The Advantages Of Incometax Filing Services In Malaysia

 

With income tax filing services you can get professional guidance, it’s that time of year again when tax records land in our mailboxes, and advertisements for tax software litter our email inboxes and social media feeds.

If you’re wondering whether you should do your taxes or hire a tax professional, the answer is, it depends on your situation. Usually, the more complicated your return, the better off you’ll be going with a specialist.

In Malaysia, there are different types of taxes such as Personal Income Tax, Corporate Income Tax, Sales and Service Tax, Customs Duty, Local Tax, and Goods and Services Tax (GST). While taxes are involuntary fees, there are numerous advantages following the implementation of taxes. Some of the advantages are funding government investment, funding for the nation’s development, and distribution of wealth among citizens.

Firstly, taxes received by the government can be used to fund the government’s expenditures to run the country. The expenses include paying the salary of government servants to give services to the citizen. Some of these services are like medical service (doctors, nurses, and pharmacies), army, police, firefighters, judges, as well as professors like teachers and school administration. On top of the salary, the taxes also pay for the operational expense of running hospitals, schools, federal roads, government offices, etc. including paying for the country’s monarchs and politicians to run the federal governments.

As income tax can be important for your income, it is quite natural to think about the advantages of income tax and filing returns for the taxpayers. If you are wondering the same, here are some advantages of income tax filing services you should know about-

Address proof

One of the important advantages of income tax is that the tax assessment documents work as address proof. There are various documents such as passport, visa application, license, etc. You are required to present address proofs. Standard proofs like ID cards are usually not valid for such documents. Your income tax documents can be used in such cases.

Nation-building

Taxes is one of the key sources of income for the government, the money collected in the ex-chequer is used for building infrastructure and other development activities. The government spends the collected money on defense, healthcare, infrastructure, education, and launching several schemes for the masses.

High-value investment

High-value investments like buying a property are reported to the IT department. When you pay taxes and file returns, these transactions can be recorded and substantiated as per your income. As you can see, there are many advantages of income tax filing and paying income tax. Play your role in nation-building and experience all the other advantages listed above by knowing your tax liabilities and paying them on time.

Anyone can prepare their own return. Some people prefer to handle income tax filing on their own no matter how challenging their tax situation gets. But just because you can doesn’t mean you should. The tax professionals may be able to prepare your return in a fraction of the time you would take to prepare it yourself. The experts might reveal deductions, credits, or other tax strategies you aren’t aware of that could significantly reduce your tax bill.

Bispoint Group gives complete business and financial resolutions for small & medium-sized enterprises in Malaysia (SMEs). We offer a full range of services, including company registration, accounting, income tax filing services, SST compliance, and financial due diligence. With expertise, our team of highly skilled professionals offers swift implementation of solutions. Currently, we have more than 70 dedicated teams including Chartered Accountants, managers, supervisors, and junior associates in our offices to serve more than 1000 private companies.​​

 

The Procedures For a New Company Incorporation in Malaysia

 

New company incorporation in Malaysia and opening of its corporate bank account are straightforward methods, which can be co pleated in five weeks. Our client will not have to travel anywhere, provided that a Power of Attorney is issued to the Malaysia incorporation agent who will then complete all procedures on his behalf.

Company formation in Malaysia

Foreign investors seeking to do business in Malaysia are allowed to set up any of the following entities-

1. Private Limited Company (Malaysian- Sendirian Berhad or Sdn Bhd)

2. Foreign Company

For formation and incorporation, a company in Malaysia can establish a Private Limited Company (Sdn Bhd). This authorized entity requires a minimum of one shareholder and at least one resident director. Stockholders are solely responsible for the extent of their contribution to the capital. An Sdn Bhd can only have a maximum of 50 shareholders and its company shares are not liable to the public.

Foreign investors who own existing businesses abroad and want to build a local branch in Malaysia for local services or back-office purposes can set up a Foreign Company. This kind of entity doesn’t require a resident director.

