Hi guys..
I have this questions:

I have just embarked on a sole proprietor business in Malaysia. I have a few questions which I hope some of the experts out there can help to answer:
1) What are the tax forms that I would need to fill up next year?
2) What are the type of deductions that I can use as my business expenditure? Can I use:
i) Housing loan - I'm using my current house as the business premise
ii) Car loan - I'm using my current car as my business mode of transport (to deliver the goods). What if the car i already bought earlier?
iii) Parking tickets, petrol and tolls - I incur all these costs when i deliver the goods
iv) Entertainment - Once in a while, I will have to take my clients out for dinner.
v) Any other things that's considered as business expenditure? (Electricity, water bill)?



This post has been edited by izdyharz: Jul 10 2011, 02:49 AM

Pls anybody.. help~

u may check this out: http://forum.lowyat.net/topic/371316

1)Form B, u have to register with IRB and show your business license, IC et

2)
(i) Not allowed
(ii) Not allowed
(iii) allowed
(iv) not sure about sole proprietor, if sdn bhd treatment is 50% allowable
(v) Electricity, water bill, telephone bill etc

1) Form B to be submitted before 30th June each year.
2i) If the house if not under your business name then no. However if you may issue rental paid to yourself. So in your form B you may have net rental income which can deduct against your quit rent and assessment bills.
ii) Only if your the car is under your business name. It'd be treated as Capital Allowance (Hire Purchase) if it's under your business name.
III) All those travelling related expenses are de ductible depending on the nature of your business. Eg, transport companies would be subjected to high portion of deduction.
iv) To play safe, deduct only 50% for any entertainment expenses.
v) Preferably to take in portion of those bills under your business expenditure. These things are quite subject to argument should you need to confront to tax officers..

(Diclaimer : Advices are just based on personal experience. Not a tax agent btw)

Hmm I called LHDN just now item ii) she said that if my business nature requires a car for example if im running
delivery company or something, then it can be treated as capital allowance. Since im doing IT consulting as freelance and
I told her that i need a car for me for transportion purposes and i cant do my business without a car she still say
cannot. I might be eligible only for petrol, and tolls.

Parking and tolls claims - write down your client name on the receipts and if possible the invoice number and date for future reference.

Petrol, water & electricity - i would suggest u only to take 50% of this expenses as your business expenses, as you could also use this for your personal use also.

Entertainment if possible write down your customer name also on the receipts.

Get this book :
Richard Thornton - 100 Ways to Save Tax in Malaysia for Small Businesses

For your case logically speaking your car loan should be entitled under CA. Since you are an IT Consulting, perhaps you can use your deskop/laptop to serve under your capital allowance, if you've taken your computer relief under personal relief..

Is it possible if put my car maintenance service, and also tyres that i just changed because those tyres no longer safe to use as expenses?

1) Form B to be submitted before 30 June 2012. (Make sure you have your tax reference number. It will be the same assuming you have a tax file with IRB)
2) i) Housing loan - This will be a deduction if you have purchased the property between 2009 and 2010.
ii) Can possibly claim capital allowance but would have to less 25% for personal use. Also, the qualifying expenditure would be up to RM150,000 but if the vehicle is above RM150,000 then the qualifying expenditure is RM50,000. This is based on the instalments paid todate, not the full purchase price.
iii) These are allowable
iv) Only 50% unless you give them gifts with your logo on it.
v) Only if you have a fix business premise, otherwise I doubt you will be able to apportion the costs yourself.

Please bear in mind that if IRB finds that the claims are not reasonable, it will be added back and there is a penalty of 45% above it.

Hope this is of help to you.

Usually for expenses that u use for personal and business, u need to apportion it.

