Accounting audit
There are two types of accounting standards: MFRS (Malaysian Financial Reporting Standard), which is the same accounting standard as international accounting standards, and MPERS (Malaysian Private Entities Reporting Standard), which is a version of SMEs. Many Japanese companies are closed companies that are not publicly traded, and in many cases they choose MPERS.
All companies and branches of foreign corporations are required to conduct an annual audit, and the audit report is submitted to the Malaysian Corporate Commission (CCM) through the company secretary.
Tax affairs
01 /
Corporate tax
Basic tax rate : 24%.
SMEs have special measures, with a tax rate of 17% up to the first 600,000 ringgit of taxable income and 24% above that.
Will be done. SMEs are not controlled by companies with paid-in capital of RM2,500,000 or less and paid-in capital of more than RM2,500,000.
A company with annual sales of RM50 million or less
Taxpayer classification : There are resident corporations and non-resident corporations, and the judgment is based on the management and control of the business (for example, the intention of the board of directors, etc.)
If the decision is made in Malaysia, it will be a resident corporation, otherwise it will be judged as a non-resident corporation.
Fiscal year : Calendar year is the standard, but different fiscal years can be selected
Declaration / tax payment : Submit the final tax return within 7 months from the fiscal year end
There is an estimated tax payment (monthly advance payment) system, and companies estimate the annual corporate tax 30 days before the start date of the business year and estimate the amount.
Make monthly prepayment based on
Taxable income : Domestic source income is taxable
Depreciation : The concept of depreciation for accounting and depreciation for tax purposes is different, and for tax purposes, only tangible fixed assets stipulated in the tax law are capped.
Tal allowance (tax depreciation) is calculated separately and deducted. For buildings, only industrial buildings
It is possible to account for capital allowances. Due to policy, special depreciation system for some assets (computers, etc.)
There is
Loss carryforwards : Starting in 2019, the loss carryforwards are limited to 7 years.
02 /
personal income tax
Basic tax rate : Progressive tax rate of 0 to 30% for residents
30% of non-residents
Taxpayer classification : Resident → If any of the following requirements are met
Stayed for 182 days or more in the current calendar year (whether working or not)
b. The current calendar year is less than 182 days, but stays for 182 days or more from the previous calendar year or consecutively in the next calendar year
c. 90 days or more and less than 182 days in the current calendar year and have been resident for 3 years out of the last 4 calendar years or have been overdue for 90 days or more
In
d. If you become a resident in the last 3 years and the calendar year immediately after
Non-resident corporation → Non-resident. Non-residents are exempt from tax if they are 60 days or less in the calendar year
Tax year : calendar year
Declaration / tax payment : Submit the final tax return by the end of April of the following year (May 15 in the case of electronic filing)
With regard to salary income, the employer collects tax withholding monthly and pays taxes.
Taxable income : Domestic source income is taxable. If you work in Malaysia, even if you receive income abroad, Malaysia
Those caused by employment are subject to taxation. In-kind salary (house, vehicle, etc.)
Income deduction : Basic deduction, spouse deduction, dependent deduction, medical expenses, insurance premium, lifestyle deduction, etc.
03 /
Sales and service tax (SST)
Sales tax : The basic tax rate is 10% for products manufactured in Malaysia and products imported into Malaysia. Tax exemption measures for groceries, etc.
There is a place
Service tax : The basic tax rate is 10% for services provided in Malaysia and services imported into Malaysia. Taxable vs.
Elephant services are listed in a limited way
04 /
Withholding income tax
If a non-resident corporation earns the following income, the Malaysian resident corporation that pays will withhold and pay it.
Dividend : Tax exemption
Interest expense : 15% (10% due to tax treaty application)
Royalty : 10%
Construction / service contracts with non-residents: 13%
Service provision (provided in Malaysia), movable property rental, etc .: 10%
(Reduced tax rate due to tax treaty application in Malaysia and each country: Deficit is advantageous for tax treaty application)
05 /
Capital gains tax
Gains on transfer of assets (capital gains) are not taxed except for real estate, etc.
Real Property Gains Tax (RPGT)
Gain on transfer of land, buildings, buildings, or rights attached to them, or gain on transfer of shares of a company (real estate entity) whose assets are considered to be mostly real estate Taxed against
Tax rate: 5-30%
06 /
Stamp duty
Stamp duty is levied on contracts, etc. created for the transfer of real estate or shares, and if the taxable document does not pay stamp duty, the document is not legally valid.
07 /
Tax treaty
The main items of the tax treaty concluded between Japan and Malaysia are as follows.
Reduced tax rate : Interest expense (15% → 10%)
Permanent establishment (PE) : Construction work, assembly, installation work and supervision: 6 months
Agent PE etc.
Others : Short-term resident tax exemption, foreign tax credit, etc.
08 /
Transfer pricing tax system
Companies that have transactions with parent companies or group companies (related party transactions) are obliged to prepare transfer pricing documents.
Transfer Pricing Document Structure: Country by Country Report (CbCR), Master File, Local File
Creation requirements (local file):
Full-scope transfer pricing document → Total sales over RM25 million and total related party transactions over RM15 million
Total financial support exceeds RM50 million
Simplified transfer pricing document → Companies with related party transactions other than the above
