It’s income tax season! I got some questions about how to do income tax in Malaysia, and I *was* going to write one myself, but
I got lazy so many amazing guides already exist so I decided to compile them all for your easy reference.
Check out the resources below, covering all you need to know about income tax in Malaysia whether you are a first-time taxpayer or someone who have been doing taxes for a while but not really sure if you’re doing it right (me). Simply click the links to respective pages to read more.
#1 – For First-timers (Basic Knowledge)
I’m listing here multiple guides and videos suitable for first-timers – between them, you should have a better understanding of the whole income tax filing system in Malaysia.
Opening your account for the first time:
- How to File Your Taxes for the First Time – RinggitPlus
- Income Tax Checklist For First-Timers In 2021 – iMoney
- 2021 Malaysia Income Tax e-Filing Guide For Newbies – CompareHero
- Personal Income Tax e-Filing for First Timers in Malaysia – MyPF
- How to File Income Tax in Malaysia 2021 – Mr Money TV
#2 – Knowing all the tax reliefs that you may be eligible for in 2021
After you learned the basics, now you can optimise your income tax filings so you don’t need to pay more than you should.
- Keep This List Open When Filing Your Income Taxes For YA 2020 So You Don’t Miss Any Claims – VulcanPost
- THIS Is How to Claim as Much as Possible for Your 2020 Tax Refund! – LoanStreet
- How to Maximise Your Malaysian Tax Relief and Tax Rebates for 2020 – MyPF
Reminder to never lie or cheat your income tax filing. If you happen to have bad luck, you might get audited. That’s NOT fun.
#3 – For very specific situations
Read this section if you’re not a salaried employee, or have additional sources of incomes aside from your day job. If your only income comes from your formal employment, you can skip this section.
- Tax Tips For Employees Who Lost Their Jobs Or Get Retrenched – iMoney
- #DigitalCareers: How To File Your Income Tax As A Freelancer – CompareHero
- What Bloggers, Influencers and Freelancers Need To Know About Taxes in Malaysia – David Wang (I co-edited this)
For other additional sources of income:
- How to File Income Tax For Your Side Business – RinggitPlus
- Remember To Claim Your Rental Income Tax Exemption – iMoney
- Active Cryptocurrency Traders Are Required To Declare Their Gains For Income Tax – RinggitPlus (Note: ALL active traders need to pay income tax, not just crypto traders. You trade stocks, trade forex, you pay)
#4 – Financial Tools
How much will you have to pay for income tax? The annoying answer is it depends, but you can do a guesstimate – iMoney has a brilliant Income Tax Calculator that you can play around with to see a *rough* estimate of income tax you have to pay.
#5 – Comprehensive Income Tax Guides
And last but not least, here are more in-depth guides for those who want to learn the different terminologies in greater detail. You don’t *need* to read these comprehensive guides to file your taxes, but they are great for supplemental information.
- 2020/2021 Malaysian Tax Booklet: Personal Income Tax – PwC
- Tax Filing 101 – Multiply by Creador Foundation
- Malaysia Personal Income Tax Guide For 2021 – Money (image below)
#6 – Random things I learned along the way
a) If you have a business (even small scale or side hustles alongside main job), you MUST register it as a company if you want to claim business-related expenses. Depending on your nature of business, you can register as Sole Proprietorship, Limited Liability Partnership or Company.
For many small-scale online businesses in Malaysia, Sole Proprietorship (single owner) or Partnership (more than one owner) is enough, and the cheapest option. According to one tax professional, only consider Sdn Bhd if you make more than RM150,000 per year (can get better tax rate).
b) You may already know that zakat is a type of tax rebate. What you might not know is the receipt date matters – it must be the year before. If you pay zakat and the receipt is dated 2021, you can only use it for YA (Year Assessment) 2022 ie the next year.
Are there any other questions not answered about paying income tax in Malaysia? Let me know in the comments section! Coincidentally I just learned about it in my CFP course, I may be able to answer (or point you to someone who does!)
(If you have overly complicated questions, might as well ask LHDN yourself for the surest answer. Call the LHDN Hasil Care Line at 03-8911 1000 or email them from here)