What is Tax Identification Number (TIN) in Malaysia?
Tax Identification Number (TIN) play a pivotal role in the financial landscape of Malaysia. As the Inland Revenue Board (IRB) streamlines tax reporting, compliance, and business operations, understanding the significance of TINs becomes paramount for individuals and entities alike. This article delves into the various aspects of TINs in Malaysia, shedding light on their implementation, acquisition, and functions.
Whether you’re an entrepreneur navigating the process of setting up a new venture, or an established business seeking to strengthen its compliance, this guide will elucidate the critical details surrounding TINs and how they impact the Malaysian business environment. With these complexities in mind, follow RS 36 Solutions to delve into the intricacies of Malaysia’s tax planning landscape to help you navigate this financial terrain effectively.
What is Tax Identification Number (TIN)?
When was the Tax Identification Number implemented?
The Tax Identification Number (TIN) was officially put into operation on January 1, 2022. This decision was announced during the 2022 Budget Speech presented in the Dewan Rakyat on Friday, October 29, 2021, as part of the government’s strategy to expand the income tax base.
Tax Identification Number (TIN) or Functional Equivalent
In Malaysia, the Inland Revenue Board of Malaysia (IRBM) assigns a Tax Identification Number (TIN), known as “Nombor Pengenalan Cukai,” to both individual and corporate registered taxpayers. Having a TIN is a prerequisite whether you’re making significant purchases, such as a car or properties, in the name of an individual or a company.
If you already possess an income tax number, there’s no need to apply for a TIN. However, individuals with assessable income who aren’t required to pay taxes must still submit an income tax form.
TIN issuance extends to all Malaysian citizens aged 18 years and above. Retirees and full-time students in the same age group are only obligated to file tax returns if they meet the income tax statutes.
For purposes related to the Common Reporting Standard (CRS), in situations where a TIN is unavailable or an account holder fails to provide it for any reason, a functional equivalent is accepted.
In the case of individuals, this functional equivalent is the Malaysian National Registration Identity Card Number (NRIC Number). The NRIC Number is a unique 12-digit identifier issued to Malaysian citizens and permanent residents, serving as a means for the IRBM to identify its taxpayers.
How to Obtain a Tax Identification Number
A Tax Identification Number (TIN) is automatically assigned to citizens and permanent residents who are 18 years of age and above by the LHDN (Inland Revenue Board of Malaysia).
Taxpayers who had an income tax number before or on January 1, 2022, do not need to submit an application for a separate TIN. In such cases, the existing income tax number will serve as the taxpayer’s TIN.
Who is Required to Have an Income Tax Number?
The following individuals and entities must have an income tax number:
Individuals who are assessable and taxable.
Taxpayers who are obligated to submit declaration forms (Borang Nyata).
The term “taxpayers” encompasses individuals and legal entities. As per Article 2 of the Income Tax Act of 1967, “person” includes companies, entities, limited liability partnerships, and sole proprietorships.
Applying for an Income Tax Number
You can apply for an income tax number through the following methods:
Apply online via e-Daftar. Website link: https://mytax.hasil.gov.my
Visit the Inland Revenue Board of Malaysia office in person.
How to Retrieve Your Income Tax Number
If you need to find your income tax number, you have several options:
Visit the website at: https://mytax.hasil.gov.my
Utilize HASIL Live Chat.
Hasil Care Line – 03-8911 1000/603-8911 1100 (foreign countries).
Complete the inquiry form (Borang Maklumbalas Pelanggan) on the website.
Visit the Inland Revenue Board of Malaysia office in person.
How to Obtain a TIN in Malaysia
A Tax Identification Number (TIN) serves as a distinct identifier for businesses conducting operations in Malaysia. It holds significance in various aspects such as tax reporting, license and permit registration, and initiating a business bank account. This article elaborates on the process of acquiring a TIN in Malaysia and underscores its significance for your business.
