Category: Blog

Blog

Tax Incentives in Malaysia: 2024 Guide

Post author By admin
Post date April 28, 2020
No Comments on Tax Incentives in Malaysia: 2024 Guide

Types of Business Tax Incentives in Malaysia

There are various kinds of tax schemes present in Malaysia, which includes tax incentives and exemptions for different types of businesses. They also include allowances and tax deductions on a certain income.

What Are Tax Incentives?

Tax incentives are reductions or exemptions from taxes provided by the government to encourage economic activities. In Malaysia, these incentives aim to attract foreign investments, promote specific industries, and support startups and SMEs. They can take the form of tax holidays, allowances, or deductions.

Types of Business Tax Incentives in Malaysia

Malaysia’s tax incentives are broadly categorized into pioneer status, investment tax allowance, and special industry-specific incentives. Below, we’ll dive into each type:

Pioneer Status (PS)

This incentive provides companies with partial or full income tax exemption for up to five years, extendable in certain cases. It targets businesses in industries that the government aims to develop.

Benefits:

70% to 100% exemption on statutory income for up to 5 years.
Eligible companies can extend the tax exemption period.

Who Qualifies? Industries such as:

Manufacturing
Agriculture
Biotechnology
Renewable energy

Companies must apply through the Malaysian Investment Development Authority (MIDA) to enjoy Pioneer Status.

Investment Tax Allowance (ITA)

For businesses not qualifying for Pioneer Status, ITA offers an alternative form of tax relief. This allows companies to offset their capital expenditures against taxable income.

Benefits:

60% to 100% allowance on qualifying capital expenditure for 5 years.
The unused allowance can be carried forward until fully utilized.

Eligibility:

Applicable to industries like automation, modern agriculture, and environmental conservation.
Companies must demonstrate their commitment to innovation or productivity improvement.

Reinvestment Allowance (RA)

Businesses looking to reinvest in expansion, automation, or modernization can benefit from the RA.

Benefits:

60% of qualifying capital expenditure is exempted from taxable income.
Available for a period of 15 consecutive years.

Industries Covered:

Manufacturing
Agricultural processing

Incentives for Small and Medium Enterprises (SMEs)

SMEs play a critical role in Malaysia’s economy, and the government provides tailored tax incentives for them.

Key Incentives:

Reduced corporate tax rate of 17% on the first RM600,000 of chargeable income.
Various grants and allowances under the SME Digitalization Initiative.

Industry-Specific Incentives

Some industries receive exclusive tax benefits to spur their growth and global competitiveness:

(a) Halal Industry Incentives

100% tax exemption for halal-certified companies.
Focused on businesses in the food, cosmetics, and pharmaceutical sectors.

(b) Green Technology Incentives

Green Investment Tax Allowance (GITA) for renewable energy projects.
Green Income Tax Exemption (GITE) for service providers.

(c) Tourism Tax Incentives

Tax deductions for building or renovating tourism-related facilities.

Types of Business Tax Incentives in Malaysia Based on Industry

1. Trading Sector

Industries related to the production of goods, tourism sector, hoteling, manufacturing and other commercial businesses can avail pioneer status (PS) or investment tax allowance (ITA). Under PS, companies’ tax is exempted from 70% of the income for five years since the formation of the business.

According to ITA, 60% of the capital expenditure is excused on 70% of the legal income.

2. Special Incentive Scheme

Businesses that are based in Malaysia and generating income from approved businesses through the Ministry of Finance are qualified for this scheme.

It provides a tax exemption on 70% of the total income. Companies that involve heavy import-export businesses are also eligible for this special tax incentive scheme.

3. Food Production

Food production companies can claim significant tax concessions, especially if they are operating under a large corporate enterprise. Moreover, 100% tax exemption can also be availed under certain conditions if the subsidiary industries are approved through the Ministry of Finance under the list of food production industries.

4. Biotechnology

Biotechnology is rapidly rising in the scientific technology sector. Therefore, Malaysia offers several tax incentives to the companies related to biotechnology that are approved through Biotechnology Corporation, Malaysia.

The following incentives are provided to biotechnology organizations:

Start-ups and new organizations are provided with a 100% tax exemption for up to 10 years.
Expanding businesses are given a 100% exemption for up to 5 years.
Up to 20% concession is provided on the taxes after a period of 10 years.
An organization with a separate building for biotechnology research is provided with an industrial building allowance of 10% for 10 years.
Import duty charges are exempted from the biotechnology sector. Since the export of samples and modern machinery is essential in efficient biotechnology business, tax incentive on custom duty is a huge advantage.

5. Education

Private higher education institutions are exempted from the majority of the taxes, for example, development of new curriculum, modification in a course(s), and annual training of the teachers.

Non-profit schools are also provided with tax incentives in Malaysia. However, they must be registered and approved by the Ministry of Education (MOE). There is a certain amount of tax that is exempted. It depends on the scale and strength of the school.

International schools are usually profit-oriented. No tax is collected from these schools for a period of 5 years since their establishment. After this period is over, a certain amount of tax is set, which depends on the number of students studying at the school and the fee structure. Equipment needed in such schools is usually imported, which is made tax-free.

Kindergarten schools registered with MOE are eligible for the education tax incentive scheme. For a period of 5 years, tax exemption is provided to the pre-schools based on their total income. Moreover, building allowance is given to kindergarten schools.

All private pre-schools and kindergartens registered with the MOE are eligible.

6. Green Incentives

Green incentives deal with companies related to renewable and green energy. Any modern technology related to green energy adoption and research in clean energy is covered in such incentives and exempted from customs duty.

