I heard that those in consultancy, need to charge 5% service tax on their clients?
Is that truth in our budget 2008?

Thanks.

Your statement …”individual does not need to pay tax for share dividend received” is a reflection of yr misderstanding of the one tier tax system that to be introduced in 2008 budget. As a result, leading you to claim that you might invest more in share ! What quite a misleading statement was to other bolggers !

Let me try to putting in the right persepective. Before the new “one tier taxation”, basically, any company having intention to flank out dividend for shareholder must be carried free balance in the section 108 account.
Free there, the company will be paying 27% tax on behalf of shareholder (in this year) to the inland revenue.

The lower income group can claim back the tax from the inland revenue (let say A is in the tax bracket of 10%, he/she is entitle to claim back the balance 17% from the inland revenue). as long as they are in the tax bracket lower than 27% category. And vice versa for the higher income group (need to pay another 1 % to the inland revenue if he is in the 28% tax bracket).

With the one tie new system (budget 2008), the section 108 account will be abolished (not later than 2013 , giving 6 years to be implemented ) The inland revenue will tax the company directly for the any dividend declared. Thus, all dividend declared will be considered as nett. No further tax can be reclaimed back for the lower income group as mentioned above.

As for the company…..there is no much different (they can only declare dividend if have free cash) with one exception that the surplus fund (if any)that utilized for investment for capital gain can be exempted from the computation of income tax.

Hopes you can be more careful in yr statement especially pertaining to issues that inherent with some technicalities/complexities.

LiewCF & Mr Lim, I have attached a small portion of comment #8 into the forum. Please advise me if any of you guys doesn’t agree with that so I could remove it.

Glad if you guys could participate in the discussion.

Well, if you are tax at 5% and you purposely spend RM300 in sports equipment just to get the tax relief, you only save RM15 (RM300*5%) of tax and on another hand you wasted your RM300 and end up you loss RM285. On another hand, even if you do spend money in sports equipment and tax at max on 28%, you only save RM84. This is not much rite?

The free tax dividend is a trap to the low income group, where the dividend we receipts is actually at net of tax on the company tax which is 26% in YA2008. It is a loss for tax payer who have lower income which is tax at a lower rate. Before this, we will get the refund on the different tax rate.

Seem like no goodies for IT sector or bloggers.

The RM5000 claim on Postgraduate studies is a fantastic news for me but need to check whether it is applicable for this year income tax submission or next year since I’m hopefully to complete my studies by end of next year.

A maximum fee of RM1,000 is nonsense. If you bought RM3,000,000 (three millions) value of shares, please still pay your RM900 clearing fees (the 0.03%).

0.04% to 0.03% mean almost nothing to retail investors. How much different if you buy RM20k of shares? It is just RM2 different. Scratch your head right? What for?

Charge per transaction fixed at RM40 is really bad. For example, you purchase RM2000 value of shares, you have to pay RM40 which is equal to 2%. Think about buy and sell, immediate lost of 4%. If you trade 10 times in a year, the commissions eat up 40% from your investing capital. Warren Buffett is making 28% average in annual compound return. You have to be two/three times smarter then Buffett in order to survive. Can you?

We have no choice, in order to truly enjoy the 0.42% internet transaction commission charge, we have to buy RM9523 shares and pay the RM40 (the 0.42% which is negotiable). Secondly, don’t trade 10 times in a year but buy and hold or sell after few years. Again, can you?

Why board lot change from 1000 shares/lot to 100 shares/lot earlier? It simply tricked you to pump more money into share markets and suffered the minimum RM40 charge soon.

Be smart and be careful! Correct me if I am wrong and what do you think?

I wonder, how many percent is that? I mean how many percent do they tax you?

Do you think it is better to register a company and declare those earning as company profit? because if you’re getting a house or car, usually they tax you after you spend the money (installment) unlike personal income tax which is the other way round.