Individual who earns an annual income of RM25,501 (after EPF deduction) has to register a tax file.
If your income is derived from employment and your employer has deducted your tax through Schedular Tax Deduction (STD), your income tax file will be registered automatically by the IRB.
An individual should apply or register an income tax reference number at the nearest IRB branch.
Documents that required for registration:
- A copy of the latest salary statement (EA/EC Form) or latest salary slip
- A copy of Identification card (IC) / police IC / army IC / international passport
- A copy of marriage certificate (if applicable)
You can also register an income tax reference number via e-Daftar (through the internet)
- Resident in Malaysia; and
- He who has no business source in the year of assessment.
If you are carrying on a business but you receive a Form BE from Inland Revenue Board (IRB), please notify IRB to replace it with the Form B.
This form has to be completed by the following individuals:
- Resident in Malaysia; and
- Having a business source in the year of assessment.
If you are not carrying on a business but you receive a Form B from IRB, you can either:
- Use the form to declare income received; or
- Notify IRB to replace it with the Form BE
The due date for the submission of return form is as follows:
- BE Form, for individuals without business source, the due date is on or before 30th April every year.
- B Form, for individuals with business sources, the due date is on or before 30th June every year.
- M Form, for a non-resident individual without business source, the due date is on or before 30th April every year.
- M Form, for a non-resident individual with business source, the due date is on or before 30th June every year.
- P Form, for partnership, the due date is on or before 30th June every year.
To avoid any penalty imposed by the IRB due to late submission, please ensure that the form is submitted on or before the due date.
Credit in the account will be refunded to the taxpayer. However, if you do not receive your refund you can forward your application to the Collection Unit of the assessment branch where your tax file is registered.
If you require a statement of your tax position, you can obtain it by calling or writing to the Collection Unit of the branch where your file is located.
If a taxpayer has income other than employment such as business, rental and royalties, he is required to make 6 bi-monthly instalment payments, commencing from the month of March in that assessment year . The instalment dates will be stated in the notice of the instalments to be paid (CP500). The amount of each instalment will be estimated by the IRB usually base on his previous tax records. Taxpayers who do not received the Form CP500 by end of February each year, may check at the branch where their file is located.
Taxpayers who receive the Form CP500 can apply for the instalments to be revised by filling the CP502 Form. The application should be made on or before 30th June for the relevant year.
A comparison must be made between the total of the instalments paid and actual amount of tax payable. If the instalments are insufficient, the shortfall must be paid when submitting the income tax return form in the year following the year of assessment. If the total instalments paid are more than the actual tax payable, the taxpayer may claim a refund of the overpayment from the IRB.
The following individuals are responsible for tax matters of a company:
- Manager or other principal officer
- Directors of the company
- Secretary of the company
- Any person who performs the functions or duties of the persons mentioned above
A person who manages and operates the company is responsible to register company’s tax file.
When a company commences operations, they need to apply to register a tax file. However if the company is dormant, registration is not required.
Application for income tax reference number can be made at the nearest branch to the company’s correspondence address or at any IRB branch of your convenience without reference to the company’s correspondence address.
You are required to submit Form CP204 (estimation of tax payable) to the Information Processing Department, Pandan Indah, Kuala Lumpur once the business has commenced. There are special treatment for SME and non SME.
For new companies, monthly instalments on estimated tax for current financial year must be paid beginning from the sixth month of the basis period from the date of commencement of business operation.
A company is also required to submit C and R Forms within 7 months form the closing date of its financial accounts. Both forms can be obtained from the Information Processing Department, Pandan Indah, Kuala Lumpur.
Under self assessment system, i.e. from beginning year of assessment 2001 a company has to self assess its own income tax payable and submit the assessment to IRB using Form C. Explanatory note and tax guide on how to complete form C is also provided by IRB to assist a company on the tax preparation. Form C will be issued by IRB base on the companies’ accounting period. Companies should receive the return form at least 3 months before the date of submission of the form.
The submission of the Form C should be made within 7 months after the close of the accounting period which constitutes the basis period for the year of assessment. The duly completed Form C has to be submitted to the following address:
Inland Revenue Board of Malaysia
Information Processing Department, Level 10-18, Tower C,
Persiaran MPAJ, Jalan Pandan Utama Pandan Indah
P.O. Box 11018,
50990 Kuala Lumpur.
Currently Form C is submitted together with Form R for the same year of assessment.
Credit in the account will be refunded to the company after the company has submitted its tax return form. If you do not receive the refund, an appeal can be made in writing to IRB.
If the Company requires a statement of the tax payment position, the Company can obtain it by calling or writing to the Collection Unit of the IRB.
The company must have at least 2 directors each of whom has his principal or only place of residence in Malaysia and with minimum of 2 members (shareholders) except a wholly owned subsidiary.
For detail information, you may refer to : (GUIDELINES FOR INCORPORATION OF A LOCAL COMPANY)
- Briefly, conduct a name search with CCM for availability (GUIDELINES FOR INCORPORATION OF A LOCAL COMPANY)
- Preparing the documents once approved by the CCM
- After execution the documents, stamp the M&A and arrange for attestation of the Form 48A
- Submission to CCM all relevant documents duly executed
- The issuance of Certificate of Incorporation by CCM
- Submission of Forms 24, 44 & 49 to CCM to complete the exercise
Shelf Company is a ready made company for those who need a company in very short period. The shelf company is dormant and has not commenced business activities.
A director must be:
- a natural person
- of full age and capacity (ie. 18 years old)
- of sound mind; and
- qualified under the Act
- for a public companies and their subsidiaries, anybody not over the age of 70 unless specifically approved by the shareholders at the general meeting of the company.
