Faculty of Business, Accountancy &

Management (FOBAM)
Course Details:
Module Code and Title :

FIN 4334, Taxation 1

Programme of Study

BACHELOR OF ACCOUNTING & FINANCE

Lecturers Name

Cheryll Lim

Semester

semester 4 year 4

Assignment Details:
Title of Assignment

Taxation 1, Malaysian Tax System.

Due Date

/0 /15

Submission Date

/0 /15

Type (* please tick []) :

Individual

Group

Declaration by student(s):
I/We, hereby declare that the attached assignment is my/our own work and
understand that if I/we am/are suspected of plagiarism or another form of
cheating, my/our work will be referred to the Programme Coordinator/Head
of Faculty who may, as a result recommend to the Examinations Board on
academic disciplinary action including expulsion for the SEGi University and
Colleges.
Students Details:
Name: Yassin S. Hagelsafi

Student ID: SCM-019401

Signature:
Submission
Checklist:
Coversheet
CW Assessment Sheet
Turnitin Report

Reminder:
1
2

Students are reminded to keep a copy of all

the coursework submitted.
All LATE SUBMISSION will be DEDUCTED
10% a day up to a maximum of FIVE (5)
days, where subsequently, the coursework
will be awarded ZERO (0).

Overall
Marks:

Faculty of Business, Accountancy & Management (FOBAM)

REPORT ASSESSMENT CRITERIA AND MARKS ALLOTMENT
Subject: FIN4334 TAXATION 1

COURSE: BACHELOR OF ACCOUNTING (HONS)

Name: Yassin S. Hagelsafi

No.
1

Assessment Criteria

Student ID: SCM 019401

Weightings

Personal tax

Marks Allotted by
Lecturer
40%

Comments:
i Individual resident status
__________________________________________________________________________________________

ii Income subject to tax

iii Taxation of employer
__________________________________________________________________________________________
iv Tax deductions on personal income (Reliefs)
v Individual income Tax rates
____________________
vi Personal tax computations
__________________________________________________________________________________________

Lecturer Signature

Subject
page

Table of content
Corporate tax
i Corporate resident status
ii Income subject to tax
iii Tax deductions (Business expenses)
iv Capital expenditure and allowance
v Corporate income tax rates
vi Corporate tax computations

___________
Date

45%

1. Introduction ..
1
3
Presentation
of the analysis:
2. Personal
tax ...1
8
2.1.
2.2.

i Appropriate citation and references.

iiStyle and readability including proper organization of

answers.
Individual
resident status1
15%
Involvement and critical discussion
Content and Page Number and Proper
each part answered, list of
Income Heading/Title
subject tofortax
references (Use of APA Referencing System)
2
v
Overall presentation

iii
2iv

2.3. Taxation of employer

Total

100%

.3
2.4. Tax deductions on personal income
...4

2.5. Individual income tax rates ...

..5
2.6. Personal tax computations
..7
3. Corporate tax ...9
17
3.1. Corporate resident status
.9
3.2. Income subject to tax
9
3.3. Tax deduction
..10
3.4. Capital expenditure and allowance
..11
3.5. Corporate income tax rates
..12
3.6. Corporate tax computation
12
4. Downsides of the self-assessment system...
.17
4.1 For the
individuals..18
4.2 For the company
18
4.3 Recommendation &
conclusion...19

5. Conclusion..19
6. References
..20

1. Introduction
2.

This report is about the tax system of Malaysia particularly

personal and corporate income tax.

3.

Taxation is defined as compulsory exaction of money by a

public authority for a public purpose enforceable by law. (Case law:

Matthews v the chicory marketing board, 1938)
4.

In Malaysia, income tax is governed by the income tax act

1967; which has been in effect since 1 st January 1968 till present.
Inland Revenue Board IRB is the official body responsible for
implementing the tax law and policy. There are different types and
characteristics of tax; which varies according to the tax purpose, such
as: personal income tax, corporate income tax, local tax, customs duty
tax, and value added tax.
5.

