8.Malaysian Tax Return (For Corporate Taxation)

Corporate(or company) is require to submit tax return to IRB before the end of 7th month after closing of each financial year end (Basis period [N1]). Corporate Tax Return considered the most challenging part (to me) from any other topic, which this is also a topic that never can be stand confidently. Instead of explaining technically, its better for me to record step by step what we could do.

N1: Basis period further refer for:-

1.A Non-Business Source (Individuals & Persons other than Companies)

2.A Business Source (Co-Operatives)

3.A Business Source (Individuals & Persons other than Companies / Co-Operatives) 

4.Business & Non-Business Sources (Companies) 

For brief content,

Step 1  Reminder of request info

Duration  :About 3 months before - Filling

Subject   :To get the information you may need to prepare your Income Tax Computation(ITC) which they are : 

• Audited Account / Final Draft Audited Account       (1st Preference:Signed Audit Report, 2nd: Finallized, 3rd: Draft - note: The draft report[including audit file] normally applicable only in mid~small firm which cases audit by same firm)
• Management account       (mainly Detail Income Statement)
• Form 49 - Optional      (For directors detail) or other related statutory records
• Significant Vouchers / Receipts / Certificate    (such as dividend vouchers, dividend bonus certificates, capital payments and etc.)

Step 2 Income Statement 

Duration : Respond as soon as possible when get the required information - Filling

Subject   : Extract  taxable/non-taxable income, deductible/non-deductible expenses

Revised income statement will be do from the draft audit report at first to stated the account details by necessary. Mostly the expenses part will be revised for tax comp purposes with the management account to clarify the capital expenditure and the revenue expenditure. Further, Section 33 of would be the main consideration test on each allowable/non allowable expense on business deduction for income tax purpose. (Further detail please refer to topic: 8.1.1.General Adjusted Income (Sec 33))

Income statement (Converted into ITC) generally can be divide into few types:-

• Non income producing - (dormant/ inactive)
• Investment holding - (charge under 60F/ 60FA)
• Business income generate - (common case)

<Please click on each corporation type for further explanation >

Step 3 Further Info Request (or so call tax queries) 

Duration :>~1~2 months before - Filling
Subject   :Gets confirmation/ clarification on not clear point of accounts,[ask for detail] 


Most of the time, management account would occur many unclear issue or terminology which different from client who have headquarter from country to country. For example, the wording “Travelling expenses” may possible a transportation cost for a firm, it may possible a leave passage for another firm. Email, phone call, event a courier document service might be used to get the necessary information we needed.


<Please click here for detail :8.1.2 Step 3 Further Info Request (or so call tax queries)>



Step 4 Draft tax computations

Duration :>~3weeks before - Filling
Subject   :Finalized of ITC documents to client


With most of the information ready and confirmed by the client, draft ITC could be BORN together with draft filling of Form-C/e-C & Form-R/e-R.


Mainly item to be prepare for the 1st draft would be:-

1. Cover Letter (client approval letter)
2. Draft Income Tax Computation
3. Draft Form C/e-C & Form R/e-R
4. Bill (applicable for certain firm only)
5. CP-55 (authority to file return electronically)

 [Detail will updated soon...]



Step 5  Final Approval of tax return

Duration :~1weeks before - Filling
Subject   :Checking of audited report telly with referred accounts


From this process (once getting the signed letter and draft form), you should have almost done your job, but few more you may take further attention if you are draft ITC based on draft account. You must check through which the signed audited account is tally with your sets of account.


Once confirms, filling(of form C/e-C & form R/e-R) could be done and check(Payment) can be sent.

For your information, 


1.Payment to settle tax payable should be send together with form CP207,
2. Where endorsement of check should include:
   a.Name of Tax payer
   b.Tax reference number
   c.Year of assessment under review
   d.Correspondent address

What you may do is:-

1.Prepare a cover letter for such payment
2.Do type on/fill ups required info on CP207
3.Check/ Write the endorsement for client as:-
   a.Client's name (name of tax payer)
   b.Tax reference number
   c.Year of assessment under review
   d.A c/o stamp (stamp which enclose your firm's name and address)





Step 6 - Bound Copy (or submitted record for client)

On simple, only 4 items you may need to prepare :-
1. Cover letter
2. Confirmation submission of  form C/e-C & form R/e-R
3. Final submitted copy of form C/e-C & form R/e-R
4. The signed pages(from your client) of form C/e-C & form R/e-R
For Comprehensive, you may need :-
1. Bill
2. Duplicate of acknowledgment
============================
3. [hard cover for booklet/ binding cover]
4. Cover letter
5. Signed approval letter
6. Confirmation submission of  form C/e-C & form R/e-R
7. Final submitted copy of form C/e-C & form R/e-R
8. Signed draft form C/e-C & form R/e-R
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[Item between double line (3-8) is binding to be a booklet]