My web site is generating USD1,500 per month, approximately RM5,000 and RM60,000 per annual. All adsense cheques have been deposited into the same account without any withdrawal.

My question is: Do I have to pay income tax for this earning?

now tat's a question where i would like to know also..anybody?

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Boonage - Freedom is Everything

Hi again,

I just checked out the Malaysia inland revenue web site. It stated that if the profit that gain from foreign country is exempted from tax. Which means Adsense profit no need to pay tax.

* correct me if im wrong

I can't find where it says that (can you give the link and the quote?), but I believe the position is that it is exempted from tax if tax is already paid in that foreign country and comes under a double taxation agreement.

i.e. if you pay tax on Google Adsense income in the US then you don't need to pay tax in Malaysia on that money. Unless you are filing with the US tax authorities, then it would seem this is not likely to be the case. Correct me if I am wrong!

Also, and this has been discussed here previously, if the work to earn the money is carried out here (building the site, maintaining the site, handling the finances, etc.) then the money can be considered earnt here and hence you must pay Malaysian tax on it.

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If you do not intend to buy houses or cars with your adsense earnings then you can escape the tax.

I work full time at home now, and I'm going to file income tax end of this year as advised by a friend who works as an accountant.

sherly, do you mean buying houses or cars via a loan instead of in cash? Is that because you need proof of income in order to apply for the loan? Assuming you are paying cash I cannot see how it would make any difference to the likelyhood of you being caught for tax evasion.

At the moment Malaysia isn't doing a lot to track down Adsense earning. One day they will do so, you can be certain of that. Google will willingly provide them with list of all those in Malaysia who have been paid money by Adsense in the past and how much they have earnt.

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You are right, either way we cannot avoid the tax. Report tax if u wanna play safe.

yup, the msia gov will soon be tracking on adsense earning, and tat's the time where they finally recognize the power of blogging and internet usage!

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Boonage - Freedom is Everything

Scope of Taxation

Extracted from Lembaga Hasil.

1. For Resident Individual
A Resident individual is assessable on income derived from sources in Malaysia and income received in Malaysia from outside Malaysia. W.e.f. Y/A 2004 income remitted into Malaysia from overseas by a resident individual, a trust body, a cooperative and a Hindu Joint Family be exempted from income tax

2. For Non-Resident Individual
A Non-Resident individual is assessable only on income derived from sources in Malaysia.

3. For Resident Company
A Resident company is assessable on income derived from Malaysia and income remitted to Malaysia from sources outside Malaysia.

Starting Year of Assessment 1995 onwards only income derived from Malaysia are taxable.

Banking, insurance, shipping and air transport businesses are taxed on world income scope. The Imputation System is applicable.

4. For Non-Resident Company
A Non-Resident company is liable to Malaysian tax when it carries on a business through a permanent establishment in Malaysia and is assessable on income derived only from sources within Malaysia.



I am non resident so I do not need to pay income tax.

YOU?

It is probable that if you have maintained or build your website whilst in Malaysia then they will claim Adsense is derived in Malaysia.

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How about this.

Sales generated when the site visitors click the ads, I didn't ask them to click.

The sites are not belong to me(they are free websites like blogger), and the contents is not written by me, neither the ads. Like this, I think it should be sourced from outside malaysia leh.

Anyway, believe it or not it is just a joke.

You still uploaded the content from Malaysia... wrote it here....

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Nope.
Do you?

If your website was created and managed entirely without any action from you in Malaysia then I think you have a good case. Even if you have posted a project for a freelancer abroad to do it, you still did your part of the work from Malaysia...

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You can get a freelancer with or without posting anything, is up to you how to do it.

Well, what I want to say is that pay tax or not is your own decision solely.
Ask your tax consultant for expert advices.