Malaysians, Your Blogging Income is Taxable!

Filed in: Make Money Online, Malaysia — April 19th, 2009

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It is April and the time for income tax filing for Malaysians. Do you know that your Internet/blogging income is taxable?

I have been paying income tax for years since I became a full-time blogger. While some other bloggers may argue that the Internet income is not taxable in Malaysia. My dear pretty accountant says the different.

She actually did a research to confirm that Internet income is taxable, and publish an article(Chinese) in 2008.

In short, “As long as you are making money in Malaysia (e.g. online at Malaysia home), your income is taxable in Malaysia.” And, “Every income is taxable, either local or foreign.”

As a full-time blogger, “blogging” is my personal business. Therefore, any expenses on the “business” is tax deductible, such as web hosting, Internet access fees, computer, online services, etc.

You may refer to the tax deductions list at Problogger.net.

If you need PRO accountant to help you, you may contact my beautiful accountant. She would be happy to help you, if she is free.

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  • That is something conflict if to me.
    If playing FOREX, US stock or options online, profit is not taxable because it is US market and not in Malaysia.
    But if Adsense pay you, can you exempt tax? but not to Nuffnang and Advertlets?
  • LcF
    @Everything Malaysia: I should add that "Every income is taxable, either local or foreign." Has the FOREX profit taxed in US? If it is not, then it is taxable in Malaysia.

    AdSense income is not exemptable because you are making the money IN Malaysia, AND Google did not deduct TAX from your AdSense income.
  • Look at it this way - as long as a person has a steady income, there will be tax.
  • 1)If we declare the income under personal name, is “blogging” expenses such as web hosting, Internet access fees, computer, online services, etc. tax deductible?

    2) If there any tax advantage we setup a sole propertiry company rather than declare under personal name?
  • I remembered I did mentioned that Google Income is non-taxable in Malaysia at permalink as below:

    http://selfhelp4u.blogspot.com/2008/03/google-a...

    This is a gray area worth to find out more. Maybe one of these days I will visit LHDN to find out more.
  • Jeremy
    I believe none of online marketer willing to declare 100% tax. Why pay them so much?
  • Yeah.... how will they know on your income........
  • It is taxable. Definitely. Please don use the Sch6 exemption in the argument. Blogging is like a business already.

    And as for allowable deduction, I can list out a few reasonable one:

    1. Internet bills. Though it is good to apportion them to personal and business use. It would be even better if you could register a new account for the sake of business use.

    2. Electricity. Though you might operate at house, but you still can get electricity deduction. Apportion based on floor size, it should be reasonable in the eyes of LHDN.

    3. Webhost/Domain cost. This is 100% deductible.

    4. Your equipments in your home office. Computers, tables, webcams, etc. You may claim this over the period of few years as capital allowance.

    5. Softwares licences that you bought. Claim it as your fixed assets under capital allowance. Licence renewal fee can be claimed as expenses.
  • FOREX, US stock or options profit is not taxable because it is capital gain. Even though you are playing FOREX, stocks or options in Malaysia, the profit that you made is not taxable too, only the dividend (if it is not an exempt income dividend) & interest you earn from these investment is taxable.

    When Adsense, Nuffnang, Advertlets & etc pays you, you are receiving income from the activity that you are doing in Malaysia. Therefore, it is taxable.
  • How they wil govern this to blogger?
  • icelim above is correct to say that capital gain is not taxable in Malaysia. Our tax laws don't tax capital gain but income ie dividend.

    Just wonder however if we don't bring the income in to M'sia, is it still taxable?
  • The income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia is taxable in Malaysia.

    If the income is not bring in to Malaysia, then it will not be taxable in Malaysia. However, it shall be taxable in the country where you received or keep the money.
  • according to my accountant friend... if bring the foreign earned back to malaysia... then its taxable...
    for example, if the money u earned is paid to your paypal acc and u keep it there.. then its not taxable... but once you withdraw tat money back to ur malaysia account .. then it become taxable...
    for adsense.... it always be taxable coz you bring the money in back here either via western union or chq...
  • I'm sorry, I'm here to call your bluff. Read:

    "12. Income Remitted from Outside Malaysia
    With effect from the year of assessment 2004, income derived from outside Malaysia and received in Malaysia by resident individual is exempted from tax."

    http://www.hasil.org.my/english/eng_NO2_1_1A.asp

    So anyone making money from AdSense in recent years, will NOT be needing to be paying income tax. Time to change accountants?

    -c
  • Colin,

    if I'm not mistaken, the part you mention is for income you earn while you are out of Malaysia, if remitted, is not taxable. So since most people are in Malaysia, when the money is brought in to Malaysia, it is taxable.

    I could be mistaken. Anyone can confirm this?
  • Yes, Colin. It's time for you to change accountant.
  • If you invest in either equity market or property, capital gain is not taxable
  • If you have other income sources in Malaysia, do not remit blogging income to Malaysia and use the income to pay your vendors, e.g. web designer and developers
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