How to File Your Income Tax in Malaysia ( 2022 ver.)

Filing the tax

Version: 中文 & MY


Income Tax Malaysia

Hey, fresher! Have you filed your income tax?

One of the things that we often overlook as fresher is filing the income tax Malaysia. A lot of the freshers have the below misconceptions:

  • “Filing the income tax” is for those who earn more than RM XXX annually.
  • Filing the income tax = Paying the tax
  • Filing the income tax= Troublesome and involves a lot of procedures

But that’s not the case!

First of all, filing the income tax ≠ paying the tax. Thus it’s not something that you only need to do if your “annual income exceeds XXX amount”.

Content:

  1. Who is required to file income tax?
  2. Who is required to pay the tax?
  3. How to file your tax online?
  4. Extra tips: Filing income tax as a foreigner

Who is required to file income tax?

No matter you are self-employed or employed, all income earned in Malaysia, including salary and commission, are taxable. We pay our taxes (cukai, which is tax in Malay) to Inland Revenue Board of Malaysia (LHDNM – Lembaga Hasil Dalam Negeri Malaysia).

Effective since 2015, the law states that an individual employed in Malaysia that earns an annual employment income of RM34, 000 (after EPF deduction) has to register a tax file.

Who is required to pay the tax?

You will be taxable if your annual income reached certain amount. Attached is the income tax rate:

Chargeable Income Calculation (RM) Rate( %) Tax(RM)
0 – 5,000 On the First 5,000 0 0
5,001 – 20,000 On the First 5,000

Next 15,000

1 0

150

20,001 – 35,000 On the First  20,000

Next 15,000

3 150

450

35,001 – 50,000 On the First 35,000

Next 15,000

8 600

1,200

50,001 – 70,000 On the First 50,000

Next 20,000

14 1,800

2,800

70,001 – 100,000 On the First 70,000

Next 30,000

21 4,600

6,300

100,001 – 250,000 On the First 100,000

Next 150,000

24 10,900

36,000

250,001 – 400,000 On the First 250,000

Next 150,000

24.5 46,900

36,750

400,001 – 600,000 On the First 400,000

Next 200,000

25 83,650

50,000

600,001 – 1,000,000 On the First 600,000

Next 400,000

26 133,650

104,000

1,000,001 – 2,000,000 On the First 1,000,000

Next 1,000,000

28 237,650

280,000

Exceeding 2,000,000 On the First 2,000,000

Next ringgit

30 517,650

……….

Does it sound complicated?

Overwhelmed by the numbers? Don’t worry! With the help of advanced technology, you can always file your tax online. What’s better? The system will automatically calculate the payable amount for you! 

What is the minimum salary to pay income tax in Malaysia?

Any individual earns a minimum of RM 34,000 after EPF deductions. It means individuals who earn RM 2,833 per month after EPF deductions from their salary or around RM 3,000 net. The RM 34,000 is not only your income from work but all of your income into account.

How to file your tax online?

First thing first! The due date for submission of Income Tax Return:

  • Individuals without business source: On or before 30 April every year
  • Individuals with business source: On or before 30 June every year

Then, there are some preparations to do in advance:

  • Income Tax Reference Number (No Rujukan Cukai) SGXXXXXXX
  • e-Filing PIN

You can visit the nearest LHDN office to apply for both.

 

resident

You can certainly apply online too. Go to http://edaftar.hasil.gov.my/ to apply for your Income Tax Reference Number. Click “Online Registration Form” (Borang Pendaftaran Online), fill in your details, and log in to your account.

As for your e-Filing PIN, you can go to LHDN’s website: Feedback>Application. Select e-Filing PIN Number Application.

However, the easiest way is to visit your nearest LHDN branch as the staff can assist you with all the applications ~ ~

P.S. The Inland Revenue Board of Malaysia (LHDN) website for filing income tax has been revamped! The following instructions and screenshots are based on the latest version of the website.

 

1. Log in

log-in-form-tax

If this is your first time logging in, please choose ‘Login Kali Pertama’, and then fill in your PIN and identity card number to complete the first step.

  • Step 2: You are required to fill in your basic information, such as D.O.B, address, phone number, e-mail, password, and security questions.
  • Step 3: Your name, identity card number, and Income Tax Reference Number will appear on the screen. Click ‘hantar’ after you confirm your details.
  • If the page shows ‘Sijil digital anda telah berjaya didaftar’, then you can proceed to click ‘Login e-Borang.

2. Choose your tax form

After logging in, you’ll find various tax forms for individuals from different sectors.

Usually, employed individuals will fill up Borang e-BE; self-employed individuals or employers will fill up Borang e-B. If you are a foreigner working in Malaysia, select Borang e-M.

The latest 2022 update of the LHDN website is quite advanced, as you can find the form that you need to fill in at ‘Status borang E-filing’.

choose-tax-form

3. Fill in all the details

Next, you’ll see there are different sections in the form. Here, we fill in the ‘Borang e-BE’ for the employed individual.

In ‘Borang e-BE’, we need to fill in

  • Personal Details (Maklumat Individu),
  • Statutory Income (Pendapatan Berkanun)
  • Tax Deduction/Rebate (Pelepasan Cukai/Tolakan Cukai)

*Pro Tip: Keep all the receipts you used for tax deduction/rebate as you might need to show them to the authorities if you were audited.

One good thing about filing your tax online is that the system will calculate the chargeable income and tax relief, showing you only the payable tax!

Now, there’s no need to mess with your calculator and worry you might get it wrong~

*If you don’t meet the taxable threshold after-tax deduction, the system will show 0 in the payable amount.

tax-form1. First, verify your personal details.tax-information2. Verify your tax information. Make sure to key in your bank account details accurately so that you can receive your tax refund (if any) without much troublefill-in-income-tax3. This is where you fill in your income! Fill in all the information according to the EA form provided by your company. You need to list down if you have any part-time job or rental income~~tax-relief4. This is where you fill in the tax relief! Fill in all the details and leave the calculating to the system! Isn’t this easy peasy lemon squeezy~~tax-details5. Make sure you fill in all the details correctly. On this page, you can view your income, tax relief and the final payable (or maybe not) tax~~~

4. Submit

After reviewing your details, click ‘Teruskan’ under ‘Summary’ (Rumusan), then click ‘Tandatangan & Hantar’ and it will bring you to the ‘Pengesahan Penerimaan’ page. Congratulation, you just finished filing your income tax!

submit-tax-form

Before signing, you can click ‘cetak draf’ to download and save your file.

 

Extra tips: Filing income tax as a foreigner

Foreigners who stay and work in Malaysia for more than 182 days are subject to tax, and they must file and pay their tax to the Inland Revenue Board of Malaysia.

On the other way round, according to the Income Tax Act 1967, only income derived from Malaysia is subject to income tax in Malaysia, while income earned outside Malaysia is not subject to tax. For example, Malaysians working in Singapore file and pay their tax in Singapore; thus there’s no need to file and pay their tax to the Inland Revenue Board of Malaysia to prevent double taxation.

More details:

  • If a foreign company employed the taxpayer and he doesn’t work in Malaysia and only provides services abroad, the income will be considered foreign-sourced. There will be no need for the taxpayer to file and pay the income tax in Malaysia.
  • But, if the taxpayer provides services for a foreign company through mobile or internet in Malaysia, indicating that his/her income was derived from Malaysia, then he/she must file and pay the income tax.
  • If a Malaysian resident individual uses the foreign-sourced income to buy properties and earn rental income in Malaysia, then he/she must pay the income tax.

 

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