The following sub headers will provide an overview about professional taxation services in Malaysia and hopefully shed some lights on the necessary considerations when engaging professional taxation services:
Types of Tax Professionals
Tax advisors are financial experts or professional consultants who specialise in tax laws and tax accounting as well as finance related counseling. A tax advisor or tax consultant is different from an accountant or a financial advisor. While it is true that an accountant or a financial advisor can train to become a certified tax consultant, taxation may not always or necessarily be their focus. Financial advisors face customers directly and are aware of their financial shortcomings; they may advise clients to do tax planning and be tax compliant and then get tax consultants to go into the details. Tax consultants are updated on the changes in public rulings and how to interpret the latest changes.
There are generally 4 types of tax preparers; certified public accountants (CPA), enrolled agents, tax attorneys and non-credentialed preparers.
What to Expect from a Tax Advisor?
A tax advisor or tax consultant is the go-to person for useful tax related advice, up-to-date tax requirements, in-depth understanding on all tax deductions that you are entitled to claim, tax compliance requirements and actions and above all, tax planning. Many tax advisors are adept at tax compliance but not tax planning.
Tax planning involves more forward thinking in comparison to tax compliance. Tax compliance deals with tax aspects which have already happened, such as how much relief is claimable, etc. Tax planning on the other hand, deals with that which has yet to happen. It involves forward thinking, planning, forecasting and analysing outcomes of possible actions and options. For example, when making financial decisions such as whether to buy properties under a company name or an individual’s own name, what are the tax implications for those decisions and what are the tax savings?
When hiring a tax advisor, some of the basic advice or services you can expect are:
- How to legally reduce your tax liability?
- Computing taxes based on your investments.
- Preparing and completing tax returns.
- Finding the right deductions, adjustments and credits based on your situation.
How Much Do Malaysia Taxation Services Cost?
Fees for professional taxation services in Malaysia would typically depend on the type of income tax return forms, whether one is a business person or under employment and the complexity of the case.
The starting fees could generally range from RM350 to RM1,500, excluding bookkeeping fees (applicable to business owners who fill in Form B or Form P only). Most basic fees are usually for individuals with salary as their sole income source and the fees increase if the income derives from rental or businesses.
Despite being charged the most basic fees, those who derive income solely from employment may not necessarily find it worth their spending to engage a professional taxation service. This is due to the existing implementation of employee monthly tax deduction (PCB) as final tax which enables employers to deduct monthly tax payments and submit tax returns on behalf of their employees. This is also true due to the simplicity of an employees’ case. If one receives only salary as income, the filing of tax returns is generally quite straightforward (could be as straightforward as just using your chargeable income to deduct tax relief) and there may not be that much that one can save on tax relief to justify a professional consultant’s fees.
However, if the employee also owns a business and receives rental income from owning numerous properties, this person’s case becomes more complex and possibly justifies hiring a professional tax advisor/ consultant.