1) Form B
2)
i) For house office, interest should be deductible but not the whole amount since it is ridiculous that you use the whole house as office. use some rationale to apportion the interest expense. Or else use the Rental Income method as suggested, then deduct the interest expense in the calculation. The rental should reflect the current market price
ii) As long as the car is used for business, capital allowance can be claimed. It is not necessary that the car is registered under the name of the business. you have bought the car prior to the business operation, determining the car cost is an issue
iii) all allowable
iv) it is advisable to claim 50% only and record down all the details of the expense
v) deduct certain portion of it only or include it inside the rental charges

for item i) and v) you need to use some rationale to determine the amount, it should be reasonable

Hi expert, for

iii) is it credit card bill accepted or need to get bill from petrol station it self

same

---

Added on February 28, 2012, 4:26 pmi) Housing loan - I'm using my current house as the business premise - ADD BACK 30% INTEREST EXPENSES
ii) Car loan - I'm using my current car as my business mode of transport (to deliver the goods). What if the car i already bought earlier? - IT IS BEST TO LEAVE THIS ONE OUT
iii) Parking tickets, petrol and tolls - I incur all these costs when i deliver the goods - ADD BACK 1/3
iv) Entertainment - Once in a while, I will have to take my clients out for dinner. - ADD BACK 100%
v) Any other things that's considered as business expenditure? (Electricity, water bill)? - ADD BACK 1/3

I SUGGEST YOU TO WORRY LESS ON ALL ABOVE MENTIONED EXCEPT (I), (III) & (V)...
KEEP NOTE ON DIRECT COST...

This post has been edited by scottlwt: Feb 28 2012, 04:26 PM

Just wondering, I don't have to care about all these if I'm hiring an creative accountant to help me, right? He should know all these, right?

My accountant charges me RM300+ a year for my business tax return service. I just leave it to him to do everything. No headache.

Ur accountant teach u how to save tax or not?

True. I paid RM650 for the tax accountant service each year. This fee also can be used as company expenses. Tak pening kepala.

---

Added on September 27, 2012, 9:50 pmin my case, YES!

This post has been edited by Stamp: Sep 27 2012, 09:50 PM

I call few accountant, either they are very conservative in taxation or not really clear about the "right" of tax payer.

Any suggestion from your accountant advice?

Of course. Otherwise why I paid him for.

Can pm me the acountant contact?

u need a tax agent instead of accountant ..

you register as sole proprietor with ssm using your home address as business address?

Home address. No physical business address and if need meeting only go to customer address

anyone have any contact for tax accountant ? please pm me..thanks!

need a good contact of tax agent too. anyone has one?

If I have registered a business as a sole proprietor but the company is dormant, do I still need to fill in any tax form?

ya inactive sole prop company does u need to create the tax number a t LHDN once you register?
any advice?

1) Form B, due date 30 june
2)i) - apportion out the INTEREST only. eg. your house has 3 rooms, ur business assume to use 1 room. so its 1/3, it depends how you explain to the tax officer. paying rental, messy because its another source of income and another set of computation need to show tax officer when they audit you.
ii) Messy, unless you get yourself and accountant or tax agent. because of the hire purchase, CA claim rules etc etc.
iii) Parketing ticket = as other forumer said, identify them, then its 100%. if you are lazy to do so, just claim 2/3 of it as business use, 1/3 as personal use. same goes to toll.
as for petrol, sorry to say theres no 100% for you, max 2/3 is for business 1/3 for personal use. IN ADDITION, you can add in upkeep for your car, well same 2/3 biz use 1/3 personal rules apply too.
iv) this 1 ar....to be safe, dont add lor.... if you really want then 50% max, dont 100%... because entertainment is too general in the eye of LHDN.
v) yes, electricity bill of your house. but same rules apply here, apportion according to % as your rental or loan interest.

If i work few month last year as employee from other company and few month in sole proprietorship.
Is it the same form and same due date?

as long as you have business income, you are consider Form B and due date 30th June. if you are doing E-filing is easier since all you need to do is click on Form B instead of getting the physical form B

any place to get hte guideline for the balance sheet?

Example if entertainment 1000, 50% is 500, the other 500 in the non "something" expense?

Because need to balance the account per usage?

Anyone can help me on this?

Same question.

If the drinks and dinner bill is RM1000, just direct file it as rm500?