Moreover, allowance can be claimed by the companies for the successful purchase of state-of-the-art equipment needed for green energy research. Revenue generated through green technology and services is also exempted to some extent.

7. Healthcare and Wellness

Medical and pharmaceutical industries wishing to expand and modernize their operation are provided allowances by the concerned authorities. Moreover, a 100% tax exemption of QCE is given for a period of 5 years.

8. Information and Communication Technology

The IT industry has become a major part of people’s daily lives. Development of the IT industry is essential for the smooth flourishing of other industries like the latest software, applications, hardware and websites are used by the majority of the other types of businesses.

E-commerce websites are given a 20% tax exemption on the initial charges of web development for a period of 5 years. Moreover, offshore trading has also become a huge business in Malaysia because it enjoys a huge tax incentive, depending on the total revenue.

9. International Trading Companies

International companies that have established branches in Malaysia, has 60% Malaysian ownership and make at least RM10 Million are provided with tax incentives under the foreign business rules. They are provided with a 20% tax exemption of the 70% legal income for a period of 5 years.

10. Shipping

A tax exemption is given on 70% of the income to organizations and people involved in the transportation of business cargo through Malaysian ships.

The aforementioned highlighted the different types of business tax incentives in Malaysia. If you have any doubt left regarding business taxes, please feel free to get in touch with us.

Eligibility Criteria for Tax Incentives in Malaysia

To qualify for these incentives, businesses must meet specific requirements, including:

1. Registration and Compliance

The company must be registered in Malaysia and comply with local tax laws.

2. Investment in Target Sectors

Tax incentives often focus on industries that align with the government’s strategic economic goals.

3. Application Process

Applications must be submitted to relevant authorities such as MIDA, IRB, or specific industry regulators.

2024 Updates on Tax Incentives in Malaysia

The Malaysian government has introduced new updates and revisions to tax incentives in 2024 to keep up with global economic shifts and enhance local industries.

Key Updates:

1. Enhanced Pioneer Status for Digital Economy

Businesses involved in cloud computing, AI, and digital content are now eligible for extended tax holidays.

2. Expansion of Green Technology Incentives

More sectors are eligible for GITA and GITE, promoting sustainable practices.

3. Tax Incentives for Startups

New measures include tax deductions for angel investors and seed funding for tech startups.

4. Targeted SME Reliefs

Increased tax reductions for SMEs, particularly those adopting digital transformation.

Why Tax Incentives Matter

Understanding and leveraging tax incentives can significantly impact a business’s financial health. By reducing tax liabilities, businesses can reinvest savings into growth opportunities, enhance their competitiveness, and contribute more effectively to Malaysia’s economy.

Benefits Include:

Boosting cash flow.
Lowering operational costs.
Supporting long-term growth strategies.

How to Apply for Tax Incentives in Malaysia

Applying for tax incentives requires thorough documentation and adherence to guidelines set by relevant authorities.

Steps:

Identify the applicable incentive based on your business activity.
Gather necessary documentation, including business plans, financial statements, and investment plans.
Submit the application to the appropriate body, such as MIDA or the IRB.
Monitor and maintain compliance throughout the incentive period.

Conclusion

Tax incentives in Malaysia are a powerful tool for businesses and investors looking to maximize their potential in a competitive market. By understanding the different types of incentives, their benefits, and the latest 2024 updates, you can strategically position your business for growth.

Whether you’re an SME or a large corporation, taking advantage of these incentives can lead to significant financial benefits.

Frequently Asked Questions about Malaysia Tax Incentives in Malaysia

What are the key tax incentives for SMEs in Malaysia?

SMEs can enjoy reduced corporate tax rates and various allowances like the SME Digitalization Grant.

How do I know if my company qualifies for Pioneer Status?

You’ll need to review MIDA’s guidelines and submit an application to determine your eligibility.

Are there incentives for adopting green technology?

Yes, GITA and GITE offer tax exemptions and allowances for businesses in the green technology sector.

Tags tax incentives in malaysia

Blog

Who Needs to Register for Tax File?

Post author By admin
Post date April 28, 2020
No Comments on Who Needs to Register for Tax File?

Who Needs to Register for Tax File?

1. What is e-Daftar?

e-Daftar is an application that facilitates taxpayers through online registration of tax file in Malaysia. Income tax files of companies, employers, individuals, partnership and limited liability partnership (LLP) can be registered via e-Daftar.

2. Who must register Income Tax File?

The following entities and accounting firms in Malaysia must file their taxes:

Individual who has income which is taxable
A businessperson with taxable income
An employee who is subject to monthly tax deduction
Unregistered companies with IRBM
A business or company which has employees and fulfilling the criteria of registering employer tax file
The partnership which are not yet registered with IRBM
Limited Liability Partnership (LLP) which are not yet registered with IRBM

3. What are the documents required for tax registration?

The documentations vary from different categories as discussed below:

Individuals without Business Income

National Identification Card
Identification can also be proven through Armed Forces card, Police card, or Passport

Individuals with Business Income

National Identification Card
Identification can also be proven through Armed Forces card, Police card, or Passport
Business Registration Certificate

Local company (Private Limited Companies and Limited Company)

Notice of registration of the company under section 15 Companies Act 2016 or certificate of incorporation of a company under section 17 Companies Act 2016 (if available)
Notification of Change In The Register Of Directors, Managers And Secretaries under section 58 Companies Act 2016

Foreign Companies

Notice of registration of the foreign company under section 562 Companies Act 2016
Particulars Of Change Or Alteration Relating To Foreign Company under subsection 567(1) Companies Act 2016

Partnership

Copy of the partnership business registration certificate issued by the Companies Commission of Malaysia (SSM)
Complete list of partners and any required documents like their ID papers.