To determine whether a transaction is liable for income tax,

it must fall within the ambit of scope of charge which is provided in

section 3 of the income tax Act 1967.
6. 2.

Personal tax

2.1. Individual resident status

7. The resident status of an individual is outlined in section 7 of the income
tax Act. The preferential tax treatment is based on the individuals
resident status. With effect from year of assessment YA 2015, the nonresident individuals suffer the maximum flat rate of tax at (25%),
compared to a range of (0% - 25%) for resident.
2.1.1.

Determination of resident status for individuals

8.
The determination of resident status is a quantitative test
can be performed by following the guidelines mentioned in section
7(1).

9. Section 7(1) of the income tax Act 1967 provides four circumstances [(a)
(d)] where an individual is considered as tax resident in Malaysia:
10. S7- (1) - (a): provides; an individual must be physically present in
Malaysia for 182 days or more in a particular basis year.
11. S7- (1) - (b): provides; if an individual is present in Malaysia for a
period in a particular basis year less than 182 days, linked to or liked by a
period of 182 or more consecutive days.
12.

S7- (1) - (c): provides;

i.
ii.

An individual must be present in Malaysia for 90 days or more;

And must be resident or present in Malaysia for 90 days or
more in 3 out of 4 immediately preceding YAs.

13.

S7- (1) - (d): provides; and individual must be resident in Malaysia in

the following YA and resident in 3 YAs immediately preceding that

particular YA.
14. Temporary absence must be taken into account as
provided in section 7(1) (b). Also, a part of a day is deemed as full day
in Malaysia.
2.2. Income subject to tax
15. Section 4 of the income tax Act 1967 provides the main
types of income upon which tax is chargeable. Any tax chargeable
income must be earned in, derived from or remitted to Malaysia.
Below, is Section 4 (a) (f); that outline the main types of income
subject to tax:
i.

Gain or profit earned from business (whatever period of time

ii.

carried on)
Employment

earnings-

include

wages,

salary,

remuneration, leave pay, fees, commission, bonus, gratuity,

perquisite, allowance (whether in money or otherwise) section 13(1)(a) , any benefits provided by an employer
2

(include the benefits that dont have monetary value or not

convertible into money) - section 13(1)(b)

, use or

enjoyment by the employee of living accommodation in

Malaysia provided for the employee by or on behalf of the
employer section 13(1)(c) , contribution by an employer to
unapproved pension or provident fund, scheme or society
section 13(1)(d) , any amount received by employee as a
compensation for loss of the employment - section 13(1)(e)
.
Any gain from dividends, interests or discounts.
Royalty, rent or premiums.
Pensions and annuities.
Gains or profits not falling under the forgoing paragraph.

iii.
iv.
v.
vi.

16. Moreover, income of non- resident individual that derived

from Malaysia is also falling within the taxable income and its include :
money paid in return of providing a service rendered by the nonresident individual or his/her employee, money paid in consideration of
technical advice or assistance, rent or other payments for use of
movable property.
2.3. Taxation of employer
17. Duties and responsibilities of an employer as provided in
(occupational safety and health OSHA Act 1994 section 15- 19) are to
ensure the safety, health and welfare of all the employees. Employers
are obligated to file in Form CP8A or CP8C which are concerned with
the remuneration paid to every individual employee.
18. Moreover, the employer required by law to comply with the
tax obligations mentioned in section 83 of the income tax Act 1967
which are:
i.

Employer must annually report the remuneration paid to

his employees
3

ii.

Employer must compute and remit the correct amount of

iii.

monthly tax deduction (MTD)

The employer must also notify the Malaysian Inland
Revenue board when an employee commence or cease
employment, retire, or die.

