Thanks but what to chat and how to negotiate? I work in a public-listed company with hundreds of employees. I don't think the company would "customise" my payroll only.

Guys

I have a sole proprietor company now and wishes to Make it to be a sdn bhd by next year. The problem is this Income tax issue.

Is directors fee tax free or i must declare?

If i were to pay myself a salary, What is the minimum amount for the tax to kick in?

Would it be the company responsibility or personal responsibility to register myself for income tax

your case should be straigth forward as the total yearly tax relief you'll get should be less than RM10K (not considering parents medical bills, medical insurance, education expenses and computer purchase). The overdeduction must be due to your high bonus

IRB have made a statement in the newspaper few months back that companies are to "adjust" tax deduction where employees are now allowed to claim rebates for personal relief every month. Read link below, looks like you have to fill a form.

http://thestar.com.my/news/story.asp?file=...0909&sec=nation

For my case, I do tell the person in charge of payroll for the entire group of companies (we do have hundreds of staff too involving many companies) how much I want the deduction to be sometime mid-year and only last week told her again the final total amount to be deducted (by this I would know my final annual income after taking consideration of dividends from my shares/stocks and can determine the tax I would need to pay). I don't fill any forms as end of the day it is the individual responsibilty to ensure he/she pays the taxes due and not the company.

I always ensure that I overpay as lazy to go make payment later after submitting Borong B. Anyway, IRB nowadays very efficient and we do get back our rebates pretty fast.

Over deducted may be, but it won't be too huge generally, I believe your company HR got somebody handle the PCB part, can seek explaination and clarification for it.

The PCB table has been worked out to match as close as possible to supposed paid tax. It won't go over or short too huge generally. Unless some special circumstance, sudden large bonuses?

Director fee is taxable, every income is taxable (even collected at the roadside, joking only) unless stated wise not.

Min amount? look at the tax bracket table which is easily available in the website.

How about EPF? Would having a director fee only instead of a salary make me exempted from paying to the epf
I'm trying the best i could to avoid paying to the government

My HR Department did send a memo explicating the new PCB system early this year but I didn't really pay attention. What I notice is that my monthly salary has constantly been deducted by a bigger quantum compared to previous years.

I have to seriously strategise my deductible tax with my HR Department from Jan 2010 onwards.


For me, I'd rather prefer I underpay IRB monthly. I don't mind to top up contribution when I submit the income tax form. I can earn interest myself rather than giving it to others.


Frankly speaking, bonus this year is better than last year. But it is not a VERY HUGE one. Also in last year's income tax declaration, I didn't maximise all tax relief items, such as medical insurance, purchase of books and computers, etc.

Over the past few years, IRB also needed to refund me the surpluss that had been over-deducted from my salary. Now my worry is, how efficient is IRB to return me the huge sum which could be 20x higher than last year's amount.

I have a situation here, my ex company owe me few months salary and how should i file in my 2009 tax? should i exclude that and tell them or how? now still waiting the salary from my ex company and it's been 7months+

anyone there could enlighten me on this?

DIrector fee is not subject to EPF contribution if it is paid in lump sum. otherwise, director fee which is paid monthly will be regarded as director salaries and subject to EPF.

For a proper tax planning,
1) Travelling allowance, petrol allowance, housing allowance are exempted from tax and PCB till 31 Dec 2010. (please note that this does not apply to director/ sole proprietor / partner). you may visit LHDN website for details.
2) Benefit inkind for car, handphone etc provided by the company rather than receiving allowance that are taxed and subject to PCB.

---

Added on December 30, 2009, 10:50 pmHow certain are u to get the salary owing by your ex-company? if u are very sure that you would never get the pay, then u don have to declare the income from ex-company for 2009. However, you should declare your income 2009 if u receive any other employment income. Please note that if your ex-company has contributed PCB and deducted from your monthly salary for earlier months that you receive the pay, in order for u to get the refund, you must get a Form EA from this company.



This post has been edited by treble_7: Dec 30 2009, 10:50 PM

Is there any way to circumvent the EPF as my company cash flow is highly unstable and would be unable to pay director fee in one lump sum

So petrol claims, allowance and such are not tax deductible?

Petrol claims, allowances are tax deductible for the company paying such expenses. it is exempted in the hand of individual receiving such allowances, provided they are not the director/ sole proprietor/ partner of the business. please refer to the threshold for tax exemption in http://www.hasil.gov.my/lhdnv3/documents/b...20BE%202008.pdf

but how? if that happens I need to report and tell hasil ppl?

Where does it state housing allowance is not subject to tax?

That ruling is so absurd. Just because i am a director and the only sole work force of the entire company, It makes me un-eligible for tax free allowance and claim?

So how to circumvent this ruling?

The ruling is to prevent people mis-use the allowances and it is specific towards employee benefit not employer.

Because if not, instead of RM10k salaries as a directors post, one can split it into various allowance that are tax deductible which in the end still add up the same 10K, but with more tax deductible allowance, which they don't want people to mis-use or exploit on it.

Thanks for the explanation.

Is there anyway to legally circumvent this issue as my Sdn Bhd is only first year in operation and paying high amount of tax to the govt will deplete my own coffer.

Assuming that i used the PCB calculator and calculated a zero PCB per month. Must i register myself and my company for PCB or just the once a year e-filing would do?

Director is rich enough. Those are for low income group , i.e under employment.

if after computing PCB and is not subjected to PCB, the employer (majikan) does not have to register until there are employees subject to PCB. Efiling submission for Form C is needed only when the company commences operation and you will need to apply for C nombor for company.

I think u will have your tax agent handles on this end.

I am more concern regarding my Personal Income tax though. Will be trying to do it without tax agent as it cost $$.

Directors income tax only need to be submitted in a personal capacity or will it also be the company's affair?

No, it is about personal issue, nothing to do with company. Remember in sdn bhd, company and personal issue is totally separated out even the directors might or might not have shareholding in the company.

I started working Sept 2009. So for this year will I be filling for income tax? Or it will be early 2011?