The Inland Revenue Department (IRD) will open the tax return for people in March every year and people are urged to file their tax returns on time!
It is the duty of every Malaysian citizen to file tax returns, as long as you work or do business in Malaysia, you are required to file tax returns! Under the Malaysian Income Tax Act 1967, it does not matter if you are a Malaysian citizen or a foreigner, as long as you live 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 between filing and paying tax. Actually, filing and paying tax are two different things. Filing a tax return is only presenting your financial status for the past year to the government, while paying tax is handing over the tax on your income to the government.
Employer tax returns must be completed by March 31, while working people who are not in business have until April 30 to file their tax returns. In addition, those who are in business have until June 30 to complete their tax returns.
Taxable income is the annual income less tax deductions that can be collected. For the tax year 2021, the tax rate for taxable income between RM50,001 and RM70,000 is 13%. The Inland Revenue Department has also labeled each taxable income group as A to L.
Taxable income (Pendapatan Bercukai) is calculated as follows
Taxable Income = Annual Income – Deductions – Deductions
Pendapatan Bercukai = Yearly Income – Pelepasan Cukai – Potongan Cukai
Here you will find the personal income tax rate table for tax year 2021 (the tax table to be used for 2022 tax return).