Limited Liability Partnership (LLP)

Copy of the notice of registration of the LLP or copy of the certificate of registration of the LLP (if available) under section 11 of the Limited Liability Partnership Act 2012

Copy of the notice of registration of the conversion to LLP under section 32 of the Limited Liability Partnership Act 2012 (if relevant) issued by the Companies Commission of Malaysia (SSM)

Complete list of partners and any required documents like their ID papers.

4. How to send the documents for tax registration?

Tax registration can be done with the help of an auditing firm in Malaysia as it will guide you throughout the process of tax registration and tax filing and inform you about the tax incentives available in Malaysia. However, the tax registration can also be done individually as well because the whole process is smooth and efficient.

After you have filled the forms and attached the required documents, they can be sent via:

The online website of e-Daftar
Fax: 03-8922 1676
You must state the application number when faxing the documents.
For any queries, issues, or comments can contact the IRBM’s line at 03-8913 3800

5. When will you receive the Reference Number of Income Tax?

After you have completed the application and the submission is accepted online, you will get the reference number in 3-4 working days.

How to check the application status?

The application status can be examined online by entering your application number in e-Daftar.

Tax Rates

In Malaysia, the rates without availing any tax incentives are:

Individual Tax Rate (Resident): 0% to 28% for year of assessment 2019 (0% to 30% for year of assessment 2020)
Company Tax Rate (Resident): 17% and 24% for Small Medium Enterprise (SME) for year of assessment 2019 onward (24% for non-SME)

In terms of the income tax system, Malaysia has adopted a unique territorial system of taxation. Any person or company, local and foreign, are subject to income tax for any income accruing in or derived from Malaysia or received in Malaysia. However, certain exemption from income tax is available for certain type of income.

For example, foreign source income received in Malaysia is exempted from income tax as stated in the local tax law except for banking, insurance companies and air/sea transportation companies. Meanwhile, capital gain is not subject to income tax but certain gain may subject to Real Property Gains Tax in Malaysia.

Individual tax have to be paid by the local residents as well as non-residents of Malaysia for income generated from Malaysia. According to the law, generally, a person who has lived in Malaysia for at least 182 days is declared a tax resident in Malaysia.

Petroleum Tax

Petroleum operations business in Malaysia is subject to petroleum income tax, which is about 38% of the total revenue generated through fuel operations and income tax rate of 24% applies to petroleum functions in fields.

Local Income Tax

In Malaysia, no state, provincial, or local government has imposed taxes on income.

Small-scale Businesses

Small companies, as well as auditing firms, if fulfilled certain criterias, would be able to enjoy massive tax incentives in Malaysia. Company incorporated in Malaysia with shareholder’s funds not exceeding RM 500,000 and has at least 60% of Malaysian ownership is eligible for certain tax incentive such as Pioneer Status which company can get a 100% tax exemption for a period of five years so it can thrive in the competitive market.

Another available tax incentive is the Investment Tax Allowance where 60% of the qualifying capital expenditure incurred within five (5) years can be offset against its statutory income. A sole proprietor or partnership is eligible to apply for the incentives provided that a new private limited/limited company is formed to take over the operations/activities of the existing production/activities.

Have more questions regarding the registration of company tax file in Malaysia? Feel free to get in touch with us.

Tags tax incentives in malaysia

Blog

e-Filling in Malaysia

US Individual income tax return. Accountant working with US tax forms

e-Filling in Malaysia

The Inland Revenue Board of Malaysia (IRBM) had introduced a system for submission of the income tax return called e-Filing. It is the easiest and the fastest method, an online system for all those who are required to file tax return under the rules and regulations made by the IRBM. Around 1.7 million tax return forms have been received by Inland Revenue Board through the e-Filing system since the year 2018.

Due to the recent COVID-19 outbreak, the IRBM has issued an amended tax filing program for the year 2020 where the deadlines to file and pay income taxes for certain category of taxpayers have been given an additional extension of time. This submission include Form E, BE, B, P, BT, M, MT, TF, TP, TJ and C (for certain financial year end). The extension given are differentiated based on types and submission method. Let us guide you with further details:

E / e-E

It refers to the return of employer for the year of remuneration 2019. The statutory deadline to submit Form E is on 31 March 2020. For a company or Labuan company employers, the form must be submitted by e-filing only whilst for non-company and non-Labuan company employers, the form can be submitted either by e-filing, postal delivery or hand delivery.

Based on the amended tax filing program, the deadline to submit Form E for all type of taxpayers is extended for two (2) months.

BE / e-BE, B /e-B, P / e-P, BT / e-BT, M / e-M, MT / e-MT, TF / e-TF, TP / e-TP, TJ

It refers to the tax return for Individuals, Partnerships, Associations, Deceased persons’ estate and Hindu Joint Families for the year of assessment 2019. The statutory deadline for taxpayers under this category who do not carry on business is 30 April 2020 whilst for taxpayers who carry on business is 30 June 2020.

All tax returns under this category can either be submitted by e-filing, postal delivery or hand delivery except for Form TJ where e-filing is not available. Based on the amended tax filing program, the deadline to submit all of the tax returns under this category is extended for two (2) months.

e-C

It refers to the tax return for companies for the year of assessment 2019. The statutory deadline for companies is seven (7) months from the date of closing the accounting period. The Form C must be submitted by e-filing and the grace period for submitting the Form C by e-filing is one (1) month as per the initial tax filing program issued by the IRBM.

