If your company is in grips with finances, you might want to restrict your spending on the minimal basics. However, cutting down your expenses won’t make much sense if you service your tax obligations. While that’s mandatory, there are incredible tricks you do on your part to minimize the expenditure and money gravitating towards the federal government. Here are great ways to help reduce your company taxes in Malaysia.
Leverage the Tax Incentives for Corporates in Malaysia
Malaysia has numerous tax incentive schemes for corporations you can capitalize on. Currently, there’s an investment tax allowance that ranges between 60 to 100 percent of your capital investment, with alternate reinvestment allowances reaching 60 percent of your capital. The glad tiding is that you’re guaranteed a chance to lower your company tax in Malaysia regardless of the nature of your company or business. These incentives are available in energy corporations, conservation, manufacturing, hospitality, IT, Islamic finances, and more others.
Claim all Business Expenses
Ensure that you don’t overlook your expenses in your accounting records since they help you save a lump sum in paying your taxes. If you’re used to paying hefty company tax in Malaysia, you might be surprised how straightforward it is swerving around heavily servicing this mandated obligation. Don’t forget to claim your expenses as the director if you dig into your pockets to fund specific projects since that could make you spend a lot.
Contribute to Charity
You might want to be the modern Robin Hood by intercepting cash going to the national government to the less privileged in Malaysia. That’ll enable you to deduct up to 25 percent of your taxable income, but be sure to keep track of the donations. While you may do it on goodwill, it might save you a fortune in your company tax in Malaysia. Besides, it helps boost your reputation effortlessly, which will put you into the good books in the community. Contributing to charity could be a perfect quid-pro-quo for your company, where you alleviate your tax burden while the community receives financial help.
Contract Your Employees
You have an incredible chance to pay lower tax amounts when you contract your employees than when you hire them permanently. The good thing is that you’ll still receive quality services – or even better – with contracted workers than those existing perpetually in your company. There are numerous independent contractors in Malaysia which you can find their services more practical and valuable. These employees usually won’t get the national government charging you much on their taxes and, therefore, offering you a much-need relief on your tax liabilities.
Conclusion
With Malaysia’s corporate tax rate hitting 17%/24%, it’s become more concerning to most companies in the country. However, there are subtle ways to navigate this high taxation rate and pay marginally or significantly low taxes. Be sure to leverage the tax expenses, contribute to a charity and perhaps, contract your employees so that the taxman goes easy on your company. That’ll help you save money for significant reinvestments into other sections of your business.