19. Furthermore, instead of paying remuneration in cash;

employer might issue shares free of charge or at lower price than
market price to the employee in consideration of his employment; this
process is known as employee share option scheme (ESOS). The
income tax provisions related to (ESOS) are discussed under section
25, section 77, section 83, and paragraph 13(1)(a) of the income tax
Act 1967.
20. Employee share option scheme (ESOS) is considered as
employment income of an individual and it is liable for tax. Below is
example of calculation of benefit received from (ESOS) which is
assessed as perquisite- paragraph13 (1) (a) of (ITA 1967).
21.

Ringg

it Malaysia (RM)
22.

Market

value

of

share

XXX
23.

Less:

24.

(-)

(XXX)

Offer

price

of
tax

share

at

the

date

chargeable

of

the

offer
amount

XXX
25.
2.4. Tax deductions on personal income (reliefs)

26.

Effective from year of assessment YA 2010, deductions (reliefs) on

personal income for tax resident individuals are:

27.

Deductions

(RM)
28.

Self

9,000
29.

Additional

deduction

for

disabled

individual

6,000
30.

Wife/husband

3,000
31.

Additional

deduction

for

disabled

wife/husband

3,500
32.

Medical

expenses

for

parents

5,000
33.

Purchase of supporting equipment for disabled self, spouse,

34.

Child

or

parent

5,000
35.

Education fees (self)1 5,000

36.

Medical expenses on serious disease for self, spouse or child

37.

(Including fees up to RM500 incurred for complete medical

38.

Examination)

5,000
39.

Purchase

of

books/journals

/magazines/similar

publications

1,000

40. Deductions
(RM)
41.

Purchase

of

personal

computer

(allowed

once

every

years)

3,000
42.

Net

deposit

in

Skim

Simpanan

Pendidikan

National

3,000
43.

Purchase

of

sports

equipment

300
44.

Interest

on

housing

loans

(conditions

for

eligibility)

10,000
45.

Broadband

subscription

fees

500
46.

Child (unmarried)

47.

i.

Below

18

year

1,000
48.

ii. 18 years and above and:

49.

a)

Schooling

1,000
50.

b) Studying in any institution of higher learning

51.

In

Malaysia

Outside

Malaysia

4,000
52.

4,000
53.

iii.

Disabled

child

5,000
6

54.

Employees

Provident

Fund

(EPF)

and

life

insurance

6,000
55.

Annuity

scheme

premium

1,000
56.

Education

and

medical

insurance

3,000
57.
2.5. Individual income tax rates
2.5.1 For year of assessment YA 2015 individuals who are tax residents in
Malaysia are subject to progressive tax rates in relation to chargeable
income, below are the rates:
58. Chargeable

Income

(RM)

Marginal Tax Rate (%)

59.

2,500

0
60.

2,501

5,000

0
61.

5,001

10,000

1
62.

10,001

20,000

20,001

35,000

35,001

50,000

1
63.
5
64.

10

65.

50,001

70,000

16
66.

70,001

100,000

21
67.

100,001

150,000

250,000

400,000

24
68.

150,001

24
69.

250,001

24.5
70.

Exceeding

400,000

25
2.5.2 As a general rule, non- resident individuals are subject to a flat tax
rate at 25%. Types of income and its tax rates for non-resident
individuals provided below: (YA 2010)
71.

Income

tax Rate (%)

72.

Interests

15
73.

Royalties

10
74.

Entertainers income

15
75.

Special types of income:

Rental

10
8

Management or technical service fee

Payment for services rendered in Malaysia (installation or

76.

10

Operation in plant, machinery)

10
77.

Dividends

25
78.

Other incomes

25
79.

(REIT)

10
80.
2.6. Personal tax computations
81. Example
82.

Veronica and her husband, Stephen has the following income for the

year ended 31st December 2012.

83.

Stephen (RM)

Veronica (RM)
84.

Employment income

42,000
85.

Rental income

32,000

_
86.

Business losses

(40,000)

_
87.

Contribution to EPF

4,620
9

88.

Insurance premium on life

8,000

3,000
89.

Annuity contract premium

1,000

1,200
90.

Children below 18 years old are four.

91.

