The Inland Revenue Board (LHDN) has issued a reminder to business owners, including those earning income from paid reviews such as YouTubers, Instafamous personalities and influencers, that they are required to report their income even if they suffer losses.
Kuala Lumpur LHDN Principal Assistant Director Syed Mohd Syukree Syed Mohd Kamil asserted that it is a common misconception among taxpayers that they are not required to submit or report their income if their business incurs losses.
You must declare your income to LHDN even if your business suffers losses
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Syed Mohd Syukree was quoted by BERNAMA as saying that regardless of whether one’s business makes a profit or suffers losses, they are still obligated to submit and report their income annually to LHDN.
He also assured that taxpayers won’t necessarily be taxed if their business is operating at a loss.
The Kuala Lumpur LHDN Principal Assistant Director further elaborated,
“However, if you also earn other income, such as a salary, your total income will be assessed under Form B (Tax Income Declaration Form for individuals running a business). In such cases, taxation may still apply based on the combined income,”
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Syed Mohd Syukree added that individuals considered to be running a business include YouTubers, Instafamous personalities, influencers, or anyone earning income from paid reviews.
In other words, anyone who receives payment for their content or services is considered to be running a business and failing to report such income within the stipulated period is a criminal offence.
Those who fail to declare income may face up to 6 months in jail, up to RM20,000 fine or both
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In fact, Syed Mohd Syukree revealed that legal action can be taken under Section 112(1) of the Income Tax Act 1967 for failure to submit an Income Tax Return Form (ITRF).
If convicted, they may face a fine between RM200 and RM20,000 or imprisonment of up to 6 months, or both.
Moreover, non-compliance can trigger a tax audit, which involves a detailed review of all business transactions and financial documents.
Hence, he advised taxpayers to begin reporting their income via Form B or e-B on the MyTax Portal from 1 March to 15 July annually.
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So, what do you guys think of the Kuala Lumpur LHDN Principal Assistant Director’s statement? Share your thoughts with us in the comments.
