30 June 2011 marks the last day of first half year of 2011. Time flies, we are mid way through year 2011.

For businessmen carried out their businesses under sole proprietorship and partnership, they all will have the same annual tax filing deadline by 30 June 2011. All individuals, whether deriving employment income only or business income, are assessed for tax based on calendar year basis, i.e. 1 Jan to 31 Dec. 

In contrast, annual tax filing deadline for companies (eg. Sdn Bhd) is 7 months from its chosen year end. Say, the company has its financial year end on 31 March 2011, the annual tax filing due date would be 31 oct 2011.

For individuals with business income in the year of assessment 2010 will have 6 months period from end of year 2010 to submit Personal Tax Return (Form B 2010).

For individuals deriving business income through partnership will have to prepare their partnership accounts for the year ended 31 December 2010, in order to calculate the taxable income to be allocated among the partners based on their “shareholding”, before they are able to include their partnership income or profits in their individual Form B.

For partnership, they are also required to submit the Form P 2010 to Malaysia Inland Revenue Board by 30 June 2011, as well as individual partner has to submit Form B by the same due date.

4 million businesses registered sole proprietorship and partnership

Just imagine, there are 4 million registered businesses as of end 2009 having the same tax deadline (30 June) that they need to file their annual tax returns at the same time. Of course, there could some inactive businesses and have yet to deregister.

Compared to 882,843 local incorporated companies as of end 2009, the number of businesses is substantial. Moreover, for incorporated companies, they have 7 months to do annual tax submission and could be spreaded throughout the year if their year end are other than 31 December.

Final reminder

Submit your tax Form P and B for year of assessment 2010 and settlement of any tax by 30 June 2011, in order to avoid late tax submission penalty and late tax payment levy.