Individual Income Tax Return — Borang BE (Malaysia)

An Individual Income Tax Return — Borang BE in Malaysia sets out the income, deductions, and tax position to be reported to the authority.

Malaysian resident individuals are taxable on their worldwide income under Section 3 of the Income Tax Act 1967, subject to exemptions and double taxation agreements (DTAs) entered into by Malaysia with over 70 countries. Non-resident individuals are taxable only on income derived from Malaysia under Section 3 of the Act, at a flat rate of 30% without personal reliefs. Residency for Malaysian income tax purposes is determined under Section 7 of the Income Tax Act 1967 — an individual is resident if physically present in Malaysia for 182 days or more in a calendar year.

Income tax in Malaysia operates on a self-assessment system (SAS) introduced in 2004, under which taxpayers are required to compute their own chargeable income and tax payable, and to pay by the due date. LHDN retains the right to audit returns within 5 years of the year of assessment under Section 91(3) of the Income Tax Act 1967. Monthly Tax Deduction (Potongan Cukai Bulanan, PCM) under the Income Tax (Deduction from Remuneration) Rules 1994 requires employers to withhold and remit monthly income tax from employees' salaries, reducing the residual tax liability at year-end.

Personal tax reliefs available to individual taxpayers in Malaysia under Part IX of the Income Tax Act 1967 and annual Finance Acts include: individual relief of RM 9,000; spouse/alimony relief; child relief (RM 2,000 per child under 18, RM 8,000 per child studying at tertiary level); education fees relief; medical expenses; SSPN education savings; EPF and life insurance relief; and special relief for COVID-19 related expenses (where applicable for historical year of assessments). The Employees' Provident Fund (EPF) contribution relief under Schedule 3 of the Income Tax Act 1967 is RM 4,000 per year of assessment.

The legal framework governing the Individual Income Tax Return — Borang BE (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Individual Income Tax Return — Borang BE (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Income Tax Act 1967 (Act 53) sets the foundational requirements.

A Malaysia Individual Income Tax Return (Borang BE) is required to be filed by all resident individuals who have chargeable income for the relevant year of assessment, and by non-resident individuals who derived income from Malaysia.

Borang BE is needed when a salaried employee in Malaysia has employment income above the chargeable income threshold after personal reliefs — which for the year of assessment 2023 is RM 34,000 for a single individual with a RM 9,000 personal relief, RM 4,000 EPF relief, and a RM 2,000 lifestyle relief. All employees with annual gross salary above approximately RM 48,000 are likely to have a filing obligation.

Borang BE is required when a Malaysian individual receives rental income from residential or commercial properties — including room rental income — under Section 4(d) of the Income Tax Act 1967. Rental income is taxable net of allowable deductions including mortgage interest, quit rent, assessment tax, insurance, repairs, and management fees.

Borang BE is needed when an individual receives dividends from Malaysian companies. Under the single-tier dividend system effective from 2008, most dividends received from Malaysian resident companies are exempt from individual income tax under Section 12 of the Finance Act 2007 amending Section 12(h) of the Income Tax Act 1967 — but dividends from foreign companies or from non-resident sources remain taxable.

Borang BE is required when a foreign national or expatriate who is a Malaysian tax resident — having been in Malaysia for 182 or more days in the year of assessment under Section 7 of the Income Tax Act 1967 — derives income from Malaysian sources including employment income paid by a Malaysian employer, rental of Malaysian properties, or consulting fees from Malaysian clients.

Borang BE is needed when a retired individual receives pension income from a former employer or pension fund that is not fully exempt, or receives annuity or deferred compensation payments from a Malaysian source that must be declared under Section 4(e) of the Income Tax Act 1967.

A complete Malaysia Individual Income Tax Return (Borang BE) must cover the following essential components.

Taxpayer identification: Full legal name as per MyKad, income tax reference number (No. Cukai Pendapatan, beginning with SG or OG for individuals), MyKad number, and the year of assessment. The taxpayer's residential address, email, and telephone number registered with LHDN.

Employment income declaration: Gross employment income from all employers during the year of assessment under Section 4(b) of the Income Tax Act 1967. Benefits-in-kind (BIK) valued under Schedule 1A of the Income Tax (Benefits in Kind) Rules 2005 must be included — including company car, housing allowance, club membership, and stock options. The EA Form (annual salary statement) issued by the employer under Section 83 of the Income Tax Act 1967 is the primary source document.

Other income sources: Rental income from properties under Section 4(d) net of allowable deductions. Royalties, pensions, and annuities under Section 4(e) and 4(f). Any income from outside Malaysia that is brought into Malaysia if applicable for relevant year of assessments.

Personal reliefs and deductions: Computation of all allowable personal reliefs under the Income Tax Act 1967 and the relevant Finance Act — including individual relief (RM 9,000), spouse relief, child relief, education fees, medical expenses, life insurance and EPF contributions (up to RM 4,000 combined), and any special reliefs announced in the annual Budget.

Tax computation: Calculation of chargeable income (aggregate income minus reliefs) and income tax payable at the progressive rates under Schedule 1 of the Income Tax Act 1967 — from 0% for chargeable income up to RM 5,000 to 30% for income above RM 2,000,000 (rates for YA 2023). The computation deducts Monthly Tax Deduction (PCM) already withheld by the employer and any tax credits under DTAs.

Repayment or balance due: The net tax payable after deducting PCM already paid. If PCM exceeds the tax liability, the excess is a tax refund claimed through the Borang BE submission. If there is a balance due, payment must be made by 30 April (manual) or 15 May (e-filing) to avoid interest charges under Section 103 of the Income Tax Act 1967.

Declaration: The taxpayer's declaration that the return is correct and complete, with signature and date. For e-filing through MyTax, the declaration is made by entering the taxpayer's e-Pin or MyKad digital authentication.

Additional compliance elements for a Individual Income Tax Return — Borang BE (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.