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Company Registration at Paul Hype Page Singapore

“The hardest thing in the world to understand is the Income Tax.”

If the above words echo your sentiments, you are in good company – these words are those of the late Albert Einstein. According to Quote Investigator, a fact-checking blog, Albert Einstein made this statement to his trusted tax advisor, Leo Mattersdorf, who recounted the conversation in his letter that appeared in Time Magazine in 1963. In President Reagen’s tax plan speech in 1985, he briefly touched on how even Albert Einstein reportedly needed help with tax codes.

Tax returns, an obligatory once a year affair for most, while not an uncommon topic, has remained a baffling one to many of us and. This is probably why some of us resorted to engaging in professional taxation services in Malaysia.

To find out more about professional taxation services in Malaysia, do contact Paul Hype Page.

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:

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.

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Benefits of using Malaysia Tax Professionals

A tax advisor/ consultant provides useful tax related advice, guidance on the scope of tax and expenses that are available for tax deduction, specific deduction and double deduction, which are applicable to business owners who fill in Form B and P, helps with tax compliant and planning and keeps you up-to-date with the latest tax requirements and interpret any changes for you. This is also an opportunity to gain maximum benefit from tax allowances and incentives which you may overlook without the help of professional services.

If you simply have no interest in computing tax or just do not understand it or have no time to do it or to learn to do it, a tax advisor/ consultant is the hassle-free solution but at a cost. It does, however, save you time and effort by letting someone else manage your tax related matters, keeping your business accounting records for 7 years and also paying the bimonthly instalment on tax estimate to the Inland Revenue Board.

Ultimately, if the cost-benefit analysis justifies it, engaging a professional tax service should result in tax savings by capitalizing on tax planning to minimize tax liability and avoid trouble with the tax authority and the potentially heavy penalties for issues such tax mistakes and timeliness.

Want to Start business in Singapore
Want to Start business in Singapore

When Should You Consider using a Tax Professional

The following situations are some of which you might find beneficial to engage a tax professional to ensure error-free tax filing with minimal tax liabilities and maximum tax savings possible.

  • Errorneous Past Tax Returns: A tax advisor/ consultant can offer professional advice and work with you to file for an amended return and help minimise the damage previously caused as well as the next best steps to take. A qualified tax advisor can give you a peace of mind knowing that your previous errors or any errors for the matter can be avoided and your returns will be handled by a professional expert for the coming year.
  • New Business Start-up: Hiring a tax professional for a business may turn out to be a smart business investment in the long run. It will save you a lot of time and hassle for you to concentrate on your business while you leave the tax matters to the professional. No matter how small the business is, it is crucial that you start off right from the very beginning as how you file your taxes in the first year can impact your future tax filings.
  • Inheritance: Currently, Malaysia does not have any form of death tax, estate duty or inheritance tax. There was an estate duty in place until it was abolished on 1 November 1991. This means that, in Malaysia, there is no final tax on the accumulated wealth of a deceased person. However, should you find yourself inheriting an amount of money, no matter how big or small, it is best to consult with a professional before filing your tax returns as it is important that the executors file appropriate tax return to declare the deceased’s estate. These details may be unfamiliar to you and a tax consultant can ensure that you inherit the estate hassle-free.
  • Change in Marital Status: Whether newly married or recently divorced, a tax professional can advise the best way to move forward, whether to file your taxes together or separately. As every couple’s situation may be different, a tax consultant can advise the best way that suits your most current and particular situation. Generally, divorced couples are advised to file separately so that one does not have to be liable for the other should there be unpaid taxes. A tax professional can also see to it that alimony if any, has either been paid or received properly.
  • Time Constraint: Filing tax returns can be time-consuming and aggravating especially when yours is not a simple case of merely deducting tax relief off your chargeable income. Even if it is so, a tax consultant can advise on ways to legally reduce your chargeable income and thus maximising your tax savings. Being an expert of the matter, a tax consultant will be able to ensure that your taxes are done correctly and accurately through much quicker and effective work allowing you to make better use of your time where you are most needed and relieving you of tax stress.
  • Ignorance/ Lack of Knowledge: Ignorance is not an acceptable defence against tax mistakes or volunteered wrongful reporting to tax authorities. This is an area where your own trial and error may cause you even more damage, resulting in very high penalties. Hence, should you lack the knowledge or the interest to learn, it is best to hire a qualified tax expert while you focus your talent and knowledge in your own area of expertise. Tax advisors can also help you figure out sales tax rules and avoid common mistakes like unintentional tax evasion.

Factors to Consider when using a Tax Professional

There are significant benefits to hiring a tax professional. Rather than an expense, they could likely turn out to be one of your most beneficial investments. An effective tax advisor helps you keep your wealth, remain compliant with the law and avoid heavy and otherwise unnecessary penalties.