Compute the income tax payable for YA 2012 under both joint and

separate assessment.
92.
93. Stephen & veronica tax computation for YA 2012
94.

Joint assessment

separate assessment.
RM
95.

Stephen(RM)

.
Veronica(RM)

Employment

42,000.

income

Rental income

32,000

. Aggregate income

32,000

42,000 less: business loss

. Total income

(32,000)
42,000

42,000
96.

Less: personal relief

97.

Self

(9,000)

Wife

(3,000)

(9,000)
98.
_
99.

Children (1000x4)

(4,000)

(4,000)

10

100. Insurance

and

EPF

(7,000)

(7,000)
101. Chargeable income

19,000

22,000
102. Tax payable @ scaled rates

445

615
103. Less:

rebate:

husband

(400)

(400)
104.

Wife (restricted)

(45)

105.
215
106.
107.
108. The joint assessment would result in a lower income tax payable (NIL)
compare to wife claiming child relief (RM 215).
109.
3. Corporate tax
3.1. Corporate resident status
110.

The criteria of determination of resident status of

corporates or bodies of person are discussed in section 8 of the income

tax Act 1967.
111.First, paragraph 8(1) (a) of the Act provides that any
Hindu joint family doing business in Malaysia is considered as tax
resident in Malaysia for a year of assessment if the manager of the
Hindu joint family was resident in Malaysia in that particular year of

11

assessment. In like manner, the Hindu joint family is deemed nonresident if the manager is not resident for that particular YA.
112.Second, paragraph 8(1) (b) of the Act provides that a
company is considered as tax resident in Malaysia for a year of
assessment if any of the management and control of the business for
that particular year are exercised in Malaysia.
113.Resident and a non-resident companies in Malaysia are
taxed in the same manner in respect of gains or profits accrued in or
derived from Malaysia.
114.
3.2. Income subject to tax
115.Under S (3) of the income tax act - scope of chargeresident companies and business firms are subject to tax if their
income is accrued in or derived from Malaysia, or received in Malaysia
from outside Malaysia. However, income received in Malaysia from
outside Malaysia is tax exempted, except for the income of companies
carrying on international business across the borders such as (banking,
air or sea transportation, shipping and insurance).
116.For

non-resident

companies;

foreign

income

is

tax

exempted, and only income accruing in or derived from Malaysia is

subject to tax.
117.Types of corporate income upon which tax is chargeable
are provided under section 4 of the income tax Act including: gains or
profits

from

business,

dividends,

interest,

rental,

royalties

and

premiums.
118.

12

3.3. Tax deductions

119.The law has laid down several allowable expenses to be
deducted from the gross income in the process of computing the
adjusted income of a business source. Business expense must fulfil
some conditions in order to be allowed for deduction from the gross
income of a business.
120.The general deductibility test which is featured in section
33(1) of the income tax Act provides five conditions:
i.
ii.

The business source must be accounted separately.

Outgoings and expenses. Outgoings include business loss due

iii.

to theft, defalcation of employee, or bad debt.

Wholly and exclusively. The meaning of wholly and exclusively
provided in case law: Bentleys, stokes and Lowless v Beeson (33 TC
491)(CA):
121.
Wholly: refers to quantum of money expended
122.
Exclusively: refers to the motive or object in mind of
incurrence and the purpose must be the sole purpose.
123.
The guiding principles that define the boundaries of
wholly and exclusively are (motive, direct purpose of business,
commercial expediency, benefit to third party, and classification of

iv.

accounts)
Incurred refers to the money for which the legal liability to pay has
arisen, including amount paid, payable or becoming payable. It
means that expenditure deduction is allowed in the year of
assessment when the expenditure is incurred, not when it actually

v.

