Sunday, January 22, 2006

Anything won or inherited need not be declared to IRB

The Sunday Star

KUALA LUMPUR: Everyone hopes to win RM1mil in a lottery or big cash prizes in a contest.

But how many stop to think if the taxman has the right to claim a piece of the pie?

According to a tax consultant here, only money considered as income earned is taxable.

Cash won in newspaper contests, TV game shows and other competitions are categorised as capital or windfall gain and need not be declared in a person’s income tax return form.

“In Malaysia, only income earned is taxed unlike in other countries such as the United States or Britain,” said the consultant.

“Anything you get through inheritance, luck or chance is considered a windfall or capital gain and is not taxable.”

The consultant said that while one might choose to declare cash or prizes won in a contest, those who didn't do so weren't committing a punishable offence.

“Even if you do declare your prize, a conscientious tax officer at the Inland Revenue Board would tell you that it is not necessary,” he said.

The consultant also said that Malaysian professional athletes who were awarded big cash prizes, apartments or cars for their achievements were also exempted from paying income tax on them.

The same applies for those who hold winning 3-D or 4-D tickets bought from legalised gaming outfits.

A representative of the Malaysian Institute of Taxation said that lottery winnings were generally not subjected to tax as they were considered as windfall gains.
Related Posts Plugin for WordPress, Blogger...