Frequently Asked Question
When does a sole trader have to declare tax ?
Taxpayers are required to declare their income to the Inland Revenue Board of Malaysia (IRBM) regardless of the amount earned. The due date for submitting tax returns is 30 April every year. If a taxpayer Education Tax /} on their sole proprietorship business, they need to file two separate tax returns – one for the business and one for the personal income tax.
How to submit the tax return of an enterprise or sole trader?
If you’re a business owner in Malaysia, you’ll need to submit your tax return to the Malaysian Inland Revenue Board (LHDN). This can be done online through the e-Filing System, or by mailing in a paper return. Here’s what you’ll need to do:
- Register for an account on the e-Filing System. If you’re submitting a paper return, you can download the forms from the LHDN website.
- Enter your tax data into the system/forms. This includes information on your income, expenses, and any tax deductions or credits you’re claiming.
- Submit your return electronically or mail it in to the LHDN offices.
What is the penalty if a sole trader does not submit a tax return?
If a sole trader does not submit his or her tax return, they may be subject to a penalty from the Malaysian Inland Revenue Board. The amount of the penalty will depend on the individual circumstances of each case, but can be as much as 100% of the outstanding taxes owed. It is therefore important to always submit your tax return on time, even if you think you may not have paid any taxes for that year.
What is the difference between company tax and enterprise tax?
The Malaysian Inland Revenue Board classifies taxes into two categories: company tax and enterprise tax. The main difference between the two is that company tax is levied on taxable income generated by companies, while enterprise tax is levied on taxable income generated by all types of enterprises. In general, companies are required to pay corporate income tax (CIT) at the rate of 17% on their taxable profits, while enterprise tax rate is equal to individual income tax which is 24% or more.