If there is anything that business people cringe at, it’s at the thought of paying taxes. In 2017, a lot of Malaysian top notch celebrities were owing taxes and the Malaysian tax authorities were right on their tail.
One would think that since these people earn a lot, paying taxes shouldn’t be a problem to them but just like it is a problem when you earn so little money, it is even a bigger problem when you earn a higher income. The logic behind thus is not far-fetched.
The Malaysian tax system is progressive in nature and so, there is a range of higher income you earn that your taxes will become higher in rates than those earning less than you. Those earning less than the stipulated government range get a fixed tax rate that they must deliver on unfailingly.
In this blog post, we’ll be showing you some common tax offences you should avoid an all cost.
1. Bad Tax Advice
The first worst thing that can happen to anybody in any issue like tax payment that they are naive about us getting a compelling bad advice. It’s like putting the wrong foot first in a dance, every other step will definitely be a bad movement.
If you feel you need to understand how a few things work about taxes and maybe having a streamlined advice for your own tax payment, it is always better to find a professional to dish that advice not just someone who perhaps read economics in school.
The importance of having a professional advice you cannot be overemphasized. If you find out that you cannot get any professional advice from people around you then it is best to visit the nearest Lembaga Hasil Dalam Negeri (LHDN) around you.
2. Failure to submit tax return forms
Everyone is expected to submit their personal tax return form by the 30th of April and for those doing business, the 30th of June every year unfailingly.
It becomes an offence if these date passes and you as a rightful taxpayer did not make your submission. You can be liable to a fine raging from RM200 to RM20,000 or face imprisonment for not exceeding 6 months or both.
In addition, if not submit for 2 years or more, the fine is increased to RM1,000 to RM20,000 and special penalty equal to treble the amount of tax or additional tax. If you are unsure whether you are required to submit tax return and pay the income tax, it is advisable that you visit the tax agent to assist you on this matter.
In a case where you’ve already started paying taxes and filing tax return forms, then you shouldn’t ever forget to keep you from rolling in on it before the stipulated date.
3. Not disclosing your true income
This is a terrible offence to commit and it is classified under one straightforward order- tax evasion. The Malaysian law does not take it easy on those evading taxes. Penalty for omission or understatement of income can be equivalent 100% of the tax undercharged.
Therefore, to ensure that you calculate your tax return figures properly and if you can’t do that yourself, employing the skills of an audit firm in Malaysia is a viable option especially for business owners.
One other important thing is that the intricacies of tax laws change yearly and as such, tax payers must ensure that they evolve with the trend as it goes. Any slack in the knowledge gap about your supposed tax system can have government tax officials knocking on your door years later when the money is probably even finished.
To understand your standings about taxes, get in touch with us today on our website.