Every company director has a personal responsibility to ensure that statutory documents are delivered to the Registrar as and when required by the Act. The following are of particular importance:
- submitting annual accounts
- submitting the annual return
- notice of change of directors or secretaries or in their particulars
- notice of change of registered office
All the directors of the company and the Company will be penalized or prosecuted by CCM for the non-compliance of Companies Act, 1965 under Sections 143, 165 and 169.
This is to ensure that every company has an official address within Malaysia to which all communications and notices may be addressed.
It defines the powers and objects of the company particularly as regards the dealing of the company with the outside world.
These are the internal regulations of the company, governing the rights and duties of the members of a company among themselves.
Every company must display its company name on the outside of every office or place in which its business is carried on. The name shall be in a prominent position in romanised letters and easily legible.
The company registration number must appear on its seal and all business letters, statements accounts, invoices, official notices, publications, bills of exchange, promissory notes, endorsements, cheques, orders, receipts and letters of credit of or purporting to be issued or signed by or on behalf of the company.
The former name of a company must appear after its present name in all company stationery for a period of 12 months from the date of change of name.
There are two ways of closing down the company
- Apply strike-off with CCM with the terms and conditions as stipulated in CCM’s guideline.
- By way of voluntary Winding-up.
- Members’ voluntary winding-up : The company is solvent. Members have control.
- Creditors’ voluntary winding-up : The company is insolvent. The creditors have control but usually they are friendly creditors.
- By way of court order
A request with the Suruhanjaya Syarikat Malaysia (SSM or Companies Commission of Malaysia) to obtain corporate and financial information on the targeted Company.
- Conduct a name search at the CCM for the availability of the desired name. The proposed name is subject to the approval by the CCM.
- Once approval from CCM is obtained, the Board of Directors has to approve the change of name by passing Board Resolution.
- A general meeting of members will be convened for approving the change of name.
- Lodged Form 11 to CCM for the change of name.
- Finally, Borang 13 will be issued by CCM to confirm and effect the change.
For more FAQ, please refer to government website: www.hasil.gov.my
An executive director is a salaried director who works full-time and is appointed with managerial powers by the board to carry out the company’s daily operations.
A non-executive director does not work full time, receives a smaller director’s fees and functions as a policy maker for the company.
The Malaysia Companies Act requires all Malaysian Companies be required to have at least two directors who are ordinarily resident in Malaysia. Such a person should be either a Malaysian citizen or a person who has permanent resident status in Malaysia.
If appropriate, TAXPRO can provide the necessary qualified personnel to act as your Company Directors to ensure your compliance with the Companies Act provided all terms and conditions are satisfied.
Directors have fiduciary duties towards the company and the shareholders who appointed them. Fiduciary duties include:-
- Act bona fide in the interest for the company. Bona fide means “in good faith”;
- Avoid a situation where there is a conflict between duty to the company and personal interest; and
- Not to make any secret profit out of the position as director.
- Act honestly at all times and use reasonable diligence when discharging their duties;
- Avoid improper use of information obtained by virtue of position to gain personal advantage personally or to cause detriment to the company;
- Avoid improper use of sensitive, unpublished information to gain personal benefits;
- Before disposing of or executing any transaction for the disposal of a substantial portion of the company’s undertaking or property, obtain approval from the members in a general meeting;
- Disclose his shareholdings in the company and any changes thereof;
- Disclose his interest in any contract or proposed contract made by the company; and
- Ensure registers and statutory books are kept updated.
- Record minutes of all directors’ meetings;
- Make annual return and lodge with CCM;
- Keep proper accounting records;
- Table accounts, balance sheet and directors’ report at AGM;
- Circulate audited accounts to members;
- Appoint auditors;
- Comply with restriction, limitation or prohibition of a private limited company;
- Appoint company secretary;
- Make declaration of solvency in the case of voluntary winding up by member;
- Ensure that dividend payments are from profits only
Every limited company must have a minimum of one Company Secretary, according to Section 139 of the Companies Act, 1965. The appointment of Company Secretary is decided by the directors of the company.
To qualify as a Company Secretary, he or she must be either a member of a professional body approved by the Ministry, or a licensed secretary granted by the CCM. Further, the person must not be a bankrupt and is not convicted of any offence under Section 130 (1) of the Companies Act.
The duties of a Company Secretary as required by the Companies Act are generally as follows:-
- Has to be present at all company meetings and recording minutes of the meeting. In this context, company meetings are mainly referred to directors’ and shareholders’ meetings. Operational meetings do not require a company secretary’s attendance.
- Keep and maintain all the statutory books and records of the company, ie. Minutes book, register book, share register etc.
- Ensure proper filing of all necessary returns with SSM such as annual return, forms etc.
- Issue notices of meetings to shareholders as directed by the board of directors.
- Process share transfers documentations and recordings.
- Countersign essential company documents and certifying documents for certain matters such as banking matters etc.
- Ensure safe custody of company seal.
Given the fact that a company secretary is an officer of a company, similar to the directors, he or she has fiduciary duties to perform for the company. He or she is required to act honestly and in good faith.
A company secretary is personally liable to criminal charges if he or she commits wrongful acts, and can also be penalized with a fine. Wrongful act is as simple as failure to lodge the annual return to CCM.
If you have an existing company and thinking of changing the company secretary, we are happy to consider taking on the role of company secretary. Simply contact us with your company details and we will arrange an appointment to meet you and provide you the relevant advice and assistance.