“Tax Planning for Sole Proprietor – An Essential Guide” thoroughly reviews the scope and terrain of taxation of sole proprietorships, discussing in depth the concept and methodology of business expenditures and income, capital allowances available for deduction together with the tax administration matters of self-assessment and the Inland Revenue Board’s new practices and approaches to tax audit and investigation.
Employing a total of 59 examples and instructive questions accompanied by comprehensive answers, this book helps steer the sole proprietor through the accounting process and procedures to compute and work out the chargeable income of his business liable to income tax.
This book is an indispensable guide on the taxation of sole proprietorships which must be in everyone’s collection, in particular business entrepreneurs, tax accountants, auditors, business advisors, students taking professional exams in CPA and ACCA, and those who seriously wish to practise taxation or embark on accounting as a career.
It must be used in conjunction with a complementary work of Dr Choong Kwai Fatt, “Tax Planning for Individuals – An Essential Guide”.
Sole proprietorships play a significant role in the Malaysian business community as they continue to grow and contribute substantially to the development and expansion of the Malaysian economy. Among business vehicles, sole proprietorships are relatively easy to set up and represent at least 70% of the businesses registered with the Companies Commission Malaysia (SSM).
As taxation is an essential and important consideration in the operation of a successful business, it will be highly beneficial for the sole proprietor to have a good grasp as well as a personal understanding of tax laws to help him attaining optimum results in his tax planning and to ensure that he does not fall foul of the law.
The income tax implications in a sole proprietorship can be complicated and contentious in many aspects, given that a portion of business expenses and the assets used in the business are commonly related to both business and private usage. This is compounded by the annual legislative changes via budget proposals, coupled with Inland Revenue Board (IRB) Public Rulings on practices which add on to the complexity and challenges.
The common setback for the sole proprietor is that he is often the main person who needs to drive the business, leaving him little time to care for his tax affairs. In addition, the lack of personnel to assist the sole proprietor in the keeping and maintenance of proper accounts and records can cause daunting problems during the submission of income tax returns (Form B) by 30 June each year in respect of the income of the previous year.
It is mandatory for accounting records to be kept for seven years in case a tax audit is carried out by the authority. With effect from 1.1.2018, any submission of incorrect returns will attract a 100% penalty on the tax undercharged. This latest IRB practice inevitably calls for the immediate action and attention of business owners. Failure to give proper attention may be very costly in additional taxes, monetary penalties, the barring of the sole proprietor from leaving Malaysia and worst of all the possible imposition of imprisonment.
Tax Planning for Sole Proprietor : An Essential Guide explains and discusses the concept and methodology of business income, derivation scope, business expenses, types of income assessment, e-trading, donation and capital allowances available for deduction together with tax administration matters including self-assessment, instalment payments, scope of tax audit and penalties for non-compliance and tax evasion.
This book serves as a practical and complete reference, employing a total of 59 examples and instructive questions accompanied by comprehensive answers to assist the reader to acquire the skills and practical knowledge to compute the chargeable income of his business.
This book has been earnestly nurtured for the benefit of the business community to ease up the personal stress of business owners in dealing with the complexities of taxation. It has taken the author a span of two years to research and put together into one volume all the pertinent aspects and topics that are of concern and interest to the sole proprietor in the operation of his business.