Requirements for setting up a company in Malaysia

Proposed company name

Foreign individuals must reserve a company name with the corporate registry, the Companies Commission of Malaysia (SSM), to register a business. They are advised to prepare at least three alternative company names in case their first option is already taken or denied due to several reasons such as the proposed name is already reserved, offensive contains restricted words, or closely resembles a registered company name/s.

Shareholder/s

At least one shareholder is needed for Sdn Bhd. Shareholders can be a body corporate or an individual. Sdn Bhd can only have a maximum of 50 shareholders. The Malaysia Companies Act of 2016 allows sole individuals to register an Sdn Bhd. They can be the just shareholder and directors of the company.

Director/s

For Sdn Bhd, at least one resident director is needed. Such an individual must not be a disqualified director under the Companies Act (i.e., under 18 years old, bankrupt, or convicted of any offense).

Corporate secretary

Those seeking to incorporate an Sdn Bhd must designate a Corporate Secretary within 30 days of incorporation. To be qualified to consider the role, the Corporate Secretary must have a primary place of residence in Malaysia and requires to either be licensed by the SSM or be a member of a professional association appointed by the Ministry of Domestic Trade and Consumer Affairs.

What to do after company incorporation in Malaysia?

After successfully incorporating a company, the business owner must apply for necessary business permits or licenses before starting services. The particular documents required may vary depending on the nature of business activities, industry, and/or business location. Additionally, business owners are obliged to open a corporate bank account and designate auditors from a list approved by the SSM. They are also required to make yearly reports to SSM. The Companies Act requires yearly returns to be made within 30 days of the anniversary of incorporation.

There are also additional corporate compliance necessities associated with income tax, Sales and Services Tax (SST), Employees Provident Fund (EPF), social security, and many others.

What you need to know about transfer pricing services in Malaysia

 

If your firm is doing business in Malaysia, it is crucial to understand the local transfer pricing services rules and practices. Here, we briefly explain these things.

The territorial taxation system, the efficiency of doing business, and a wide pool of bilingual talent make Malaysia an attractive place for MNEs. In addition, Malaysia has a convenient location- around 60% of the world’s population lives within a 5-hour radius. Yet, unlike other regional hubs, such as Hong Kong and Singapore, the Malaysian economy is still quite “local.” Agriculture and tourism are huge contributors to the Malaysian economy; but the main driver of the economy is the trading of commodities such as palm oil, crude oil, and rubber. This, in combination with the fact that Malaysia has several tax jurisdictions within its territory, results not just in international but also in domestic transfer pricing rules.

The Malaysian Inland Revenue Board (IRB) has no specific focus areas when it comes to transferring pricing. Instead, the IRD usually targets a particular industry for a specific period – it is easier to focus on companies with similar issues. Having said that, tax audit activity has surely increased in Malaysia. Even more so after the creation of the new Multinational Tax Department. And most multinational tax audits in Malaysia include a look at your transfer pricing strategy.

What are your transfer obligations in Malaysia?

General documentation requirements

Malaysia has well-defined and comprehensive transfer pricing documentation requirements. Transfer pricing documentation should include records and documents describing-

The organizational formation, including an organization chart covering persons involved in a controlled transaction.

The characteristics of the business or industry and market circumstances.
The controlled transaction.

Plans, theories, and data regarding factors that inspired the setting of any pricing policies.

Comparability, functional, and risk analysis.

Selection of the transfer pricing method.

Application of the transfer pricing method.

Documents used in improving the transfer pricing analysis.

Index to documents.

Any other report, data, or document considered relevant by the person to determine an arm’s-length price.

All relevant documentation must be provided in Bahasa Malaysia or English.

It is not needed to submit transfer pricing documentation when filing a tax return. However, the documentation must be made obtainable to the IRB within 30 days upon request. It is expected to keep the documentation in the administration for a period of 7 years.