Steps for Obtaining a TIN
Step 1: Determine Your Business Structure
The process of obtaining a Tax Identification Number (TIN) in Malaysia begins with understanding your business structure. Your choice of business type will determine the required supporting documents. Common categories include:
- Private Limited Company/Public Limited Company
- Foreign (Non-Resident) Company
- Partnership
- Limited Liability Partnership
Step 2: Register Your Business
Following the determination of your business structure, the next essential step is to register your business with the Companies Commission of Malaysia (SSM). This registration typically takes 1-2 days and can be conveniently completed online.
Step 3: Apply for a TIN
Once your business is registered with the SSM, the subsequent action is to apply for a TIN. This application can be processed through the Inland Revenue Board (IRB) online portal e-Daftar or by visiting an IRB branch office. The application will require you to provide vital information, including your business name, structure, and the names and identification numbers of the business owners and directors.
Step 4: Submission of Required Documents
As part of your TIN application, you must also submit relevant documents as stipulated by the IRB. These might encompass a copy of your business’s registration notice, business license, and other pertinent paperwork. The specific documents you need to submit will depend on your business structure and residency status. For instance, you may need to provide a copy of your certificate of incorporation, a list of partners, or a copy of your business profile from an audit firm.
Step 5: Await TIN Issuance
After submitting your TIN application, the IRB will process your request and subsequently issue you a Tax Identification Number. This issuance typically takes approximately 1-2 weeks.
Functions of a TIN
Functions of a TIN in Malaysia
| Function | Description |
|---|---|
| Tax Reporting | The primary purpose of a TIN is to facilitate the reporting of various taxes owed by businesses to the Inland Revenue Board (IRB), including corporate income tax, sales tax, and employer taxes. |
| Licenses and Permits | Many licenses and permits require a TIN for their application, such as licenses for food and beverage operations, building permits, and environmental permits. |
| Bank Accounts | A TIN is a prerequisite for opening a business bank account in Malaysia. |
| Legal Compliance | Possessing a TIN underscores your business’s compliance with Malaysian tax laws and regulations. |
Obtaining a TIN in Malaysia is an essential step when commencing a business. This process is relatively straightforward and can be completed either online or by visiting an IRB branch office. A TIN is fundamental for tax reporting, obtaining licenses and permits, and facilitating the operation of a business bank account. Acquiring a TIN ranks among the initial tasks when establishing a business in Malaysia, ensuring your business remains fully compliant with Malaysian tax laws.
Conclusion
In conclusion, Tax Identification Numbers are the linchpin of taxation and business-related activities in Malaysia. With their official implementation in 2022, TINs have become a fundamental aspect of financial life in the country. They enable accurate tax reporting, the acquisition of essential licenses and permits, and the ability to open business bank accounts.
Obtaining a TIN is a vital step for both new and existing businesses, ensuring full compliance with Malaysian tax laws and regulations. By recognizing the functions and significance of TINs, individuals and companies can navigate the Malaysian business landscape with confidence and efficiency, contributing to a well-regulated and prosperous economy.
Frequently Asked Questions (FAQs)
What is a Tax Identification Number (TIN)?
A TIN is a unique identifier used for tax purposes in Malaysia.
Who is eligible for a TIN in Malaysia?
Malaysian citizens and permanent residents aged 18 and above automatically receive a TIN.
Do I need a TIN if I have an existing income tax number?
No, if you had an income tax number before January 1, 2022, it serves as your TIN.
How do I apply for a TIN in Malaysia?
You can apply for a TIN online through the e-Daftar portal or by visiting an Inland Revenue Board office.
What documents are required to apply for a TIN?
Required documents include your business’s notice of registration, business license, and other pertinent paperwork.
Can I use my TIN for opening a business bank account?
Yes, a TIN is necessary for opening a business bank account in Malaysia.
What are the primary functions of a TIN?
TINs facilitate tax reporting, license and permit applications, and legal compliance with Malaysian tax laws.
When was the TIN implemented in Malaysia?
The TIN was officially implemented on January 1, 2022.
Do foreign companies need a TIN to operate in Malaysia?
Yes, foreign (non-resident) companies in Malaysia also require a TIN.
How long does it take to obtain a TIN in Malaysia?
Typically, the TIN issuance process takes about 1-2 weeks after submitting your application.
