While Malaysia income tax laws and regulations impose many responsibilities on tax payers, there are also numerous reliefs and incentives available to reduce tax burden in Malaysia. As a tax payer and business owner, you often wish to maximize your business income, a proper income tax planning will help you in reducing your income tax payable.
Although the amount of tax savings may not be huge sometime, the long term savings would surely be worth the hassle. Tax payers should bear in mind that taxes payable can run into huge amounts, it can cost you even millions of ringgit sometimes. Balanced against that, the hassle of spending some time and a comparatively small amount of cash to engage a good tax expert does not seem a tough decision to make.
Although tax avoidance planning is legal, tax evasion — the reduction of tax through deceit, subterfuge, or concealment — is not. Frequently, what sets tax evasion apart from tax avoidance is the IRBM’s finding that there was some fraudulent intent on the part of the taxpayer.
The following are four of the areas most commonly focused on by the IRBM as pointing to possible fraud
- A failure to report substantial amounts of income;
- A claim for fictitious or improper deductions on a return, when no verification exists; and
- Accounting irregularities, such as a failure to keep adequate records, or a discrepancy between amounts reported on a corporation’s return and amounts reported on its financial statements.
We would like to emphasis that Tax Evasion is prohibited in Malaysia. IRBM will imposed heavy penalties (or imprisonment or both) to tax payer if they found out there is any tax evasion activities. Thus, we will not help our client in tax evasion. We believe that as a good citizen, every tax payer shall pay their income tax based on their chargeable income as indicated by Income Tax Act 1967.