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).
- Business or Profession
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.
- 10% tax payable and additional 5% on outstanding if not paid in 60 days.
Malaysia Key Income Tax Figures
- Min tax rate: 0%
- Max tax rate: 28%
- 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