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Please visit the new site.

Thank you.

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.

This is one question that every taxpayer would ask every time he/she needs to pay tax. Yet the answer is never simple or straight forward.

Income Tax is one of the most confusing and complicated subject I can imagine. The fact that it affects almost every working individuals having a taxable income.

Although there are many tax experts and consultants in practice, many taxpayers are reluctant to seek advice from these tax experts for their own reasons, mainly confidentiality and costs.

This site serves to provide a guide to common problems faced by taxpayers in a simple and straight forward manner, minus the technical jargons.

The main law that governs taxation in Malaysia is the Income Tax Act, 1967. There are also other guidelines, rulings, common practices, etc which may be used to determine taxability of an income.

Many questions asked by taxpayers can easily be answered by reading the Income Tax Act, 1967 and the guidelines, rulings, etc concerned. However, humans are complicated beings. No matter how clear the Inland Revenue Board (IRD) (or Lembaga Hasil Dalam Negeri) tries to address different situations, many taxpayers just would just come out with more situations which are beyond the norm. This is where the complication starts.

This site will be updated regularly to address current issues affecting taxpayers, whether they are employees, employers, partnerships, companies, etc., assuming they are Malaysian tax residents.

Views expressed are my personal opinion based on my best knowledge and should not be held binding or accountable to anyone.

• New schedule of montly tax deductions
• Employees are now allowed to claim rebates for personal relief every month
• Changes to the STD calculation formula
• Reduced minimum monthly deductios
• Inclusion of Benefit-in-kind (BIK) and Value of Living Accommodation (NTK) as part of remuneration
• Changes in additional renumeration formula

What does this all mean to employees and employers in Malaysia? I will provide more explanations later.