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The taxation of income earned by individual businesses

Understanding Taxation for Digital Content Creators

Digital content creators such as YouTubers, Instafamous personalities, influencers, and reviewers fall into a unique category when it comes to taxation. Their employment income, often subject to monthly tax deductions by their employers, can be straightforward to calculate.

Tax Liability for High-Income Individuals

For these individuals, an annual income exceeding RM37,333 post EPF deduction may indicate a tax liability. The taxation on their business income is determined based on their monthly varying profits.

Importance of Income Tax Registration

Regardless of income level, there is no minimum income threshold for taxation in this category. Hence, it is crucial for individuals to register their income tax file as soon as they embark on their business or career.

Alleviating Concerns about Income Declaration

Concerns about declaring income should be mitigated. The income tax rates range from 0% to 30%, depending on the reported income. Furthermore, eligible expenses and tax reliefs can significantly reduce taxable income.

The Significance of Reporting and Paying Income Tax

Reporting and paying income tax are vital for several reasons, including income verification for official purposes and eligibility for government assistance.

Special Voluntary Disclosure Programme (SVDP) 2.0

The SVDP 2.0 offers a valuable opportunity for new taxpayers to declare any previously unreported income.

Making Tax Payments and Submission Deadlines

Tax payments can be made through the e-Daftar and e-Filing services provided by HASiL. The deadline for submission of tax forms for individuals with business income is June 30, 2023, extended to July 15, 2023, for e-Filing users.

Maintaining Records and Communicating Changes

It is essential to retain all relevant documents, records, and business accounts for seven years. Any business termination or changes in partners should be promptly notified to HASiL.

Source: TheStar