The payment of taxes is mandatory for income earners. It is also a must because the government needs to collect taxes in order to keep things going. If you fail to pay your taxes, you will be subject to criminal liabilities, which would be another burden on your part. But there is a way of easing the burden of paying taxes without subjecting yourself to any liability. There are legal ways of tax minimization in Malaysia. There are certain tax minimization measures laid down under the Tax Act of Malaysia. These methods are different from tax evasion, which is illegal. Our Malaysian lawyers can give you legal advice on how to make use of these tax minimization methods.
 

Malaysia uses a progressive tax scheme. This means that the more income you earn, the higher amount of taxes you have to pay. For corporations, the tax rate is 19 percent for the first 500,000 MYR and 24 percent for any amount exceeding this threshold. For individuals, the rate is from 0 to 26 percent, depending on the amount of income earned. The taxes are imposed on the taxable income after subtracting the allowable deductions from the gross income. The methods of tax minimization in Malaysia focus on reducing taxable income by making use of allowable deductions. Our attorneys in Malaysia are knowledgeable of the allowable deductions.

Those looking for a commercial lawyer in Malaysia can talk to our expert and benefit from complete legal advice. Cases such as mergers & acquisitions, business contracts, risk assessment, and verification of company policy are some of the aspects we can deal with from a legal point of view. Also, if your company is involved in commercial litigation, we advise you to contact us as soon as possible.
 

There are plenty of ways to reduce taxes in Malaysia. Our Malaysian lawyers have listed down some of them:

1.    Education fund for children - Under Malaysian law, amounts deposited to the educational fund of your children (as a natural person) are allowed as deductions on the gross income. This is a very practical method of minimizing taxes because not only can you provide for your child’s education, you also can save money from minimizing tax payments.

2.    Charitable donations - The Income Tax Act of Malaysia allows charitable donations to be deducted from gross income. This applies to both individuals and corporations. But the entire donation cannot be claimed as a deduction. The allowable tax deduction for your charitable donation cannot exceed 7 percent of your gross income.

3.    Business losses - It is not all the time that your business makes profits. There are certain instances when a transaction results in a loss. It would be too burdensome for a businessman to have to suffer losses and still pay taxes. That is why Malaysian law allows business losses to be deducted from gross income.

Find out more ways how to minimize Malaysian taxes. Just get in touch with our law firm in Malaysia and our associates will help you.