In my previous article, I have covered on the preparations required for tax declaration as a Malaysian blogger. I provided simple bookkeeping steps I use to help me manage my tax declaration.
In this article, we would talk about how to declare income tax if you are a Malaysian blogger.
Here I would like to provide a rough guide on how I do my reporting:
Do note that the following are my scenarios. If your situation is different, you may need to perform additional steps such as registering for sole prop.
1. My main source of earnings are through Google Adsense which now is direct credit to my banking account in Malaysia.
2. I do not earn any online income through other forms such as sponsored posts, online buying/selling or freelancing work.
3. I declare as individual. I did not set up as sole prop because my blogs are more of a hobby and a little side income than it is a business.
If your case is more complicated, ie you are under sole prop or Ltd (means you can deduct business expenses) and you do earn via freelance or through buying/selling goods, then you would need to seek advice from other sources such as an accountant or financial planners (most of them would at least register under sole prop).
What if you have a full time job and blog part time (and earn income through Google Adsense)
In 2017, I was working for the first few months of the year before I resigned to be a full time caregiver. Each year, my HR would provide me with my EA form to be submitted for tax declaration.
About 2 months after I resigned, my started to monetize my blogs. The following year in 2018 when it comes to tax declaration, I submit all my declaration of income from my job (salary and bonus) as well as my blog.
Not long later, LHDN sent me a letter to officially let me know that my category has change to “Pendapatan daripada perniagaan”, meaning I have income from business.
|A||Pendapatan berkanun perniagaan||(fill up the total online income you have earned)|
|B||Pendapatan berkanun pengajian||(fill up the total salary plus bonus you have earned from your job)|
|C||Pendapatan Aggregat||(the system will automatically total up A + B|
|D||Tolak Rugi Perniagaan tahun semasa||Minus off your expenses related to your online business, eg hosting, domain name, plugin purchase, etc|
|a. Gaya hidup||I deducted from gym and my wifi expenses (billed under my name)|
|b. Insurance nyawa and KWSP||I also deducted from here|
|Jumlah Pendapatan||Amount in label E|
|Tolak Jumlah Pelepasan||The system will compute|
|Pendapatan bercukai||The system will compute|
And as you go on and fill up relevant information, the system will compute the total tax that you need to pay. If you are working and working on your blog on part time basis, your employer may have already paid on your behalf to LHDN. Usually some amount would be returned to you after deductions such as from insurance, KWSP, etc.
Important: For all the figures that you fill up, please ensure you have supportive documentation to justify. That is why I have emphasized in the previous article it is very important to have the records from your blog organized… regardless whether that income is within taxable or non taxable range.
If the final amount indicates you need to make payment, then please make the additional payment to LDHN.
If you are a full time blogger without a paid job, it is not necessary to register as a sole prop or LTD. But if you have big plans for your site/ online business/ YouTube channels, then you may consider registering with SSM (Suruhanjaya Syarikat Malaysia).
The benefit of registering is that once you file under sole prop, you are able to deduct some expenses such as purchase of camera equipment, sound system, advertising cost, employing freelancers, etc. This is something to consider if you have long term goals for your site. But do note that once you register, you would need to do a full set of accounting for tax returns. It is out of the scope of this post on tax declaration under sole prop or registered business entities. You can seek further advice for example friends who are financial planners, insurance or real estate agents as I understand they would be required to register as sole prop.
We need to understand that in the Malaysian tax law, we are required to declare any form of income we have.
Do note that when Google Adsense or local affiliates, sponsor posts, companies were to pay to you, there is a record of payment under your full name in black and white. Companies would declare as part of their payment or expenses which are fully auditable.
Especially with Adsense, you can only collect payment if you present your NRIC and with proper documentation. I am sure if our government wishes to retrieve the report, it is easy to do do from Google…. as for Malaysians, we are being paid via the Google office in Singapore.
I know some Malaysians are choosing not to declare but my since advice is that it is really not worth it to evade or living in constant fear and worry. I have done the tax submission for coming up to my 3rd year and honestly, it does not take up much of my time. If I had organized myself well in the past year, my e-Hasil submission only takes me probably about 15 minutes to complete.