In a statement today, the IRB said according to Section 4 of the Income Tax Act 1967, a business income will be imposed tax after taking into account all expenditures allowable in business and tax relief claimable by the traders.

“For online businesses undertaken by an individual, their income tax will follow the individual tax rate starting from zero per cent up to 28% (from year of assessment 2016).

“For online businesses carried out by companies, the income tax rate imposed is between 19% and 24%,” it said.

Thus, it said it was clear that income tax on online businesses was not a new matter, whereby it is the same income tax imposed on conventional businesses.

The IRB added it took the initiative to publish technical guidelines with regards to the income tax treatment for electronic commerce (e-Dagang) titled “Guidelines on Taxation of Electronic Commerce” in 2013.

The guidelines and brochures can be downloaded from IRB’s website at www.hasil.gov.my.

-BERNAMA