However, based on the amended tax filing program, additional extension of time is given for companies with accounting year ended 31 July 2019 until 30 November 2019, where the deadline is extended for two months.

Acceptance of e-Filing

More than 4.2 million corporate taxpayers have accepted to submit tax return forms via e-Filing system. The Chief Executive Officer of IRBM, Dato’ Dr. Sabin bin Samitah, encouraged the taxpayers to submit their returns as soon as possible so that the procedure of refund (if any) can start immediately. He also added that this system has been introduced to facilitate the taxpayers.

Accounting firms in Malaysia are providing more information to the taxpayers that they can submit for example, the Form BE by using a smartphone or even a tablet. This activity is performed via Mobile Filing Application (m-Filing / m-BE). The submission using a mobile application is more efficient for taxpayers who have a busy schedule. Now they can submit their tax return forms all by themselves.

All taxpayers are encouraged to furnish their Income Tax Return Forms (ITRF) within the grace period mentioned by IRB. It is important to submit the tax return within the stipulated time to avoid the penalty charges that can be imposed if the income tax return is filed after the grace period.

Almost every accounting firm in Malaysia is providing services for tax return filing that is helpful to generate and complete the taxpayer’s Income Tax Return Forms electronically. e-Filing is an easy procedure and everyone can file tax return through this system. All information can be accessed within a few clicks on the IRBM’s official portal.

Hence, all taxpayers are strictly advised by the IRBM to submit Tax Return Forms within the given limited period through the e-Filing system (where available). In case of any query, IRBM is always contactable through the online system, the Live Chat of HASIL and Help Line of HASIL at 03-89111000.

If you have any doubt regarding your tax returns and would like to seeks professional accounting advice, do feel free to get in touch with us.

Blog

Why You Need An Accounting Firm To Help With Your Tax?

Post author By admin
Post date March 10, 2020
No Comments on Why You Need An Accounting Firm To Help With Your Tax?

Why You Need An Accounting Firm To Help With Your Tax?

As a business owner, there are certain things you can’t do by yourself either because you lack the expertise to execute the task or because you have a tight schedule. One of those things is handling your taxes.

Filing your taxes can be quite challenging. For example, filling out a W-2 is quite easy, provided you have the time and some little knowledge regarding how it is done. However, in situations whereby you have a very complicated tax return, you might have to consider hiring an expert, a person who can save you the time, stress and the money.

An accountant from an audit firm in Malaysia or an accounting firm in Malaysia (if you reside in Malaysia) can help you take care of those complicated tax returns. The following are a few reasons why you need an accounting firm to assist you with your taxes.

1. You own a small enterprise or a side job

If you are a business owner, you will be faced with many tax write-off, and an expert can help you handle them without you wasting your time.

Also, if you have a particular side-hustle be it driving Uber, selling products on sites such as Etsy or racing horses, for instance, you might not have time to take care of your 1099s.

2. You get contacted by the IRB

If you get contacted by the IRB, and they request for something as basic as substantiation of expenses linked to a car you purchased, you will need the help of an accounting firm.

You might say it’s quite simple and choose not to contact an accountant from an accounting firm in Malaysia or wherever you reside, but you must be aware that if you decide to handle it yourself and you do so incorrectly, you might transform a basic issue to something huge.

A professional tax accountant fully understands the language of the IRB and would be able to assist you with that supposed “basic” issue.

3. You want your kids to go to college, and you are planning towards it

If you have a child who is mature for college and you are making preparations towards filling out the Free Application for Federal Students Aid (FAFSA), you would need help.

You will want to ensure that no unwanted assets or income are attached to your child’s name, for instance. That alone can end up hurting them for financial assistance, though this might be ideal for tax planning.

Therefore, if your child has a 529 plan or Coverdell ESA, or even if they have a little stake in your business, it would be great if you solicit for the assistance of someone who understands FAFSA.

4. You are a rental property owner

A tax return on real estate investment can be dicey along the way, and an expert (in-person of an accountant from an accounting firm) can help you determine the type of deductions you may be entitled to.

You should seek advice from a professional during your first year of owning a rental property.

5. You are self-directing your retirement

Your Roth IRA or 401(k) is not restricted to traditional investments in stocks, bonds, including mutual funds. With retirement vehicles, you can invest in other options like bitcoin and real estate. That is self-directing.

Taking it upon yourself to fill your return on these investments might be challenging. Therefore, you need to seek help from the right source. An accounting firm can help you with that.

In a Nutshell

Generally, the Accountants can assist you with your taxes. When you are making plans regarding who to hire, ensure you take into consideration how complex your return is. Aside from handling tax returns, accountants can also prepare transfer pricing documents and offer payroll and HR services.

For more information, get in touch with us.

Blog

Ten Important Questions To Ask Your Accountant

Post author By admin
Post date March 9, 2020
No Comments on Ten Important Questions To Ask Your Accountant

Ten Important Questions To Ask Your Accountant

As the owner of a small business, it is of utmost importance that you have professional accountant advice you on important matters concerning the growth, finances, and other financial-related elements of your business.

However, irrespective of the experience you have gathered by working with an accountant, there are certain things you wouldn’t know unless you ask. You shouldn’t just sit there and ponder on those questions all by yourself, go ahead and ask your accountant for answers to any questions (business-related) that might be bothering you.