Another thing, if sponsor a gift to a company's annual dinner, can file under entertainment?

Will be classify as "Gift and donation", but it will only entitled to claim tax deduction 50%.
However, cash sponsor will be fully add back.

oh okay:) so entertainment (food and drinks) and sponsorship/gifts will be 50%.. thanks!

hi anyone care to advice,
if u purchase equipment
to operate the business
does the equipment can use in expenses category to offset the revenue?
any best advice how you guys reduce the tax?

Accounting Principle/Base and Tax Principle/Base should be book separately. Normally those tax not allowable or 50% allowable will be add back when doing tax computation.

So you can still book RM1000 as entertainment expenses. But during tax computation, RM500 will be add back.



For equipment, in P/L will treat as depreciation. But for tax purpose, will be Capital Allowance which had fixed by tax law.

The best tax saving is to fully utilise the tax benefit and avoid those non allowable tax deduction. Please refer to Tax Consultant for more detail. Every business are unique and treatment are different.

The tax law is as thick as dictionary.

hi all
refer to
http://www.hasil.gov.my/goindex.php?kump=5...it=5000&sequ=12

Payment of telephone bills
can these claim as expenses as it stated not allowable as personal expenses but business will use mobile and broadband??


as for Annual Allowance under capital allowance
computer stated 40%
how to calculate??

Hey guys, I was just wondering, when starting a sole proprietor business, do we need to register anything for tax purposes? Any procedure required? Or basically just fill in a different form (Form B as mentioned previously in this topic) only when it comes time to perform e-filing of tax? I already have a personal income tax account used for normal employees (working for others).

hi all
if purhcase a photostat machine
which already claim 20% on initial capital allowance
is there a annual capital claim allowance 20% allow on the equipment?
anyone can share?
do i need to depreciate the market value for the equipment by 20% ?
what's the maximum year i can claim?

When I studied Tax more than 15-years ago, in the first year, there should be Initial Allowance and also Capital Allowance. Rate depends on type of machinery purchased. For Office equipment, the CA should be 20% and AA at 10%.

Refer here, TLDR for me.

http://www.kpmg.com.my/kpmg/publications/t.../a0053sc003.htm

As for your own Depreciation, if the AA is 10%, then u should depreciate over 10-yrs.

But, why Buy when u can rent?

thanks for your detail
so if sale of equipment after 3 year usage
does it consider an taxable income
or should put in as owner drawing?

Yes, there may be some taxes in form of Balancing Charge / Balancing Allowances if u have claimed Capital Allowance previously and dispose of the Asset. Refer to the section called Balancing Charge / Balancing Allowances in the link above


Btw, to correct my earlier, post Initial Allowane (IA) at 20%, Annual Allowance (AA) at 10%.

Exampple on how to calculate Balancing Charge / Balancing Allowances

http://www.iras.gov.sg/irasHome/page01.aspx?id=9254

http://ctim.org.my/PDF/Technical/Minutes%2...%20Part%20C.pdf

http://www.christopherheng.com/index.php?mid=1783

http://www.kpmg.com.my/kpmg/publications/tax/tm/chapter3.pdf



This post has been edited by cfa28: Mar 17 2014, 02:01 PM

Hey guys,

Need advice regarding my situation.

I registered the company on Feb 2013, company starts to have income on July.

1) Let's say,

Sales : Up to 35k
Expense(not including salary) : 16k

Now the problem is, I have been giving myself salary RM5k a month, and all my company expense I use the CASH/CC from my salary, I do keep the receipt but never claim back from my company.

So my company current account the only cheque i issue is for my monthly salary.

How ah?

2) So the above I submit Form B, how bout my monthly "salary" to myself, still need to pay tax for personal income ah?

Tqtq

Anyone? haha

I would like to ask I bought a printer recently for my sole proprietor business. Total price is RM170. Can I just deduct directly as an expense or do i need to do it as reducing balance asset?

Anyone can advice the tax rate for sole proprietor

The amount is small. Just deduct directly as an exoense.

