QUOTE(lucifah @ Nov 22 2006, 03:25 PM)
OK. this thread is not for the faint at heart.
This thread serves the purpose to help those with an annual income exceeding RM70,000 or businessess where you can't alter your profit or loss
the question:
How do I reduce my income tax?
Of course, some of my ways would be:
1. Increase expenditure
2. Buy lots of assetts - vehicles h&p, building s&p, etc
3. Pay high salary to "family employees"
4. pay zakat
5. computer - rm 3,500 insta-rebate (sadly, every 3 yrs only)
any of you got any more ideas? i do hope LYN hs some real accountants / editors who can share their thoughts on how to reduce the taxes without breaking any law
computer is rebate RM500 every 5 years
r u seeking tax planning for individual or company?
For company, if the paidup capital is less than RM2.5million, the first Rm500k is taxable @ 20%, so for small company u r advisable to limit up the paidup capital.
U can appoint ur family members as directors as well by paying them directors fees,
hence the EPF rate can be increase from 11% to 19%.
Ur company can frank/issue dividend to directors by using retained earnings, distribution in specie as well. Hence ,the profit of ur company can be spread over to other directors who will be taxed at individual rate. By franking dividend, u have to make sure that there is enough S108 dividend credit in ur company account,else there'll be S106 penalty .
By paying dividend, the recipient can claim S110 set off (rebate at tax payable) @ 28% ,hence the possibility of getting tax refund is high if ur tax paybale rate or marginal rate is lower than 28%
there's more to go...