Are you lost on the right questions to ask?

Here are some questions you could ask:

1. What information do I need to give?

Being aware of the necessary information and document to share with your accountant is very significant to your relationship with him or her. As soon as you have the right answers to this question, you can be sure that you are in safe hands progressing.

To ensure that you don’t stress yourself roaming about in search of important documents when the tax season is around the corner, ensure you ask this question as early as possible.

2 . How can you assist me in my preparation for tax season?

Accountants offer several services, ranging from audit services, payroll and HR services, preparation of transfer pricing documents, etc., but the tax season is one of the primary reasons why most individuals hire accountants.

Certainly, when the tax season arrives, we all want to leave all the work to our accountant. However, to get the best out of working with a tax expert, you should assist your accountant during this period.

The responsibility to provide your accountant with important info and documents falls on you, and by asking questions regarding how they will assist your preparation, you can be certain that you are keeping the right invoices, receipts, including statements throughout the year.

3. How can you assist the growth of my business

Although it is your duty to ensure that your business experiences steady growth each year, with the advice of an accountant, you can get effective growth hints that may end up helping your business. But before doing so, you must find the right accountant, one that understands your business and industry.

Enquire from them how they can assist in the growth of your business and ensure you are attentive to all they say.

4. Am I doing the right thing?

A very important characteristic of any working relationship is sincerity. For the sake of your business, you must know what you are doing wrong, and only a sincere accountant can tell you this.

Little unchecked errors could affect your business, so instead of waiting for someone to suggest a fix, ask for the advice of your accountant. They will be very glad to help you.

5. Are there any unique considerations for my line of work?

Some industries are different; these industries do not go through the same accounting problems that others experience. To put this in check, you must ask for the advice of your accountant. Based on their versatile experience, they should be able to tell you what to do.

6. What business expenses can I subtract?

On your tax return, subtracting business expenses is feasible, but not all businesses are made alike. You can choose to subtract things such as cars, office equipment, travel expenses, etc., provided it is a genuine business expense.

To make things very easy for you, ask your accountant to specify which expenses you can remove. Accountants can assist you in reducing your tax liabilities, and preventing any punishment that may arise from deducting the wrong expenses.

7. Which laws and modifications that apply to my business should I take note of?

Each tax year comes with several modifications. Certain changes that affect you and your business can sometimes be unclear, so the best thing to do is to ask your accountant for regular updates regarding new and important rules and regulations.

Accountants can help you keep close tabs on the political and legal aspects of your industry, and prepare for cash flow difficulties that arise from the need to invest in new things such as software, equipment, etc.

8. Is there a way that I can save on taxes this year?

Just as the New Year brings new tax laws, it also brings new ways to save some cash. Contact your accountant, and talk to him or her concerning the investments and projects you have begun. They should be able to tell you if you have done anything in that tax year that could potentially mitigate your liabilities.

9. What are the available alternatives if I can’t afford my task bill?

There is nothing as challenging as you being unable to pay your task bill at the end of the year. Being proactive is the best solution here. Ask the necessary questions from your accountant as soon as possible. With their expertise, they can provide you with alternatives, including budgets and plans for things that you can afford and those you can’t.

10. How do you keep the documents I provide you with?

In this period, where there exist a plethora of hackers out there, securing sensitive documents is paramount. To ensure that your mind is at rest, ask your accountant how he or she stores your documents.

If you aren’t satisfied with the way your sensitive documents are stored, you can provide effective alternatives. The aim of this is to ensure that your documents don’t get to the wrong hands. Therefore, you must ask your accountant this question before handing over your documents.

In a Nutshell

Many business owners tend to ask the wrong questions from their accountants, while others don’t see the need to ask. Asking the appropriate questions can go a long way in ensuring that you don’t make terrible mistakes. If you aren’t clear on something, or if you need advice regarding a troubling issue, don’t be shy to ask.

An accountant will be more than willing to assist you by answering your questions. For more information, get in touch us.

Blog

Types Of Accountants You Can Hire For Your Business

Post author By admin
Post date March 9, 2020
No Comments on Types Of Accountants You Can Hire For Your Business

Types Of Accountants You Can Hire For Your Business

1. General or Staff Accountants

These are accountants who have no specific specialization in any of the sub-disciplines but maintain broad knowledge in accounting. In other words, they are general accounting practitioners. They can cover a wide range of accounting responsibilities like financial statements, maintenance and reconciliation of company accounts, cash management and payroll and HR services.

Staff accountants can help your business grow financially by offering multi-accounting responsibilities since they have knowledge in virtually all areas of accounting.

2. Auditors

Auditors are specialized accountants whose duties are to ascertain if all business records are accurately compiled and recorded, review tax payments to ensure accuracy and compliance for business, individual and government entities.

A lot of accounting firms in Malaysia and also in other parts of the world engage in auditing services, and it is better to hire an external auditor, i.e. one not associated with the company in question because there will be no bias whatsoever.

3. Management Accountants

Management accountants are responsible for planning and budgeting, external financial reporting, risk management, profitability analysis, amongst others.

These serve to give an all-round view of the financial health of an organization, whether the company is making profits or not, and this, in turn, helps the company in making relevant decisions to improve on the weak areas.

4. Cost Accountants

The role of a cost accountant is to find ways to save costs for the company. They examine every expense in the company to see where the bulk spending occurs and recommend ways to minimize these expenses. A certified cost accountant from an accounting firm in Malaysia will possess a Certified Cost Accountant (CCA) certification.