Master file / local file

Malaysia has introduced the OECD three-tiered approach on transfer pricing documentation. Taxpayers that are to make the Country-by-Country Report have to also prepare a Master File and present it together with conventional transfer pricing documentation upon request by the IRB. The requirements to the Master File are very similar to those appointed by the OECD in Action 13. There is no requirement to prepare a Local File in addition to the general transfer pricing documentation requirements.

What penalties do you risk when not complying with the rules?

There are no particular penalties for transfer pricing but the following penalties given in rates of tax payable apply-

If there is no contemporaneous transfer pricing documentation: 35%

If transfer pricing documentation is prepared, but not according to the guidelines: 25%

Different penalties use when you prevent or interfere with a transfer pricing audit or when you fail to comply with the arm’s length principle after previous transfer pricing audits. The penalty is then increased by 20% as compared to the last penalty rate imposed. But the sum cannot exceed 100% of the amount of tax undercharged.

Bispoint Group gives complete business and financial resolutions for small & medium-sized enterprises in Malaysia (SMEs). We offer a full range of company secretary services in Malaysia, including company registration, transfer pricing services, accounting, tax, SST compliance, and financial due diligence. To know more details please visit our official website.   

Tips For Choosing a Top Company Secretarial Firm

How do you choose a top company secretarial firm? The secretarial service providers are aplenty. With such intense competition, clients usually benefit the most. In addition to being able to compare prices, and having higher “bargaining power”, you can also easily switch between various company secretarial firms.

Just like making any core business decision, it would be better to know and understand first – what is your company requirement, or what do you need? Thereafter, you may consider the following factors-

Price and services offered

Price is always a consideration! What you should also know though, that it is not the single factor to use to filter through the different service providers available. This is because the roles and responsibilities of a company secretary are different. It can range from basic compliance like meeting just the statutory requirements and annual returns filing, to ongoing compliance and filing requirements such as updating of company particulars, directors or shareholders, etc.

Sadly, it is not uncommon for firms to rate their services attractively at a very low price, and then have a lot of extra and add-on charges after the company secretary appointment itself. On the other hand, companies that charge a high price do not certainly mean all bases are covered, and what they offer is better than the rest. They may be priced with a premium, but give the same baseline services only.

Preferably, in addition to comparing rates, you should also look for what is provided, for that price. Here’s a quick review of what to look for when comparing prices-

Are annual returns filing fees included?

Are there separate charges for updating company information, officers, or shares?

Is there an early cancellation fee?

Is there a company secretary transfer charge?

How much is the renewal fee?

Timeliness and reliability

The company secretary should be monitoring the filing due dates and respective deadlines of the company. He or she must be fully aware of the company’s annual compliance matters. Late filing not only results in fines and penalties but may also have implications for the director of the company. This is because the main duty of the company lies on the director.

Is your company secretary forgetful? Has there always been a late filing penalty – which can be easily avoided by timely filing? You’d want to look for the top company secretarial firm that is reliable, prompt, and timely in the filing.

The responsibilities of a company secretary play a significant role in the company. Role of company secretary in company law commands over the stable functioning of the administration process in a business environment of the company. As it is the top requirement of a company secretary in the country, the responsibility and role are very complicated and need channelized attempts to be displayed in a phased manner.  The top company secretarial firm knows the laws of the company very well and works as a legal advisor for the executives. During the court of law matters, he advises on the company’s rights by taking the deep subject knowledge from the expert.

Bispoint Group gives complete business and financial resolutions for small & medium-sized enterprises in Malaysia (SMEs). We offer a full range of secretarial services in Malaysia, including company registration, accounting, tax, SST compliance, and financial due diligence. With expertise, our team of highly skilled professionals offers swift implementation of solutions. The founding of Bispoint Group is essentially an initiative to restructure our portfolio of services and manpower to serve our clients better. While the firm has a relatively brief history, all our members have more than 10 years of expertise in their respective specializations. Currently, we have more than 70 dedicated teams including Chartered Accountants, managers, supervisors, and junior associates in our offices to serve more than 1000 private companies.​​To know more details please visit our official website.