|
DOING BUSINESS IN MALAYSIA
Computation of Chargeable Income
Generally, all income of companies and individuals accrued in, derived from or remitted to Malaysia is liable to tax. However, income remitted to Malaysia by resident companies (other than companies carrying on the business of banking, insurance, air and sea transportation), non-resident companies and non-resident individuals are exempted from tax. Income tax in Malaysia is assessed on income earned in the current year under a self-assessment system.
Gross Income
| Less | Allowable expenses |
| Less | Double deduction of expenses |
| Less | Special deductions [S. 34(6) of the Income Tax Act 1967 (ITA1967)] |
Adjusted Income
| Add | Group relief – Current year adjusted loss surrendered by a “surrendering company” (Y/A 2000 to Y/A 2005 – Sch 4C, ITA 1967) (Y/A 2006 onwards – S. 44A, ITA 1967) |
| Less | Reinvestment allowance (Y/A 1996 and prior) |
| Less | Industrial adjustment allowance (Deleted from PIA 1986 w.e.f. August 2007) |
| Add | Balancing charges |
| Less | Capital allowances and balancing allowances (up to adjusted income, excess to be carried forward except for listed investment holding companies) |
Statutory Income
| Less | Exemption of income for pioneer companies/Investment tax allowance (for applications received on or after 1 November 1991) |
| Less | Reinvestment allowance (Y/A 1997 onwards) |
| Less | Previous years’ business losses (not applicable for listed investment holding companies) |
| Add | Statutory income from other sources |
| Add | Recoveries of abortive prospecting expenditure |
Aggregate Income
| Less | Current year business losses |
| Less | Prospecting expenditure |
| Less | Pre-operational business expenditure (Sch 4B of the ITA 1967) |
| Less | Proportion of permitted expenses for investment holding companies (Y/A 1993 onwards – S. 60F, ITA 1967) except listed investment holding companies (Y/A 2006 onwards – S. 60FA) |
| Less | Trust annuity (S. 63(5), ITA 1967) |
| Less | Approved donations [S. 44(6), 44(6A), 44(8), 44(9), 44(10), 44(11), 44(11B) and 44(11C), ITA 1967] |
| Less | Zakat business [S. 44(11A)] |
| Less | Group relief – current year adjusted loss transferred from a “surrendering company” (Y/A 2006 onwards – S. 44A, ITA 1967) |
| Less | Carry-back losses – Immediately preceding and not exceeding RM100,000 (Y/A 2009 and 2010. See S. 44B, ITA 1967) |
Total Income
| Add | Statutory income made up of franked dividends deemed as total income (Y/A 2008 onwards) |
| Less | Personal reliefs for resident individuals |
“CHARGEABLE INCOME”
|
|