paid.
In the production of gross income. It means the tax payer shall
show that the expenditure was for the purpose of earning income.
124.The

allowable expenses

(after

fulfilling

the previous

conditions) include interest expense on borrowed money, repairs and

renewals, and rent. On the other hand, the allowable expense must not
13

be mentioned in section 39 of the income tax Act where expenses are

not allowable for deduction.
125.
3.4. Capital expenditure and allowance
126.Capital

expenditure

is

defined

as

expenditure

on

acquisitions of or improvements to fixed assets. (Collins E.D. ,

2012).Under section 39 of the income tax Act, no deductions are
allowed for capital expenditure or depreciation for the assets that used
in production of the business income. However, schedule 3 of the
income tax Act provide several allowable deductions on capital
expenditure.
127.The purpose of capital allowance is to give business
owners a relief on the expenditure incurred on capital assets. And it is
only given to business activities. Capital allowance can only be claimed
if he person is carrying on a business, and incurred capital expenditure
(plant expenditure or building expenditure).
128. The general formula in the process of calculating capital
allowance is:
129.

RM

RM
130. Adjusted

income

XX
131. Add:

(+)

balancing

charge

XX
132.
XX
14

133. Less: (-) capital allowance

134.

Unabsorbed capital allowance b/f

135.

Current year capital allowance

136.

Balancing allowance

(XX)
137.

Statutory

income

XX
138.Capital expenditure is an expense incurred to acquire a
fixed capital. Paragraph 2, schedule 3 of the income tax Act 1967(Act
53) provides: Plant expenditure is qualifies as capital expenditure and
it includes {provision of machinery or plant used in business, alteration
of an existing building for installation of plan or machinery, (preparing,
139.tunnelling, or levelling land in order to prepare a site for
the installation of plant or machinery), (fishponds, animal pens,
chicken houses, cages, buildings, structural improvements excluding:
living accommodation for directors/shareholders)}.
140.Under the same schedule (schedule 3 of the income tax
Act 1967 Act 53) motor vehicle expenditure and building expenditure
are also qualified for capital expenditure.
141.
142. Type Of Asset

143. Initial

144. Annual

145. Heavy

Allowance (%)
146. 20

Allowance (%)
147. 20

Vehicle
148. Plant and Machinery

149. 20

150. 14

151. Computer

152. 20

153. 40

155. 20

156. 10

Machinery

Equipment
154. Others

and

ICT

15

157.
3.5. Corporate income tax rates
158.Resident and a non-resident companies in Malaysia are
taxed in the same manner in respect of gains or profits accrued in or
derived from Malaysia.
159. With effect from year 2009 until 2013 the income tax rates are as
follow:
160. Companies with paid up capital RM 2.5 million:
161.

On

the

first

RM

500,000

Subsequent

balance

20%
162.
25%
163. Companies

with

paid

up

capital

more

than

RM

2.5

million

25%
3.6. Corporate tax computation example
164. Wright Sdn. Bhd. is a manufacturer of writing instruments. For the year
ended 31st December 2012, the company submitted the following profit
and loss account.
165.

Note

RM

RM
166. Sales
12,001,355
167. Less: cost of sales

(5,401,350)

16

168.
6,600,005
169. Add:

dividend

(gross)

25,000
170. Interest

125,000
171.
6,750,005
172. Less:
173. Remuneration

1,200,550

174. Professional charges

229,450

175. Provision for bad debts

300,000

176. Repairs and maintenance

399,850

177. Loss on sale of fixed asset

150,000

178. Entertainment

240,000

179. Subscriptions

10

360,150

180. Compensation

11

80,500

181. Other expenses

12

365,500

182. Depreciation

350,005

(3,746,005)
183. Net

profit

before

taxation

3,004,000
184.
17

185.
186. Notes:
1. Cost of sales: royalty amounting to 120,000 included in cost of sales,
Its paid monthly to holding company in Germany. Withholding tax on
sum of 10,00 was paid five week later because of accounting error.
2. Dividend: from Singapore dividend paid to the companys bank
account in Malaysia. The dividend is exempted from Singapore income
tax.
3. Interest: charges on overdue trade accounts imposed by the company
for delayed payment by customers.
4. Remuneration: the manager of
remunerated

as

overseas

sales

office

follow

was

salaries

60,000
entertainment

allowance

..30,000 EPF contribution by

the employer ...23,800 two of the
companys employees are disabled and their monthly salaries RM 700
and RM 800 respectively.
5. Professional charges: include the following
187. Legal fees for registration of a new trademark RM
22,000

renewal

of

existing

trademarks

..RM 13,000 legal fees for obtaining a

new loan facility RM 16,000 legal fees for
handling

income

tax

appeal

RM

12,000

accounting fees for new audit system in response to cash embezzlement.

