RM30K for the year. Do I have to file my income tax Form BE?
    Thank you

    Hi SK Loh, You will need to continue filing your income tax unless you close your income tax file at your LHDN branch.

    Reply
  • April 30, 2018 at 11:41 pm
    Permalink

    All my company’s foreign workers have Income Tax reference numbers that we registered for them. Out of so many only 2 paid MTD for one particular month due to high OT for that month in the whole year of 2017.
    3 questions for you:
    1. E-filing has a grace period of 15 days for Form BE. We have not obtained any e-filing password from LHDN for them. If we did, can we assist to do their e-filing AFTER 30/4/18 but before 15/5/18?

    2. Will there be any penalty for question (1)?

    3. Alternatively, can their MTD be considered as final tax? (Note: They do fulfil the criteria for it)

    Hi SLW, Will try our best to answer your queries.
    1. As long as you can get e-filing, you are eligible for the 15 day grace period until May 15th.
    2. No penalty if filed within stipulated time.
    3. MTD deductions are recorded BUT a filing is still required. Do check with LHDN.
    All the best in getting the tax matter sorted out.

    Reply
  • May 2, 2018 at 10:57 am
    Permalink

    HI, IF A PERSON WHO IS A COMPANY DIRECTOR AND ALSO AN EMPLOYEE OF ANOTHER COMPANY, HOW SHALL HE/SHE FILE FOR INCOME TAX?

    HI RYAN, YES YOU DO AS A BUSINESS OWNER. YOU WILL NEED TO SUBMIT BORANG B. PLEASE REFER TO LHDN FOR MORE INFO.

    Reply
  • May 3, 2018 at 6:22 pm
    Permalink

    Hi, I had monthly 200 petrol allowance from my company. I believe petrol allowance can be exempted by not exceed 6000 per year right? But in my BE form, the petrol allowance was included in the total gross income. How can i exclude the petrol allowance from tax? Don’t seems like there is any field in the e-filling BE form that allow me to key in the petrol allowance for exemption. Thanks.

    Hi Steven, Perquisite for travel allowance up to 6000 should be exempted from the EA form if you qualify for the tax deduction filled up section F. You may want to check with your HR.

    http://lampiran1.hasil.gov.my/pdf/pdfam/Notes_PartF_2.pdf

    Reply
  • May 3, 2018 at 10:48 pm
    Permalink

    Hi dear,
    If i have tandatangan terus hantar then just realise that i forgot to fill in kwsp column then what should i do? Thanks

    Hi dear,
    Oh no. You can write a letter to LHDN detailing the mistake and enclosing relevant documents. Or visit your LHDN branch.

    Reply
  • May 4, 2018 at 11:57 pm
    Permalink

    HI, i have submit my Be form via e-filling on 30 April 2018. When will be the due date to pay additional tax ?
    Tq

    HI Tan, for e-filing will need to pay by May 15, 2018

    Reply
  • May 6, 2018 at 11:03 pm
    Permalink

    If i have a refund that was filed through e-filing last march and sunmitted pertinent document last april 16, when do you think (estimate) will i be getting it. Or do i need to follow up on this? Thanks.

    Hi Elg, LHDN is pretty efficient. Tax refunds will usually be received within 30 days from filing date. If you haven’t received it within 30 days, you can follow up with LHDN.

    Reply
    • May 10, 2018 at 8:28 am
      Permalink

      Thank you. I better follow up then coz its nearly 2 months and heard nothing from them as of this writing. Appreciate your assistance on this inquiry.

      Most welcome ELG. All the best with your refund. If we have helped, please do share MyPF with your friends 🙂

      Reply
  • May 15, 2018 at 4:40 pm
    Permalink

    Hi,
    I cleared my tax in march 2017 and going back my home country , I join back in march 2018, should I have to submit the e -filing .

    Hi Rajesh, as long as your tax file is open yes you should submit your filing

    Reply
  • May 17, 2018 at 11:10 pm
    Permalink

    I missed the dateline of e-filing. What should I Do?

    Sorry to hear that. You should still submit your tax filing ASAP. Suggest to go to your nearest LHDN branch as soon as possible. There is a penalty for late payment/filing (typically 10% for individuals) which can be reduced if you have a reason that is accepted for late filing.

    Reply

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