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 investment return taxable?

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Knight_2008
post Oct 23 2017, 08:38 AM

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Capital gains are not taxable in Malaysia, unless it's your sole source of living income.
Ramjade
post Oct 23 2017, 09:34 AM

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QUOTE(Udon90 @ Oct 23 2017, 08:39 AM)
what does that mean? says my annual return is 100k, I take out few k every month and live moderately, the monthly expense)  become taxable?
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That means you buy at rm1 and sell it off at RM2, you get to pocket the whole rm1 profit without kena any tax.
wongmunkeong
post Oct 23 2017, 02:15 PM

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simple google search for capital gains tax.. hm..
https://home.kpmg.com/xx/en/home/insights/2...income-tax.html

"..Additional capital gains tax (CGT) issues and exceptions

Are there additional capital gains tax (CGT) issues in Malaysia? If so, please discuss?

Other than real property gains tax, there is no other CGT.

Are there capital gains tax exceptions in Malaysia? If so, please discuss?

Not applicable.

Pre-CGT assets

Not applicable...."
cdspins
post Oct 23 2017, 02:19 PM

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Based on my understanding if buy stock, your stamp duty is consider a form of tax... besides dividend return is also tax at company side...
So what you get in the end no longer need to be tax.
jack2
post Oct 23 2017, 02:27 PM

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QUOTE(cdspins @ Oct 23 2017, 02:19 PM)
Based on my understanding if buy stock, your stamp duty is consider a form of tax... besides dividend return is also tax at company side...
So what you get in the end no longer need to be tax.
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Wrong.. Dividends are not taxed at company side but pay on behalf by the company for its shareholders.

Upon dividend declaration, the tax is deducted from shareholders and it is the income for the shareholders and taxable.

By then, the dividends which have been paid by the company is able to offset under S108 against any taxes.
cdspins
post Oct 23 2017, 02:38 PM

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QUOTE(jack2 @ Oct 23 2017, 02:27 PM)
Wrong.. Dividends are not taxed at company side but pay on behalf by the company for its shareholders.

Upon dividend declaration, the tax is deducted from shareholders and it is the income for the shareholders and taxable.

By then, the dividends which have been paid by the company is able to offset under S108 against any taxes.
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Sorry long story short means share holders no need to pay any additional tax right? confused.gif
happyking4ever
post Oct 23 2017, 02:43 PM

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QUOTE(Udon90 @ Oct 23 2017, 08:26 AM)
says I have a mil, put into stock or unit trust, made 500k in return in a year, do I have to pay tax for that 500k? if investment return isn't taxable then everyone do earn big buck should or must put into at least unit trust, coz the return at least offset the tax.
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profit earned from local stock market is not subjected to income tax. anyway you do pay gst on the cost so it is not completely tax free.

normally countries who have capital gain tax on investment in stock market, also offer some kind of tax credit to offset your losses suffer from investment. malaysia has neither of that.

rapple
post Oct 23 2017, 03:44 PM

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QUOTE(jack2 @ Oct 23 2017, 02:27 PM)
Wrong.. Dividends are not taxed at company side but pay on behalf by the company for its shareholders.

Upon dividend declaration, the tax is deducted from shareholders and it is the income for the shareholders and taxable.

By then, the dividends which have been paid by the company is able to offset under S108 against any taxes.
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Did you received any dividend voucher lately?

Did you noticed that there's ZERO taxable income in your dividend voucher?

Do you know Single Tier System it's already effected in 2008?

Next year already 2018, and you still talking about S108 tax credit. doh.gif

This post has been edited by rapple: Oct 23 2017, 03:47 PM
jack2
post Oct 23 2017, 03:50 PM

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QUOTE(rapple @ Oct 23 2017, 03:44 PM)
Did you received any dividend voucher lately?

Did you noticed that there's ZERO taxable income in your dividend voucher?

Do you know Single Tier System it's already effected in 2008?

Next year already 2018, and you still talking about S108 tax credit. doh.gif
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oh my god.. i left this industry almost 10 years. rclxs0.gif
rapple
post Oct 23 2017, 04:16 PM

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QUOTE(jack2 @ Oct 23 2017, 03:50 PM)
oh my god.. i left this industry almost 10 years.  rclxs0.gif
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What industry you have to be in to know this?

S108 tax credit is claim through shareholders PERSONAL TAX submission YEARLY.



cherroy
post Oct 23 2017, 04:41 PM

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Generally, investment return is treated as capital gain, and capital gain is not taxable.

But if a person use the investment tool to trade upon to make a living, eg. a broker trade stock in the market to make a living, then it is considered trading profit, and trading profit is taxable.

Imputation dividend (tax credit system) already became a history.
From 2014 onwards, all dividends are single tier (aka tax exemption in the hand of shareholders) as it is already taxed at company level.

Showtime747
post Oct 23 2017, 05:03 PM

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Knight_2008 is right. Capital gain is not taxed in Malaysia, except it falls under the ambit of S4 of income tax law definition of income

So be careful. If you are a regular trader, then your idea of "capital gain don't need to pay tax" may be taxed under income tax (being assess under carrying on a business). If you thought your capital gain is not taxable, and use the profit to buy car buy house, then IRM may be triggered and you may be at risk.

