UTAR Centre for Corporate and Community Development (CCCD) organised a
webinar titled “How to reduce individual taxpayers’ income tax burden for
the year of assessment
2021 (tax filed in 2022) in Malaysia” on 15 April 2021.
Dr Tan during the talk
The webinar, conducted via Zoom and Facebook Live, was delivered by Faculty
of Business and Finance (FBF) Department of Commerce and Accountancy Dr Tan
Swee Kiow. In her talk, Dr Tan first shared the criteria for individuals to
be considered as tax resident under Section 7(1). According to her, the
residence status for tax purposes is determined based on the number of
physical presence of that individual in Malaysia in a basis period for a
year of assessment instead of their nationality or citizenship. She
presented the scale rates of tax that was applied to the chargeable income
of resident individual taxpayers and shared some strategies on how to
mitigate tax abilities.
Dr Tan sharing some strategies that could minimise tax liabilities in a legal and efficient manner
She then explained tax relief and said, “Tax relief is a way to reduce your
chargeable income. It is categorised into fixed relief and non-fixed relief.
With fixed relief, you are able to deduct a certain amount no matter how
much it incurred; Non-fixed relief depends on the amount incurred and it is
restricted to a maximum amount.”
Dr Tan further explained how a married couple should make decisions related
to taxes—whether to file for separate or joint assessment. She stated that
married people are treated as separate individuals automatically unless they
choose otherwise. She mentioned that married couples should elect for joint
assessment if the spouse’s income is substantially less due to lower taxable
income or business loss. “A married couple should fulfil three conditions if
they want to choose joint assessment. Firstly, husband and wife must live
together. Secondly, both must have a total income to be aggregated. If the
husband or wife is a non-resident, then he or she must be a resident before
they apply for the joint assessment,” she said. She also provided some
examples in order to better understand the difference between joint
assessment and separate assessment. The webinar then ended with a Q&A
session.
Dr Tan presenting a format to compute joint assessment
Dr Tan giving an example on how to compute the tax payable under separate
and joint assessment
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