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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21 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
    • June 22, 2018 at 7:26 am
      Permalink

      Hi sir,

      I am coming to malaysia on 15th September 2018 and I will Complete 182 by March 20th…..

      1. So I will not be detected 28% tax fim April Month onwards, is that correct? or do they continuous to detect 28% for another 182 days in 2019 as well…..

      2. If I file the tax fillng on April 2019….. Will I get refund of the amount what I paid on 4 months on 2018…….

      Hi Raj, Your tax will be for your working period. Your 2018 tax filling is to be submitted in 2019, while your 2019 tax filling is to be submitted in 2020. Tax rate since year of assessment 2016 is at 28%. The 182 days calculation is in a calendar year (Jan-Dec). You are not required to pay tax only if employed in Malaysia less than 60 days.

      More info: http://www.hasil.gov.my/

      Reply
  • June 24, 2018 at 5:20 am
    Permalink

    What is the e filing submission deadline for the latest Form B?
    Under EPF self contribution, if the contributor who is 64, can he or she claim for tax relief?

    Form B tax deadline is June 30 with 15 days extension for e-Filing.

    Yes for EPF/Life Insurance tax relief is claimable.

    Reply
  • July 10, 2018 at 9:24 pm
    Permalink

    HI,

    I’m earning RM 15000/month (no other income). I am unmarried and i’m a expat. I will work in malaysia for long term project (more than 2 years) and I’m staying alone.

    My question is:
    what is my monthly and year tax deduction ?
    What are all i can show for tax relief? (for me as individual)
    Can i get any local auditor who can help me for tax filling?

    Hi Syed,
    1. Your tax rate is at a flat 28%
    2. If you qualify as a tax resident or double taxation.
    3. We will be in touch with you to help you link up.

    More info from Inland Revenue Board Of Malaysia

    http://www.hasil.gov.my/bt_goindex.php?bt_kump=5&bt_skum=1&bt_posi=2&bt_unit=1&bt_sequ=1

    Reply
  • July 15, 2018 at 5:04 pm
    Permalink

    Hi.. I missed the deadline for e-filing submission. Can i still proceed for e-filing submission? Or best is to visit the nearest LHDN branch?

    Hi Ing, you can still submit online while it allows you to go through. You may be penalised for late submission. Else will need to submit at a LHDN branch.

    Reply
  • July 16, 2018 at 11:16 am
    Permalink

    Hi, I have submitted Borang B on 16/07/2018 but my company is in loss position.So, do LHDN charge any penalty for late filling?

    Kindly advise.

    Urgent.

    Hi Usha, The penalty is typically based on increment from the tax payable. Would suggest you contact LHDN urgently.

    Reply
  • July 26, 2018 at 3:16 pm
    Permalink

    I worked for 3 months in this financial year in Malaysia. I am out of Australia now can I do my exit tax formalities when I am offshore ? please help

    Hi Nantha Kumar Raja, You will need to apply in writing to LHDN to close your tax file.

    http://www.hasil.gov.my/

    Reply
  • August 4, 2018 at 10:10 am
    Permalink

    Hi, My name is Vicky, Please advise the following:-

    Hi Vicky

    1) Tax rate for an Enterprise company (Sole proprietor) registered in Malaysia.

    First 500,000 chargeable income: 18%
    Subsequent chargeable income: 20%

    2) Balance sheets, income vs expenses, must it be an accounting software or manual is acceptable.

    Either or as long as complete

    3) Must I have a company account or must have company registered Account (current)

    Yes you must have a company account

    4) Any other information on Enterprise, will be highly appreciated.

    Reply

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