5. Certified Public Accountants

6. Forensic Accountants

Forensic accountants play a vital role in companies to uncover financial frauds that may have eaten deep into the company’s finances. Just like auditors, they sweep through the companies accounting records, and if there’s anything that breaches standards and laws, they draw the attention of authority.

A forensic accountant must possess the curiosity and senses of a detective, and they are quite different from auditors because their investigation is primarily for criminal or civil court proceedings.

7. Government Accountants

These types of accountants are relevant to Local, State, Federal and district governments. The role of a government accountant is to ensure that tax payments are duly made, recorded, and spent wisely. A government accounting firm may be an agency like the Internal Revenue Board (IRB).

8. Project Accountants

Project accountants are accountants hired for handling the financial aspects of certain projects in the company. As opposed to general and staff accountants, a project accountant’s services are required for only projects and not the entire business activity of the organization.

They often work with project managers and help minimize the cost of the project, handle invoicing, budgeting and approving expenses.

In a Nutshell

Different accountants perform varying accounting services, and there is hardly any organization that would need the services of all the types. It is, therefore, crucial to hire the right fit accountant who has the right skillset for your company’s needs as this aids efficiency.

So before seeking an accountant or any accounting firm in Malaysia, be sure first to identify what key accounting services you require and find an accounting company that offers those particular services.

For more information, get in touch with us.

Blog

What Do Tax Accountants Do

Post author By admin
Post date March 9, 2020
No Comments on What Do Tax Accountants Do

What Do Tax Accountants Do?

Tax accountants are individuals who utilize their expertise, experience, including their knowledge of tax legislation and control to proffer help to their customers or clients in paying taxes in the best and efficient way possible, while adhering to the rules and procedure of the government.

Tax accountants also make recommendations to companies and clients on how to reduce the impact that tax payment has on their company. Before we move further, why don’t we take a brief look at what tax accounting is?

What is tax accounting?

Tax accounting is an accounting strategy that has its focus on taxes instead of the presenting of public financial statements. This type of accounting is usually controlled by the IRB (Inland Revenue Board), which outlines the specific rule that individuals and organizations must adhere to in the preparation of their tax returns.

Important points

Tax accounting is a type of accounting that focuses on the preparation of tax returns including tax payments
This type of accounting is utilized by people, businesses, corporations and other organizations
In the case of an individual, tax accounting focuses on the income of such individual, qualifying deduction, donations, including any investment profits or losses.
In the case of a business, tax accounting is more complicated, with greater evaluation regarding how funds are spent and what is taxable, including what isn’t.

Certainly, accountants provide an extensive array of services such as the preparation of transfer pricing document, payroll and HR services, auditing, etc., but when it boils down to tax accounting, a tax accountant is a right expert to call. An accounting firm is home to tax accountants who can assist you in preparing your tax returns and save you the stress of trying to prepare it yourself.

There exist two categories of tax accountants, corporate tax accountants, and personal tax accountants. Corporate tax accountants work for organizations either as part of an accounting firm or as a member of the accounting department, to make sure that the company pays the right amount of money due for taxes based on the law and regulations.

On the other hand, personal tax accountants work for individuals, normally with an accounting firm, offering recommendations and help with the payment of tax.

Most tax accountants out there work for a specific accounting firm, as a staff of the company, or they can work for the national government. Accounting firms don’t usually work with large businesses, rather, they work with small and medium scale businesses and individuals who are in search of help in the preparation of their tax returns or any help regarding their taxes.

Some tax accountants do not like the idea of working for a company; instead, they prefer being self-employed and work alone from any firm or organization, providing their services to individuals in need of their help.

Primary responsibilities of a tax accountant

The following is a comprehensive list of the popular tasks tax accountants are needed to complete.

1. Obtain any important tax data on clients or companies

Evaluating financial books including balances
Reviewing financial records, systems, budgets
Carrying out audits including face-to-face meetings with clients to obtain extra information

2. Examine obtained information to look for any possible tax exemptions

Evaluating tax liabilities
Creating effective measures to reduce the liabilities

3. To set up meetings with clients and supervisors

Explaining tax laws and regulations in a way that is easily understood by the clients and supervisors
Offering effective ways to lessen payments

4. Creating effective measures to lessen tax payments

Searching for deductibles
Understanding all that tax laws and clauses entails finding deductions

5. Tendering tax reports in time

Finishing and presenting tax return forms before the D-day
Going through past tax returns and reports to see if they contain any errors and making corrections where necessary

6. Representing clients or employers during meetings with tax authorities

Negotiating tax payment problems with the tax authorities
Analyzing discrepancies (for instance, income and expenses figures not balanced as they ought to)
Searching for the best solutions for problems and discrepancies

In a Nutshell

The preparation of tax returns is a complicated task, especially if this is to be prepared for a company and not an individual. A tax accountant has the necessary expertise, experience, and knowledge to help you with not just the preparation of your tax returns, but with any issues regarding your taxes.

To ensure that you adhere to the rule and regulations of the IRC, ensure you outsource the preparation of your tax returns to a competent and skilled tax accountant.

For more information, get in touch with us. In case of any query, IRBM is always contactable through the online system, the Live Chat of HASIL and Help Line of HASIL at 03-89111000.

Blog

Five Reasons Why Sustainability Reporting Is Important

Post author By admin
Post date February 18, 2020
No Comments on Five Reasons Why Sustainability Reporting Is Important

Five Reasons Why Sustainability Reporting Is Important

The capability of a company to positively affect social and environmental change has, over the years, turned out to be a massive thought for several businesses. Several factors, such as environmental, governance, and social factors, encapsulate a panoply of problems that covers everything ranging from company culture, employee compensation, the effect of climate, and sourcing standards.

