It’s a brand new year and it’s time to calculate your total income and tax payable for the past year.
It is the duty of every Malaysian citizen to file tax returns as long as you work or do business in Malaysia! Under the Malaysian Income Tax Act 1967, it does not matter if you are a Malaysian citizen or a foreigner, as long as you reside in Malaysia for more than 182 days in a year and have income, you are obliged to file a tax return.
Many people are confused about filing and paying taxes. Actually, filing and paying taxes are two different things. Filing a tax return is simply presenting your financial situation to the government for the past year, while paying tax is handing over your income tax to the government.
Employer tax returns must be completed by March 31, while non-business office workers have to file their tax returns by April 30. In addition, those engaged in business activities have to file their tax returns by June 30.
Taxable income is defined as annual income minus tax deductions. For the tax year 2021, taxable income between RM50,001 and RM70,000 will be taxed at 13%. The Inland Revenue Department has also labeled each taxable income group as A to L.
Taxable income (Pendapatan Bercukai) is calculated as follows
Pendapatan Bercukai = Annual Income – Pelepasan Cukai – Potongan Cukai
Here you can find the table of personal income tax rates for year 2021.