40,000

accounting

....RM

charges

for

10,000

staff

filing

annual

recruitment

tax

charges

return
paid

to

employment agency RM 15,000 valuation of land and

building . RM 72,000
6. Provision for bad debt: amounting to RM 300,000.
7. Repairs and maintenance: include; widening of the drains .
RM140,000
18

188. Replacing an old chimney RM150,

000 extending the porch at the factory . RM
25,000
8. Loss on sale of fixed asset: land was bough to build new warehouse
but, the project did not materialize and the land sold at loss of RM
150,000.
9. Entertainment: incurred to entertain companys clients, except for
RM 20,000 incurred for annual dinner of companys staff.
10.
Subscriptions:
entrance
fee
to
gulf

club

RM 300,000 entrance fee to trade association

.. RM 50,000 annual subscription to a
trade association ... RM 2,000 donation to Red
Crescent Society (section 44(6))...... RM 8,000
11.
Compensation: a client sued the company for late delivery of
good; the case settled outside the court after the company paid an
amount of RM 80,000.
12.
Other
expenses:

include;

advertisement

.RM 250,000 scholarship for managing directors

son at local university . RM 50,000
13.
Additional information: rates for residual expenditure and
annual allowance
189. Assets
rates

residual expenditure

industrial building

6,000

annual allowance

RM 800,000

3% plant and machinery

RM
RM 150,000

RM 70,000

14% motor vehicles

RM 100,000

RM 70,000

20% furniture and fitting

RM 20,000

RM 3,000

10%

190. Starting with net profit before taxation, compute the chargeable
income of Wright Sdn. Bhd. For the YA 2012.
191. ANSWER TO THE EXAMPLE
192. Wright Sdn. Bhd. Chargeable income for YA 2012.

19

193.

RM (-)

RM (+)
194. Net

profit

before

tax

3,004,000
195. Royalty
10,000
196.
197.
198.
199.
200.
201.

RM (-)

RM (+)
202.
203.

Dividend

25,000
204.

Interest

--205.
(double deduction) note (1)
206.
ment

Salaries
18,000
Entertain
allowance

15,000

20

207.

Excess

EPF

contribution

by

employer

note

(2)

12,400
208.
fees

Legal
for

Registration

of

new

trade

mark

22,000
209.

Renewal

of three existing trademark

---

210.

Fees

obtaining

new

loan

for

facility

16,000
211.
for

Legal tax
income

tax

appeal

12,000
212.

Accounti

ng fees for setting up system

---

213.

Accounti

ng charges

---

214.

Staff

recruitment

charges

--215.
of

Valuation
land

and

building

72,000

21

216.
for

Provision
bad

debt

(general)

250,000
217.

Widening

of

drains

140,000
218.
g

Replacin
an

old

chimney

150,000
219.

Extendin

the

porch

25,000
220.
sale

Loss
of

fixed

on

assets

150,000
221.

Entertain

ment

(relates

to

sale)

--222.

Entrance

fee

(RM300,

000+50,000)

350,000
223.

Annual

subscription
--224.
to

Donation
Red

Crescent

society

8,000
22

225.

Compens

ation
--226.

Advertise

ments
--227.

Scholars

hip
--228.

Deprecia

tion
350,005
229.
(43,000)

4,586,405

230.

Adjusted

income
4,543,405
231.
capital

Less:
allowance

note

(3

&

4)

(221,450)
232.

