KKHO - Taxation

Services We Provide:

Like other countries, Malaysia’s tax system is favorable, making it attractive for businesses.
The tax year in Malaysia runs from 1 January to 31 December, and tax returns must be submitted by 30 April of the following year.
Malaysia imposes various taxes, such as personal income tax, corporate tax, property tax, consumption tax, and road tax.

Effective tax management is essential for business success, as mishandling taxes can lead to severe consequences and hinder growth.
Corporate tax compliance requires significant management resources, time, and expenses.
At KKHO & PARTNERS PLT (LLP0031584-LCA & AF 002455), we offer customized tax compliance services to meet specific business needs.
Services include independent tax compliance reviews, specialized technical advice, and comprehensive outsourced tax compliance.
The goal is to alleviate tax burdens, allowing businesses to focus on core activities.

Implemented in April 2015, KKHO recognizes GST as Malaysia’s VAT system.
GST has a 6% rate and replaced the previous consumption tax, including SST.
It applies to goods and services at all supply chain levels, from suppliers to retail distribution.
The tax reform aims to improve tax compliance and simplify administration through self-policing.

KKHO recognizes the importance of the Certificate of Residence (COR) in Malaysia for confirming tax residency status.
The COR is issued by the Inland Revenue Board of Malaysia (IRBM) and validates an individual’s residence in Malaysia for tax purposes.
Eligible taxpayers who are Malaysian residents can benefit from the Double Taxation Agreement (DTA) provisions by obtaining a COR.
The DTA helps prevent income from being taxed twice by treaty countries.
A COR is typically valid for 12 months from the date of endorsement.
It is necessary to apply for a new COR upon its expiration or at the request of the client from the treaty country.

Income tax is compulsory and imposed on the financial income of individuals and entities within a specific jurisdiction.
In Malaysia, both businesses and individuals must file tax returns annually to assess tax liabilities or claim tax refunds.
The requirement applies to those whose income is earned within Malaysia.
Income tax is a vital revenue source for the government, funding various activities and public services for citizens.

Malaysia, like many other countries, enforces withholding taxes on payments made to non-residents.
Withholding tax is a portion of income tax withheld by the payer in Malaysia from the income of non-resident recipients.
The withheld amount is then remitted to the Inland Revenue Board of Malaysia (IRBM).
Withholding tax is used to collect income tax from specific groups of non-residents in Malaysia.
It is applicable to various types of payments, such as royalties, interest, contract payments, and certain categories of income paid to non-residents.

In Malaysia, KKHO recognizes stamp duty as a tax imposed on specific documents or written instruments listed in the First Schedule of the Stamp Duty Act 1949.
Documents or instruments executed within Malaysia must be appropriately stamped within 30 days of their execution.

Tax investigation is an enforcement measure conducted by the Inland Revenue Board Malaysia (IRBM) to verify tax filings’ accuracy.
Its main purpose is to investigate taxpayers suspected of fraudulent activities, intentional evasion, or negligent reporting of income.
The Director General of Inland Revenue (DGIR) has the authority, under the Income Tax Act of 1967, to initiate investigations and conduct tax audits on taxpayers.
Tax offenses such as non-compliance and tax evasion can lead to charges under the Income Tax Act.

Tax Clearance Letter (Surat Penyelesaian Cukai, SPC) in Malaysia is issued by the Inland Revenue Board of Malaysia (IRBM).
It certifies any outstanding tax liabilities of a taxpayer.
Required in various circumstances, including retirement, completion of employment contract, resignation, termination of employment, or leaving Malaysia for over three months.
Release of salary depends on obtaining the Tax Clearance Letter.
Next of kin must apply for the letter in the event of a taxpayer’s demise.
Applies to both Malaysian citizens and expatriates/foreign workers in Malaysia

Transfer pricing involves pricing arrangements between associated entities for the transfer of goods, services, and intangible assets.
The goal is to ensure that the pricing is in line with prevailing market prices in transactions between independent parties.
It aims to reflect prices that would be agreed upon in arm’s length transactions between unrelated entities.
This approach promotes fairness and prevents potential distortions in profit allocation and tax liabilities among associated parties in cross-border transactions.

Availing professional services helps identify and assess key risk areas concerning Goods and Services Tax (GST).
The services involve a comprehensive review and analysis of GST risk areas to uncover potential vulnerabilities.
Skilled experts conduct face-to-face meetings at your premises, engaging in detailed discussions with your personnel.
This collaborative approach includes a walkthrough of draft findings for clarity and understanding.
The expert provides a concise summary of their findings and recommendations, emphasizing significant GST risk areas that need attention.