Posts Tagged with “freelancing”

What Bloggers, Influencers and Freelancers Need To Know About Taxes in Malaysia

The Inland Revenue Board of Malaysia (LHDN) confirmed  that income generated from reviews, brand endorsements and social media promotion are subject to income tax.

Since many bloggers and freelancers earn money from these activities, I thought it would be useful to have some accounting professionals answer some frequently-asked questions about taxes:

Do you need to pay income tax if you are a blogger?
Do Malaysian bloggers / freelancers need to register a business?
How do I record my income from Google AdSense / ad networks?
How much of my “income” is taxable?

In February 2019, two accounting professionals spoke to members of the Kuala Lumpur WordPress Meetup about this topic. Here are pictures and slides from the seminar. I want to give a warm thank you to:

Winnie Chua, principal of SNC Consultants Sdn Bhd
winnie.chua@sncconsultant.com

Rosdelima Mohd Ali Jaafar, partner at Rosdelima & Co
rosdelima@rosedelima.com

This article is a summary of their presentations at the event.

Bloggers are subject to income tax

Yes you must file your income tax. And you must pay taxes if your annual income exceed RM34,000 a year (as per 2018 guidelines). The good news is that you only pay taxes on your chargeable income, which is your total annual income minus all the tax reliefs and exemptions that Malaysians residents are entitled to.

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A simple bookkeeping system for your freelance microbusiness

It’s almost the tax submission deadline (for businesses) again. This year, I handed my accountant my records a whole 5 weeks before the deadline, so she has plenty of time to compute my taxes.

It wasn’t always like this. Filing my tax return in the first 2 years of running my business was a big headache and involved sleepless, stressful nights leading up to 30 June. I’ve come a long way since and thought I would share my process to help individuals just starting out.

Disclaimer: I am not an accounting professional. What follows is what works for me – your own mileage may vary. You should take this article as a guide, and consult a licensed accountant for specific questions.

The Objective

First, let’s be clear about what my system is and isn’t. This process works to:

  • Record invoices and payments (money in)
  • Record expenses (money out)
  • Make it easy for you or your accountant to compute and file your taxes

This system isn’t a solution to:

  • Be an accounting solution
  • Generate financial statements
  • Forecast your business financials

It’s important to stress that this isn’t really an accounting system – it’s more of a bookkeeping system. For most freelancers and sole proprietorships though, it is quite adequate.

If you’ve just started your business, I don’t think you need a full-on accounting solution like Quicken or MYOB. It will confuse you and make it an enormous chore to keep your books in order. Just keep it simple for now.

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