Of course, we can blame bigger companies for excluding themselves from financial reporting, but these companies still note the immense influence that ESG has on the relation of investors, market behaviour, and financial achievement. In fact, a huge percentage of the Fortune Global 500 companies make use of a well-known framework in sustainability reporting.

About 80% of the biggest companies in the world make use of the Global Reporting Initiative (GRI) standards. The Global Reporting Initiative standard provides openness to investors, clients, including other stakeholders.

While for several years, public companies have embraced the act of sustainability reporting; but historically, it has been restricted (to some extent) to smaller businesses that don’t have the necessary resources to invest in analysis and reporting initiatives.

Sustainability reports are often prepared by accountants. Peradventure, you reside in Malaysia, and you need to know more about sustainability reporting, or you wish to get one for your business, you can contact an Accounting firm in Malaysia. An accounting firm in Malaysia boasts of accountants with the relevant skills and expertise, and they are all capable of providing you with whatever you need regarding sustainability reporting.

Irrespective of how big the company is, the following are some reasons why sustainability reporting is important to every business.

1. It is greater than the environment

While climate change was surprisingly a reason for the increase in ESG reporting, governance and social factor are turning out to be very significant. ESG reporting is quite potent; it has the ability to impact change faster than either the government or nonprofits, including the younger race after seeing their dollar investment as another extension of individual value.

According to a US SIF foundation, in the year 2008, investors retained $11.6 trillion in assets associated with the criteria of ESG, an increase from the $8.1 trillion that was retained in the year 2016. It was displayed by a TD Ameritrade survey that 19% of investors (ESG investors) view human rights as one of the most significant factors whenever they choose to make a decision.

2. More success less profit

A significant indicator of the long-term achievement of a company is non-financial performance.

With ESG metrics, a business can recognize when its adopted tactics need a complete renovation; it also assists in determining the practice that is connected with certain upcoming risks, even if it is effective at the moment.

For instance, is the manufacturing duty of the company being outsourced to countries that are prone to change in traffic or inflating the cost of labor? Does the hiring strategy of the management help in the retention of e employees? Indeed, traditional financial reporting doesn’t tackle so many important issues.

3. Individuals are significant

The workforce of today tends to hold their employers at a very high standard compared to that of several years ago when working conditions, the morale of employees, health initiatives, and general culture were considered as being very significant.

With sustainability reporting, these issues can be taken care of; it does this by offering the best understanding into the relative compensation of a company, its diversity, and retention rate. This isn’t just important for reeling in customers but for recruiting and maintaining talent as well.

4. The key is openness

According to a TD Ameritrade survey, it was noted that 67% of ESG investors are primarily after advancing social and environmental causes rather than an investment rate of return. Millennials who make up about a quarter of the U.S population, portray a certain possibility of striking a connection with companies that boast of a rigid purpose and ethical governance standards.

Based on a 2005 Nielsen survey, which was conducted on 30,000 customers in 60 countries, it was observed that there were about 73% of millennials that were keen on paying more for sustainable goods and products.

5. There exist some cheap tools

ESG reporting is quite expensive, but upon the inception of B Lab, that trend has been altered.

To make use of the B Lab assessment, you don’t have to be a B Corp. The B Lab assessment offers its users the best knowledge into significant and crucial ideas normally missing from the financial performance interaction. These ideas can be used to set a standard and scrutinize how a business can adjust the values of the business alongside that of its stakeholders.

In a Nutshell

Aside from market differentiation and satisfying customer needs, by reporting on ESG consistently, the enterprise value of such a business will skyrocket, and it will turn out to be more accessible than it ever was. Aside from preparing sustainability reports, accounting firm in Malaysia also offer payroll and HR services.

Although other professionals also offer payroll and HR services, accountants are in fact, more skilled in that aspect. For more information on sustainability reporting or accounting and auditing, get in touch with us.

Blog

Accounting Trends to Look Forward to in 2020

Post author By admin
Post date February 18, 2020
No Comments on Accounting Trends to Look Forward to in 2020

Accounting Trends to Look Forward to in 2020

Over the past decade, there have been several changes in offering accounting services in Malaysia — with technological advancements and an increase in the number of accounting firms around the world.

All these firms are always on the lookout for new or improved trends to incorporate in their firms to stay on top of their game and be ahead of the competition.

Running an accounting firm at a time like this, with all that technology, means data will be processed faster and easier. Therefore, you should be aware of what’s currently working and what will be working later to choose the best strategy for your business.

Here are the accounting trends to look forward to in 2020.

1. Automated Accounting Processes

More accounting processes are becoming more automated. The automation of these processes takes away the confusion and reduces or eliminates errors in the process. Because of this, accounting firms are now investing in automated solutions for their business.

Since the automated process depends solely on computers, businesses are open to fraud and compromised security. However, these challenges have increased the demand for internal auditors to check for inaccuracies in the process.

As a result, there’s no need for in-house accounting services in Malaysia to worry about being replaced by computers.

In 2020 and beyond, automated accounting systems will take over the industry, and guide accountants in arriving at data-driven decisions faster, along with profit improvement.

2. Rise of Accounting Software Solutions

The addition of technologically-driven solutions in the accounting world will intensify in 2020. Because the demand for computerized accounting will grow, accounting software companies will satisfy this need with robust solutions.

