TAX PLANNING – INDIVIDUAL
Employment Income - S 13(1)(a) – S 13(1)(e) (latest YA 2013- from IRB website )
S 13(1)(a)
Salary
Wages
Remuneration
Leave pay
Fees
Commission
Bonus
Gratuity
Allowances

S 13(1)(b)
Benefits in kind ( BIK Table)
Car / MV
House Furnished / Semi Furnished
Driver
Maid/ gardener

S 13(1)(c)
Living Accommodation
Defined Value
( Rental paid by the employer – cost of the furniture)
OR
30% X S13(1)(a)- excluding shares WIL
S 13(1)(d)
Withdrawal from Unapproved fund
S 13(1)(e)
Compensation for loss of employment
GROSS EMPLOYMENT INCOME
Less: Allowable expenses:

STATUTORY EMPLOYMENT INCOME
Add: Other Income
AGGREGATE INCOME
Less: Approved donations ( 7% of AI)
TOTAL INCOME
Less: Reliefs - RESIDENT
CHARGEABLE INCOME

TAX PAYABLE
R – Scale rates
NR - Flat rate 26%

CORPORATE TAX PLANNING
Commencement of business
Business is commenced when essential activities of that business have started.
PRELIMINARY EXPENSES / PRE OPERATING EXPS = CAPITAL EXPENDITURES
Claim of Capital Allowance
Capital allowance is allowed to be claimed by a company for any Fixed assets owned by that company.
Any disposal of the FAs is subjected to either Balancing Charge or Balancing Allowance Disposal Price | 500,000 | 200,000 | Less: Residual Expenditure | (300,000) | (300,000) | Balancing Charge | 200,000 | | Balancing Allowance | | (100,000) |

Adjusted Income / loss | 1,000,000/ nil | Add: Balancing Charge | 200,000 | Less: Balancing Allowance | (100,000) | Statutory Income | 1100,000 / 200.000 |

METHOD OF FINANCING ASSETS
Hire Purchase = CA
Only Capital portion and deposit up to date of payment is considered as QE to calculate CA.
Leasing
Operating Lease
The company is not treated as the owner of the machines, therefore unable to claim the capital allowances.
Comparison between HP and Operating Lease
HIRE PURCHASE
QE = DEPOSIT PAID ADD: ACCUMULATED INSTALLMENT (P)

Hire purchase method | Leasing method | Deposit and the capital portion of the installment paid are qualifying expenditure (QE) Based on the QE, the company can claim capital allowances according to the specific rate. The unabsorbed capital allowances can be carried forward to future years and can only be set off when there is sufficient adjusted income from the same business. The hire purchase interest is not entitled as QE but is revenue expense, allowed to be deducted against the gross income in arriving at the adjusted income of the business. | Rental paid on operating lease is non-QE, therefore cannot claim capital allowances. The company is entitled to deduct the full lease rental in the year in which it was incurred, as a revenue expense against its gross business income in arriving at the adjusted income of the business. Finance lease, co can claim ownership, therefore co can claim cap allowance. |

Unabsorbed losses.
Any unabsorbed losses of a company can be carried forward to future years to be set off against Statutory Business Income of the same company.
GROUP RELIEF A company may surrender a maximum of 70% (with effect from YA 2009) of its current adjusted business loss for a year of assessment to one or more related companies.. | Conditions for eligibility: | * Group relief is available for all Malaysian incorporated tax resident company | * Claimant and surrendering companies, each has a paid-up capital of ordinary shares exceeding RM2.5 million at the beginning of the basis period. | * Both claimant and surrendering companies must have same (twelve month) accounting period. | * Claimant and surrendering companies are `related companies’. Related companies mean that at least 70% of ordinary shareholding is either owned by surrendering company or claimant company or commonly controlled by another Malaysian resident company and must be related throughout the relevant basis period as well as the 12 months preceding that basis period. | * Companies currently enjoying certain incentives such as pioneer status, investment tax allowance, reinvestment allowance, etc are not eligible. | * The claimant must has defined aggregate income in that year of assessment. | * Both companies must be subjected to tax at the full rate, i.e., 25% | * SME - 20% FOR FIRST 500,000 Balance @ 25% |