You need to list down your expenses and claim from company.
If only salary, you may pay high tax and sole proprietor, salary may add back for tax calculation.

Hey thanks for the reply man.

So the 5k per month now I'll just make it as Claim + Salary.

Yeap.

if they catch u then u in big trouble...

i think for sole proprietor , B Form online quite easy to fill, just pay your self salary that will be your income + your business net profit , profit may be minus means negative profit. To calculate profit do the usual accounting way

minus all the things allowable such as sport eq, pc, full med check up, books, donations, children etc

then the form will calculate for u

hi klthor
I have just submitted the form B for 2013 and just found out that there is some sort of "capital allowance" relief but I did not include it. Please tell me more how to calculate and can I claim these relief in. 2014?

Thanks

too bad to hear tat, capital allowance would be CA. as i have mention, if ur asset is under hire purchase i would advice u to get an tax agent or accountant becoz it is very messy to calculate CA for under HP.

if u know how depreciation works, CA is actually the same thing but the % is fixed by LHDN and an additional initial allowance (IA) 20% for almost every class of assets.

for example, computer annual allowance(AA) is 40%, you buy a pc for 4k

1st year total CA = IA 20% + AA 40%
4k x 20% = 800
4k x 40% = 1600
total year 1 CA = 2400

2nd year total CA = AA 40% only, no more IA
so its
4k x 40% = 1600

so ur accumulated CA claim = 4k for second year and fully claimed ur CA for ur computer.


**** there are certain rules applies to motor vehicle and property can not claim CA unless u r a manufacturer.

This post has been edited by klthor: Jul 7 2014, 09:39 AM

hi Klthor,

Thank you very much for your reply. So, as mentioned I have missed out the 2013 CA claim. Means I have not fully claim, so can I claim it in 2014?

Beside PC where can I get the information how much AA for other asset. Ex. Office equipment, furniture and fittings etc.

hope u don't mind me long winded .

Thanks again!

i have never deal with tax which miss the CA 1st year, however u can still claim it in subsequent years but NOT 2013 CA + 2014 CA, its just a delay meaning u will fully claim ur CA one year later.

as for the rates, i suppose u can obtain them from LHDN website. but generally other than computer equipment, most of the asset AA is 20%. besides, u have to be careful when claiming CA not all assets can claim CA. i will just point out a few, things like renovation will be tricky as well as motor vehicle and motor vehicle on hire purchase will be tricky too, and property eg. shoplot is not qualified to claim.

I have a situation here. Hopefully some experts could help..
Ive started a partnership business in 2013 and I am also getting salary of 6k from this company as I work full time here. I'm trying to minimize payable tax(I guess everyone here is right??). FYI, my company isn't profitable yet. Question:

(1) Should I submit April or june tax form?
(2) I need to apply housing loan. Should I buy it using my salary or should I buy it under my company?
(3) Can I not pay tax for my 6k salary because my company is still not profitable yet?

Thanks in advance! Anyone with the same situation, pls advise me..

For PC/Laptop we can choose to claim under personal tax relief, max 3000 every 3 yrs

Of cause if you purchase > 1unit, then sure will need claim under business capital allowance.

Bro, is better to get a Tax Agent/Accounting Firm to help u do you in tax filing next year.
If we file wrongly LHDN may penalty us and audit in & out. Don't play a fool with LHDN.

guys,
can coffee bean mark as expenses ?

reason for purchase?
and your nature of biz?

servicing industry
meeting client

as a gift to your client should be deductible.
but I can't remember if its 50% or not.

Since you have a business income, you should submit form b at June

Do your company have "nice" record? Profit, cash flow?

If you declare your business income, after deducting all your expenses and reliefs, and still have income, hen will subject to tax

Sorry for necromancing old thread,

just want tumpang tanya any experienced tax agent contact?

Wanna ask, now I'm under employment and running another sole proprietorship alone. Income from business not much and I don't think I subject to pay tax so far. But I submitted my BE form instead of filing B form. What should I do now?

Call lhdn to submit another B form?
Or just let it go and submit B form next year?