The software offers a wide array of functionalities, including those that accountants value the most, such as optimizing accounting processes and reducing manual tasks.

There is a strong demand for software platforms to manage spreadsheets and have a better understanding of tax management around the world. It is predicted that the accounting software market will grow at a CAGR of 8.5% between 2019 and 2024.

The software will also help accountants who offer tax advisory services provide better tax solutions for their clients.

4. Utilizing Social Media

The use of social media encompasses different industries, including accounting. Social media helps to increase brand awareness, sales, and drive traffic to your website.

Accountants have discovered that social media is a powerful branding and sales tool that boosts exposure and sales while demonstrating their expertise.

In 2020, an effective social media strategy will contribute tremendously to the profitability of any accounting firm in Malaysia. The social media platforms like Facebook, LinkedIn, blogs, and community forums will help firms keep in touch with clients.

Social media also helps accounting firms monitor what competitors are up to and learn new industry trends.

5. Real-time Connections

2020 will be a year when accountants will connect with their clients in real-time and also enjoy greater security, transparency, and accounting services in Malaysia, using their company App.

Also, recording transactions that usually would take hours or days will now take minutes or seconds. And, if there’s a change made by one party, it will be updated in real-time for everyone with access to see.

Additionally, using digital tools like mileage trackers offers the perfect first step in engaging clients with digital technology, keeping the clients and accountants connected.

For instance, the tracker will automatically detect a trip so that the accountant’s App on the client’s phone tracks his movement. It means that there will be less chasing for the client’s business mileage when compiling the end of the year tax return.

Also, the details of the trip can be sent to the accountant with one click of a button or via email as an attachment.

Do you wish to find out how automated accounting can help to leverage your business and increase your business competitiveness in the long run? Take a look at all the services we offer or get in touch with us to know more.

Blog

Eight Reasons Why You Should Hire An Accountant

Post author By admin
Post date February 18, 2020
No Comments on Eight Reasons Why You Should Hire An Accountant

Eight Reasons Why You Should Hire An Accountant

Growing your business to greater heights involves you considering the right steps and strategies to take and ensuring that your financial goals are duly met in a given period. Every registered business is tax liable, and taxes can cut a deep hole in your business if appropriate measures are not taken.

Also, there will likely be a host of financial documents to fill from time to time, and since your primary focus is to make more money from your business, you may lack the technical know-how in handling taxes and filling these forms correctly in a way that would benefit you in the long run.

An accountant is highly skilled in all areas of managing the finances of any business.

Eight reasons why you should hire an accountant

1. Filling your tax forms

Filling your tax forms can be a simple matter, especially when your business is of a very simple nature, but even at that, a lot of business owners still fall victim to tax issues. Seemingly irrelevant mistakes made when filling these forms may pose a huge threat to your finances later on.

When you fail to fill and submit necessary tax forms — such as a tax return — before the deadline, then you could be asked to pay a fine. When you hire an accountant, he or she will ensure that all tax forms are filed correctly and submitted on time to avoid unnecessary issues.

2. Planning for tax liability and tax incentives in Malaysia

An accountant would not just prepare your financial documents for you but would consider the best way to put you and your business at a tax advantage, and help you qualify for certain tax incentives in Malaysia. These are some special accounting services which an accountant would bring to your table when hired.

3. Cutting down on your taxes

This is also one of the several accounting services Malaysia which an accountant would provide you with when hired. He keeps track of the frequently changing tax laws and ensures that whatever tax you pay is minimal.

4. Rendering valuable financial advice to help grow your business

An accountant who has worked with you for several years would have developed some level of sensitivity into your business, and know just what touch to give the business to take it to the next level. Advice obtained from a reputable accountant is worth more than gold. Ensure you seek their advice before making any business decision.

5. Time savings

As a sole proprietor or freelancer, your time would be better spent on doing what you know how to do best, and that most certainly does not pertain to accounting. Some people do not want to hire an accountant because of the accountant fees.

But when you attempt to do your accounting yourself, you’d be wasting useful time, which you should be using to make more money. It would save you valuable time when you leave accounting for the accountant.

6. Making financial statements

When you hire a reputable accountant such as one from an accounting firm in Malaysia, rest assured that he or she would be highly skilled in preparing financial statements.

A financial statement involves summarizing and giving report periodically on all your business’s financial transactions in such a way that would clearly highlight the direction in which the business is moving, and what exactly is responsible for that movement. By so doing, important financial decisions can be made to enhance business growth.

7. Maximizing profits

An accounting firm would help a business reduce costs while maximizing profits. It seeks out financial information about your environment and uses business tactics and dynamics to help you attach costs to your goods in such a way that would boost your sales and provide maximum profit.

8. Dealing with financial problems

A business can sometimes run into a financial problem such as taxes, fines, bankruptcy, court cases, etc. As a freelancer or sole proprietor, you may be at a loss of what to do. Having a professional accountant by your side during this storm is like finding water in a desert.

If at all the problem is beyond the accountant’s scope, he or she is likely to be acquainted with a lawyer or any other professional which could be of immense help to you.

In a Nutshell

There are certain things you simply don’t have the expertise to do as a business owner, and one of these things are issues regarding financial analysis such auditing, drafting out financial correct statements, etc. Hiring a professional accountant incurs an expense, but with their services, you will end up preventing your company or business from losing cash unnecessarily.

The services an accountant provides are aimed at indicating hiding issues regarding the finances of your company and offering you the best solution on how to tackle such issues. Save yourself the stress of overthinking and consider hiring the services of a professional accountant.