CHAPTER 1

INTRODUCTION
Year of Assessment

• Year of Assessement (YA) is refers to the year in which tax is assessed.

• With effect from 1 January 2000, Malaysia implemented the current
year assessment. With this, the assessment of income tax will be
concurrent with the derivation of the income.
• The calendar year coinciding with a YA shall constitute the basis year
for that YA.
• Example:
• YA2000 refers to the calendar year from 1/01/2000 to 31/01/2000.
THE BASIS OF ASSESSMENT

1) Basis period for individuals

• With effect (w.e.f) YA 2004, all income op persons other than a
company, cooperative or trust body, are assessed on a calendar
year basis.
• Example:
• Raihan worked as an accountant in Kuala Lumpur from 1 January
2019 to 31December 2019. His total income received for the
2019 amounted to RM60,000. The income received during this
period is taxable in YA 2019.
THE BASIS OF ASSESSMENT (con’t)
2) Basis period for company, trust body and cooperative society
• The basis period for a business source is normally the financial year
ending in that particular YA.
• A business which closes its accounts on 30 December 2018 is means
the financial year ending 30 December 2018, thus this would be a
basis period of assessment for the YA2018.
• Example:
• Teraju Terbilang Sdn Bhd closes its accounts on 30 June each
year. For YA2019, the basis period of the company is based on
the company accounting period from 1 July 2018 to 30 June 2019.
TAX RATES
• Two types of tax rates are applicable in Malaysia, namely:
A) Scale rate
• Scale rate is applicable to resident individuals and co-operative societies and
clubs where income is taxed at progressive rates.
• The current scale rate is from 0% - 26%.
B) Flat rate
• Flat rate is applicable to specific categories of taxpayers such as non-resident
individuals.
• The current flat rate is 26%.