There are many opinions given in the forums and discussions. However, many opinions given are based on different individuals’ understanding (or misunderstanding) of the Income Tax Act (ITA).
Simply answering ‘YES’ or ‘NO’ is not enough, we have to understand why and justifications for our answer. However, if you are not bothered about the details, then I can tell you that in my opinion, it is ‘NO’.
The laws governing this income, in my opinion, fall squarely in Section 3 of the ITA which read :-
“…….. a tax to be known as income tax shall be charged for each year of assessment upon the income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia.”
AND
Para 28(1) of Schedule 6 of the ITA (tax exempt income) which reads :
“….. income of any person other than …company…derived from sources outside Malaysia and received in Malaysia.”
By virtue of Section 3 of the ITA, income from Google Adsense falls squarely under taxable income as it is clearly “income received in Malaysia from outside Malaysia”.
Next, we look at Para 28(1) of Schedule 6 on Income Exempted From Tax. It clearly says “income derived from sources outside Malaysia and received in Malaysia”
Therefore, income from Google Adsense would have been taxable, if not specifically exempted under Para 28(1) of Schedule 6.
Tags: Google Adsense, income, malaysia, taxable
