Malaysian bloggers, time to prepare for tax declaration

Update: Tax declaration decline has been extended by LDHN to 30 June 2020 (for BE form) and 31 August 2020 (for e-B submission) due to Covid19

It is soon going to be April and it is time to submit your income tax declaration. In this article, I would write about the preparations required for submissions. Then in the next article, I would write about how I fill up my tax returns to LHDN.

If you are earning income through online either via your blogs, YouTube or both, or through selling online products and services, you MUST declare this in your tax returns to LHDN (Lembaga Hasil Dalam Negeri or the Malaysian Income Tax authorities).

You need to do it even though through your earnings are below taxable range.

This is because financial institutions or Google Adsense may be required to submit income earnings to the government. A report would be generated and you may be queried if it is found that you had failed to report this earnings.

Since I have monetized my blogs few years ago, I have included my blog income in my tax reporting.

Keeping records- it is important!

You must be diligent to track all your incoming income records and expenses.

1. Adsense earnings

I have a physical notebook where I list down all my Adsense earnings, the date I received the payment, the amount in USD and in Ringgit (after conversion)

2. I also download the respective bank statements where the money is credited. Previously before I switch to direct credit, I was receiving funds via Western Union. I kept and record down those earnings as well.

3. Expenses- I track and record all my expenses that I can use to deduct my earnings. I have checked with LDHN… Certain expenses such as wifi bills, hosting, software purchases are deductable. I take note of the date of billing, download my credit card statements and the merchant invoices.

Organizing your invoices and documents

All paperwork must be kept for a minimum of 7 years as you may be queried anytime by LDHN to clarify your earnings.

You can choose to organize or store your records for tax purposes as follows:

1. Print all out and physically file them. Your file should have a tab to separate between earnings and expenses

2. Store online in your email folder if the statements are delivered via online. Or you can scan, take a picture and email to yourself, then file in SPECIFIC folders that you create in your email. Please don’t leave these emails swimming in your Inbox as these mails would get buried with other emails.

Important: I would like to mention again…. Please get a simple notebook to jot down the dates of income and expenses. I cannot stress enough how useful this is because it enables you to find information very fast. What you need to include:

  • Dates
  • Debit/ credit
  • Amount in USD
  • Conversion amount in RM

There are times that I have overlooked to file an expense for a plugin I have purchased… And through referring to my book I was able to locate the specific date where I purchased the Plugin and locate the invoice and the bank statement with that expenses. If I did not jot down in my book, I would need to go through the entire year’s statements and emails.

3. File immediately either physical or electronically

The moment you get your money or incur any expenses, immediately write it down in your book.

If you opt to be paid via Western Union, you would be provided with a copy of the receipt by the agent and the money would be handed to you. Please, the moment when you get back, file the forms immediately in your income tax or blogging folder. You need to designate a fix place to file these items.

If it is electronic statements, download and park in a folder in your email or computer (create a folder via My Documents). Or if you prefer to view the physical copy, print it out and file in a folder. It need not be perfectly arranged if you are running short of time but just put these items in the same place.

In the next coming article, I would write about how to complete my tax declaration.

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2 thoughts on “Malaysian bloggers, time to prepare for tax declaration”

  1. Hi,

    I found your page through Google to double-confirm on the {tax payment not really required for AdSense income}. Just to share my experience for anyone else seeking verification as well.
    I too called LHDN to find out, the officer that responded explained that tax payment is not required for income outside of Malaysia, including Google AdSense and ForEx. Also, tax declaration for them is unnecessary apparently.
    But based on info from LHDN’s website, AdSense is considered “Income statement from advertising company”, which means it is 100% taxable.

    So best to register a business (I believe Sole Proprietorship works) for it.

  2. Thank you very much for sharing the information. I believe it would depend on whether the person wishes to take their online venture seriously. If they plan to make it as a serious side hustle or full time living, then they should register at least as a sole prop if not as LLC. For me, I declare each year even though my earnings have not reached the taxable bracket as I remember the advice given by a few local bloggers- be it taxable or not, declare.

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