However, although this is the tax law, I personally have not seen anybody around me kena income tax as a result of trading stock. Or maybe they never tell me they kena audit biggrin.gif

And since we are in this topic, same applies to flipping properties. If your frequencies is high, you will be assessed under income tax instead of RPGT. I remember there was an announcement 1-2 years ago by IRB saying if a person buy and sell 2 properties per year, and/or at consistently interval then you will be assessed under income tax instead of RPGT

As for 1 tier dividend, an investor cannot say they are not taxed. Because the company has paid the tax. The company only declare the net income. So you only get dividend which is already net of tax

Unlike the imputation system, where shareholder re-gross back and claim franking credit, and being assessed again. The end result is similar as 1 tier system. But 1 tier system is a lot more straight forward and save a lot of administration

This post has been edited by Showtime747: Oct 23 2017, 05:05 PM
jack2
post Oct 23 2017, 10:54 PM

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QUOTE(Udon90 @ Oct 23 2017, 08:54 PM)
all kind of investment sure use investment tool what, how u define trading? u put money into unit trust, not trading?
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it is define clearly that "to make a living", or as trading - buy sell buy sell .....
klthor
post Oct 24 2017, 09:29 AM

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i think i can start a class in lowyat forum to teach you all about badges of trade.

key word is badges of trade.

let me question all those people who said capital gain without looking into badges of trade.

money changer, they 'invest' in foreign currency, then sell it to you and make a profit out of it. they do it 24/7, so its capital gain or is it business gain? how do you determine ?

there are rules defining what is capital gain and what is not, dont see the word forex trading, share trading, investment = capital gain in nature....
cherroy
post Oct 24 2017, 09:52 AM

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QUOTE(klthor @ Oct 24 2017, 09:29 AM)
i think i can start a class in lowyat forum to teach you all about badges of trade.

key word is badges of trade.

let me question all those people who said capital gain without looking into badges of trade.

money changer, they 'invest' in foreign currency, then sell it to you and make a profit out of it. they do it 24/7, so its capital gain or is it business gain? how do you determine ?

there are rules defining what is capital gain and what is not, dont see the word forex trading, share trading, investment = capital gain in nature....
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You already gave the early hint/answer... biggrin.gif

Trading is definitely taxable.

Money changer is trading currency by offering money exchange service, their business is not investing.
So their profit is taxable.

Flipping property actually may be seen as a form of trading as well.
That's why those flip or trade excessive number of property, those profit made may be seen as "trading profit".

If the property trade is treated as trading profit, then RPGT is not applicable.

This post has been edited by cherroy: Oct 24 2017, 09:56 AM
donald88
post Oct 24 2017, 09:59 AM

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Aiyo! In short, no need to pay when you declare income tax
MUM
post Oct 24 2017, 10:11 AM

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QUOTE(donald88 @ Oct 24 2017, 09:59 AM)
Aiyo! In short, no need to pay when you declare income tax
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hmm.gif after reading all posts from this page.....it seems like your above post is "not with the normal consensus of others" unless more "IFs" and "When" details are furnished to complete the short post of yours.
donald88
post Oct 24 2017, 10:18 AM

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QUOTE(MUM @ Oct 24 2017, 10:11 AM)
hmm.gif after reading all posts from this page.....it seems like your above post is "not with the normal consensus of others" unless more "IFs" and "When" details are furnished to complete the short post of yours.
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TS is just asking about capital gain (and dividend) from unit trust and stock which would have taxes already deducted if any when cash out
MUM
post Oct 24 2017, 10:26 AM

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QUOTE(donald88 @ Oct 24 2017, 10:18 AM)
TS is just asking about capital gain (and dividend) from unit trust and stock which would have taxes already deducted if any when cash out
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he is not asking about whether dividend from unit trust and stock are taxable


QUOTE(Udon90 @ Oct 23 2017, 08:26 AM)
says I have a mil, put into stock or unit trust, made 500k in return in a year, do I have to pay tax for that 500k? if investment return isn't taxable then everyone do earn big buck should or must put into at least unit trust, coz the return at least offset the tax.
*
QUOTE(Udon90 @ Oct 23 2017, 08:39 AM)
what does that mean? says my annual return is 100k, I take out few k every month and live moderately, the monthly expense then become taxable?
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QUOTE(Udon90 @ Oct 23 2017, 01:44 PM)
So now is taxable or not? Two guys talked conflicted statement.
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QUOTE(Udon90 @ Oct 23 2017, 08:54 PM)
all kind of investment sure use investment tool what, how u define trading? u put money into unit trust, not trading?
*
klthor
post Oct 24 2017, 10:32 AM

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QUOTE(MUM @ Oct 24 2017, 10:11 AM)
hmm.gif after reading all posts from this page.....it seems like your above post is "not with the normal consensus of others" unless more "IFs" and "When" details are furnished to complete the short post of yours.
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something like tat... because without knowing the full picture, one can not be certain on the treatment. for example,

A invest 1mil in few stocks and make and make 500k within a year.
B invested 1mil in stock market, making transaction on daily basis. accumulate hundred of transactions a year to make 500k.

these 2 scenarios would have different treatment although 'A' might be fall under income tax instead of capital gain, but its arguable since its only few transactions. but B making hundred or thousand transactions a year is very likely to be non capital gain.


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