It is worth noting that should you hire an unqualified or an uncertified tax preparer, he/ she is not liable for his/ her mistakes should there be any. Hence, in order to enjoy the full benefits of a tax professional, it is important that the right person is hired and this can be done with the following considerations:

  • Licensed Tax Consultant: Licensed tax advisors is licensed by the Ministry of Finance Malaysia and their listing can be found on the Inland Revenue Board’s website. Do note that only licensed tax consultants are allowed to represent clients in handling tax issues with the Inland Revenue Board.
  • CPA with Reputable Tax Education and Experience: The Certified Public Accountant (CPA) is the most sought after and used credential in the accounting world. Choose accountants who specialise in tax consulting and belong to an accredited body that upholds very high professional standards, e.g. a tax professional who is registered with Chartered Tax Institute of Malaysia, institute that provides tax relating Continuing Professional Development Programme (CPD) to keep their tax professionals abreast with latest developments and therefore allowing them to always dispense the best possible advice to you, their client.
  • Non-linear Thinking CPA: Most accountants are known to think in straight lines. However, better consultants are able to think non-linearly to find practical yet legal ways for you to retain your wealth by understanding your business and your needs to optimise your tax planning in the best possible ways.
  • Dedicated Consultant who Probes: Major tax savings are achieved by consultants who thoroughly understand you and your business, and this understanding is achieved by those dedicated enough to ask the right questions and coming up with a diagnosis for your situation.
  • Invest in a Professional for Long-term Gains: A tax advisor needs to concern himself/ herself with your business long-term goals and future financial planning. While experienced and qualified professionals come at a cost, it is also about how much value they bring to you and how much they value you. A valuable tax professional with a tailored solid tax strategy could result in long term savings and ultimately resulting in you gaining more money in the long term.

In a Nutshell

Engaging in a professional tax service may not be the best solution for everyone. If your maximum possible tax savings as a salaried only individual is a few hundred Ringgit, then depending on circumstances, it may not necessarily be worth paying the fees for a consultant.

However, upon weighing in on the cost-benefit analysis for the long term, having a tax consultant could turn out to be a worthy investment especially when it involves lots of tax savings and avoidance of heavy penalties.

When hiring a tax professional and to maximise on the benefits of having a tax advisor, one should first have at least one or two consultation sessions to gauge the attitude and the updated knowledge of the consultant. Most consultants are well adept with tax compliance requirements but not necessarily forward thinking or passionate enough in effective tax planning strategy.

A desirable tax advisor is one who have regular strategy meetings with their clients to discuss approaches and goals rather than having the minimal once or twice a year meeting. A reliable and desirable tax professional is one who is passionate about both the tax law and the client’s future. After reading this article, you can contact Paul Hype Page to assist you in taxation services in Malaysia

Malaysia Taxation Services FAQs

What are the types of tax professionals available? 2021-06-07T21:12:02+08:00

Generally, there are 4 types of tax preparers:

  • A Certified Public Accountant (CPA)
    A person who is licensed to offer accounting services to the public. Some CPAs specialise in tax planning and preparation and are allowed to represent clients on any tax matters.
  • Enrolled Agents
    A person trained in federal tax matters and is licensed by the Internal Revenue Board and are allowed to represent clients on any tax matters.
  • Tax Attorney
    A person licensed by the state to practice law and are allowed to represent clients on any tax matters.
  • Non-credentialed Tax Preparers
    A person who prepares taxes without any professional credentials or certifications from an external organisation.
What happens if you accidentally or unknowingly committed an offence on your tax returns?2021-04-05T10:02:34+08:00

Amendments can be made to a submitted tax return form depending on when the amendments are/ can be submitted:

Submitting amendment before tax deadline: Submit a letter detailing the mistake(s) made with supporting documents (receipts, invoices, statement, etc) to the responsible branch that handles your tax file.

Submitting amendment within 6 months from tax deadline: Make a self-amendment by submitting an Amended Return Form (ARF) to the responsible branch that handles your tax file. Only taxpayers who submitted their tax returns on time can make a self-amendment.

What are the key dates relevant to the filing of personal tax? 2021-04-05T10:02:01+08:00

No later than the last day of February the following year: Delivery of Form EA by employers to employees.

By 30 April the following year: Deadline for filing of Forms BE, BT, M, MT by the person not carrying a business (employees). 

By 30 June the following year: Deadline for filing of Form B by the person carrying a business e.g. sole proprietor. 

By 30 June the following year: Deadline for filing of Form P by a partnership excluding limited liability partnerships (LLPs) 

How high are the penalties leading from tax mistakes?2021-04-05T09:57:48+08:00

It is extremely crucial that tax returns be done properly, accurately, timely and with careful consideration. If errors are detected, the Inland Revenue Board may impose fines of up to 200% of uncharged tax. Late submissions may result in fines of up to 45% of payable tax.

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