Malaysians running businesses must still declare their income annually, even if their ventures are operating at a loss, a senior Inland Revenue Board (LHDN) officer has emphasised.
According to Syed Mohd Syukree Syed Mohd Kamil, principal assistant director at LHDN Kuala Lumpur, there remains a widespread misconception among taxpayers that a lack of profit absolves them from filing income declarations.
Photo via The Borneo Post
Speaking on Bernama Radio’s Klinik Cukai segment on 8 April, he explained that loss-making businesses are no exception: “Experiencing losses is part and parcel of running a business. Regardless of whether you turn a profit, you are obligated to submit your income declaration every year,” he said.
Importantly, Syed Mohd Syukree clarified that incurring losses does not necessarily mean one will owe taxes. However, individuals with additional sources of income, such as salaries, must consolidate all earnings when filing under Form B — the designated form for those with business income.
He further noted that a wide range of individuals fall under the 'business operator' category, including YouTubers, influencers, and anyone earning from paid content or reviews. These activities are treated as business income and must be reported accordingly.
Failure to comply constitutes a criminal offence under Section 112(1) of the Income Tax Act 1967. Offenders could face fines ranging from RM200 to RM20,000, imprisonment for up to six months, or both.
Moreover, those who neglect their tax obligations risk being subjected to a comprehensive audit — a time-consuming process that scrutinises every detail of one’s financial dealings. Such audits could potentially tarnish the reputation and financial standing of the business, Syed warned.
To avoid unnecessary complications, taxpayers are advised to file their returns — via Form B or the e-B system on the MyTax portal — between 1 March and 15 July.
Syed also issued a reminder regarding expense claims: only business-related expenses are eligible, "It’s crucial to draw a clear line between business and personal expenditures to prevent errors during filing," he said, as reported by the New Straits Times.
Remember, paying taxes is not merely a legal obligation — it is part of our collective responsibility to support Malaysia!
