Tax planning and tax evasion are two different activities per se. Tax planning is the act of arranging of one’s financial affairs to take full advantage of all eligible tax exemptions, deductions, concessions, rebates, allowances permitted under the Income Tax Act, so that the tax burden is minimised in the hands of the taxpayer without violating the legal provisions. Tax evasion on the other hand is the act by which the tax is illegally avoided through unacceptable means. It refers to a situation where a person tries to reduce his tax liability by deliberately suppressing the income or by inflating the expenditure, recording fictitious transactions, etc.
We will discuss more on tax planning from hereon. Besides bookkeeping and related accounting services provided by Yer Ant, we also provide services in the area of tax planning. As one would describe and agree on, planning should be done in the beginning rather than later. Before we engage on the bookkeeping data entry or even better, before the start of operations of a business entity, we will always try to understand the clients’ intended businesses and operations to identify the eligibility of the clients’ businesses and activities for tax exemptions, incentives, rebates and allowances under the Income Tax Act 1967 of Malaysia. There are various exemptions and incentive, particularly from the Malaysia Investment Development Authority (MIDA), to entice foreign investors to invest in Malaysia and encourage Malaysian businesses to expand their businesses aboard whether either by way of exporting products and services or business presence expansion.
After understanding your business activities, we would proceed to identify and tax plan your business’s operational activities to maximize the tax deductions and minimize tax burdens and implications to your businesses and its owners/shareholders. Whilst some tax planning involved minor reclassification of financial transactions, some tax planning exercise may involve major restructuring of business activities and/or shareholding structures to maximize the tax benefits.
Contact us to learn more about your business and its activities and assess if there were any tax planning opportunity for your businesses. Save taxes!