Welcome to our Crowe Chat Vol.3/2022. In this issue, we will cover the following topics:
The IRBM has recently issued the Guidelines on the Tax Treatment of Income of Specialist Doctors in Private Hospitals (available in Bahasa Malaysia only) to explain the tax treatment of income received by specialist doctors in private hospitals – whether the income should be assessed as the business income of the specialist doctors in their personal capacity or as the income of the company set up by the specialist doctor.
Based on the Guidelines, the IRBM has issued a letter to the Malaysian Medical Association (MMA) on 28 June 2018 stating that, effective from the year of assessment (YA) 2017, income received by specialist doctors will be treated as the individual business income of the specialist doctor.
Details of the Guidelines
Income to be Assessed as a Business Income of the Specialist Doctor
In the following situations where a doctor owns a Specialist Clinic located in the premises of the private hospital, consultancy fees and any other forms of payment received are treated as business income of the doctor:
Income to be Assessed as a Employment Income of the Specialist Doctor
Income to be Assessed under the Company
The following are situations where consultation fees and other fees received are taxable as an income of the Company set up by the Specialist Doctors:
The IRBM has recently issued a Media Release to inform that DuitNow has been made available as an additional channel for tax refunds for individual taxpayers.
Details of the Media Release
Major points highlighted in the Media Release are:
As part of the Budget 2022 measure and pursuant to the Finance Act 2021, a one-off corporate income tax rate of 33% known as Cukai Makmur is to be levied on chargeable income exceeding RM100 million on companies other than small and medium enterprises for the YA 2022.
The Ministry of Finance had earlier issued a press release on 30 December 2021 to clarify that FSI received in YA 2022 would be excluded from the tax calculation for the purpose of the one-off Cukai Makmur.
New Income Tax Order
To legislate the announcement, Income Tax (Exemption) Order 2022 was gazetted on 5 April 2022.
Details of the New Income Tax Order
This Order is applicable to FSI received in Malaysia from 1 July 2022 and is only applicable for the YA 2022. A prescribed formula is provided in the Order to exclude the chargeable income in relation to the FSI from the Cukai Makmur computation as follows: A/B×C
Statutory income in relation to the income received in Malaysia from outside Malaysia in the basis period for the YA 2022
Aggregate income in the basis period for the YA 2022
Chargeable income of the company in the basis period for the YA 2022
The remaining chargeable income of the company of up to RM100 million will be taxed at the prevailing corporate income tax rate of 24% and the chargeable income exceeding RM100 million will be subject to Cukai Makmur at the rate of 33%.
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