Taxation

Topics: Tax, Taxation, Income tax Pages: 9 (2707 words) Published: June 25, 2013
[Name]: YuPei

[TP Number]: TP024726

[Intake Number]: UC2F1303AF {FI}

[Subject Code]: Introduction to Taxation

[Lecturer’s name]: KHO GUAN KHAI

[Assignment title]: Individual Assignment

[Date of Submission]: 31st May 2013

Context
Introduction…………………………………………..1 Personal Income Tax……………………………..1
Tax rate……………………………………………......3 Tax relief……………………………………………....4 Personal income tax relief……………………..5
Tax rebate……………………………………………..7 Taxable income and tax liability‘s calculated8
Conclusion……………………………………………..10 Reference……………………………………………..10

Introduction
Malaysia's tax system is based on income tax as the main. The direct and indirect taxes' proportion of tax revenue ratio is 65:35 in Malaysia 2012. Of course, such a tax structure is gradually evolved with the economic development. Malaysian Direct taxes mainly includes corporate income tax, personal income tax, and petroleum income tax, among them, the corporate income tax revenue is maximum, followed by petroleum income tax and personal income tax. Indirect taxes mainly include sales tax, consumption tax, service tax and customs. Among them, the consumption tax revenue is maximum, followed by the sales tax and customs. Personal Income Tax

An income tax is a tax on individual earnings that is paid to the national government. In Malaysia, the personal income taxpayers are divided into resident and non-resident. The Resident pay taxes on income derived from all over the world. And the non-residents only pay tax on income derived from the territory of Malaysia. Section7. Residence: individuals. (1) For the purposes of this Act, an individual is resident in Malaysia for the basis year for a particular year of assessment if- (a) He is in Malaysia in that basis year for a period or periods amounting in all to one hundred and eighty-two days or more; (b) he is in Malaysia in that basis year for a period of less than one hundred and eighty-two days and that period is linked by or to another period of one hundred and eighty-two or more consecutive days (hereinafter referred to in this paragraph as such period) throughout which he is in Malaysia in the basis year for the year of assessment immediately preceding that particular year of assessment or in that basis year for the year of assessment immediately following that particular year of assessment: [Subs. Act 337:s.7]

Provided that any temporary absence from Malaysia-
(i) Connected with his service in Malaysia and owing to service matters or attending conferences or seminars or study abroad; (ii) Owing to ill-health involving himself or a member of his immediate family; and (iii) In respect of social visits not exceeding fourteen days in the aggregate, Shall be taken to form part of such period;

[Am. Act 241:s.6]
(c) he is in Malaysia in that basis year for a period or periods amounting in all to ninety days or more, having been with respect to each of any three of the basis years for the four years of assessment immediately preceding that particular year of assessment either- (i) Resident in Malaysia within the meaning of this Act for the basis year in question; or (ii) in Malaysia for a period or periods amounting in all to ninety days or more in the basis year in question; or (d) He is resident in Malaysia within the meaning of this Act for the basis year for the year of assessment following that particular year of assessment, having been so resident for each of the basis years for the three years of assessment immediately proceeding that particular year of assessment. If a person does not comply with the above four criteria that he will be determined a non-resident. If the taxpayers are residents, the following income shall be taxed in accordance with regulations: 1. Income generated in Malaysia. 2. Income derived in Malaysia to obtain. 3. Foreign remitted to Malaysia's income. Reviewing the Residence and Domicile Rules in Malaysia

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