Statutory

income
4,321,955
233.

Add:

other source of income

23

234.

Divi

dend income

---

235.

Aggregat

income

4,321,955
236.

Less:

approved

donation

(8,000)
237.

Chargea

ble

income

4,313,955
238.
239. 4.0 Downsides of the self-assessment system that practiced in Malaysia.
240. 4.1 For the individuals.
241.
1 One of the downside of self-assessment system is a tax spender in Malaysia
are forcible with no choice however to learn the knowledge and skills of the
system in order to understand as well as comply the tax rates and
regulations. When the person is about to pay his/ her amount of the tax
utilizing this system (SAS) and lacks knowledge a lot of errors will be made
and he /she perhaps end up getting her or himself into penalty .in the other
hand the employers of the tax authority needs this knowledge in this case as
if they lack it there will not be able to record the taxes which have been paid
242.
2 In addition, another downside on the persons is they are required in keeping
accounting records and calculating tax accurately because some individuals
cannot keep their records they are too busy or even carelessness can be a
factor in this problem. Without an accurate records tax will not be easily
calculated or might be impossible.
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243.
244.
245.
246.
247.
248.
249. 4.2 For the company.
1 An issue of self-assessment framework confronting the Malaysian
organizations is that they are left with no decision however to prepare or
enlist a tax proficient for them to have the capacity to consent to all the
principles and controls stipulated by the Internal income leading body of
Malaysia.
250.
251.
252.
253.

4.3 Recommendations

254.
255. After conducting the research for the downsides of the selfassessment system problems I personally recommend the Malaysians to the
following in order to improve the self-assessment system the government should
upgrade training programs for the tax authorities and also for the people taxable
so they will be more literate about the system and how to use it more efficiently.
More surveys should be conducted by the government to find out the areas
where the system is having errors and how the community feels about
it.conducting surveys will give them chance to boost the system and make it
more effective.
256. Another way to improve the system is by making the system more
friendly to the taxpayers maybe by giving guidebooks printed along with the
return form showing how to fill it and so they might be able to fill without
conceding with tax professionals all the time

257. 5. Conclusion
258. All in all, the income of the companies and individuals is tax
liable if it is derived from or accrued in, or remitted to Malaysia. Nonetheless,
income remitted to Malaysia by resident companies (except for companies

25

performing the business of banking, insurance, air and sea transportation), nonresident companies and non-resident
259. individuals are tax exempted. With effect from the year of
assessment YA 2004, income remitted to Malaysia by a resident individual is
tax exempted. In my opinion, the tax system of Malaysia is very wellestablished, and the tax rates are relatively fair. Moreover, the system provides
reliefs, rebates and expenditure allowances that help to mitigate the tax payable
for both individuals and companies.
260.
261.
262.
263.
264.
6. References
265. Tiley, J., & Loutzenhiser, G. (2012). Revenue Law (7th ed., p. 4). HART
publishing.
266.
267. Karpayah, M. (2012, February 1). Your responsibilities as a deemed
employer.

Retrieved

March

23,

2,

from

http://www.rsmi.com.my/WebLITE/Applications/productcatalog/uploaded/
docs/RSM RKT on MGCC Quarterly Magazine - Your Responsibilities as a
Deemed Employer.pdf
268.
269. Kwai Fatt, C. (2012). Malaysian Taxation : Principles and Practice. Info
World.
270.
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271. LEMBAGA HASIL DALAM NEGERI INLAND REVENUE BOARD PUBLIC

RULING EMPLOYEE SHARE OPTION SCHEME BENEFIT. (2004, December
9).

Retrieved

March

19,

2015,

from

http://www.hasil.gov.my/pdf/pdfam/PR4_2004.pdf
272.
273. Capital expenditure. (n.d.). Collins English Dictionary - Complete &

Unabridged 10th Edition. Retrieved April 05, 2015, from Dictionary.com

website: http://dictionary.reference.com/browse/capital expenditure

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