Tax - Wikipedia. A tax (from the Latintaxo) is a mandatory financial charge or some other type of levy imposed upon a taxpayer (an individual or other legal entity) by a governmental organization in order to fund various public expenditures.[1] A failure to pay, or evasion of or resistance to taxation, is punishable by law. Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent. Most countries have a tax system in place to pay for public/common/agreed national needs and government functions: some levy a flat percentage rate of taxation on personal annual income, some on a scale based on annual income amounts, and some countries impose almost no taxation at all, or a very low tax rate for a certain area of taxation. Some countries charge a tax both on corporate income and dividends; this is often referred to as double taxation as the individual shareholder(s) receiving this payment from the company will also be levied some tax on that personal income. Overview[edit]The legal definition and the economical definition of taxes differ in that economists do not regard many transfers to governments as taxes. For example, some transfers to the public sector are comparable to prices. Examples include tuition at public universities and fees for utilities provided by local governments.
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Governments also obtain resources by "creating" money and coins (for example, by printing bills and by minting coins), through voluntary gifts (for example, contributions to public universities and museums), by imposing penalties (such as traffic fines), by borrowing, and by confiscating wealth. From the view of economists, a tax is a non- penal, yet compulsory transfer of resources from the private to the public sector levied on a basis of predetermined criteria and without reference to specific benefit received. In modern taxation systems, governments levy taxes in money; but in- kind and corvée taxation are characteristic of traditional or pre- capitalist states and their functional equivalents.
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The method of taxation and the government expenditure of taxes raised is often highly debated in politics and economics. Tax collection is performed by a government agency such as the Canada Revenue Agency, the Internal Revenue Service (IRS) in the United States, or Her Majesty's Revenue and Customs (HMRC) in the United Kingdom. When taxes are not fully paid, the state may impose civil penalties (such as fines or forfeiture) or criminal penalties (such as incarceration) on the non- paying entity or individual.[2]Purposes and effects[edit]The levying of taxes aims to raise revenue to fund governing and/or to alter prices in order to affect demand. States and their functional equivalents throughout history have used money provided by taxation to carry out many functions. Some of these include expenditures on economic infrastructure (roads, public transportation, sanitation, legal systems, public safety, education,[3]health- care systems), military, scientific research, culture and the arts, public works, distribution, data collection and dissemination, public insurance, and the operation of government itself. A government's ability to raise taxes is called its fiscal capacity.
When expenditures exceed tax revenue, a government accumulates debt. A portion of taxes may be used to service past debts. Governments also use taxes to fund welfare and public services. These services can include education systems, pensions for the elderly, unemployment benefits, and public transportation. Energy, water and waste management systems are also common public utilities. A tax effectively changes relative prices of products. Therefore, most[quantify] economists, especially neoclassical economists, argue that taxation creates market distortion and results in economic inefficiency unless there are (positive or negative) externalities associated with the activities that are taxed that need to be internalized to reach an efficient market outcome.[3] They have therefore sought to identify the kind of tax system that would minimize this distortion.[4] Recent[when?] scholarship suggests that in the United States of America, the federal government effectively taxes investments in higher education more heavily than it subsidizes higher education, thereby contributing to a shortage of skilled workers and unusually high differences in pre- tax earnings between highly educated and less- educated workers.[citation needed]Governments use different kinds of taxes and vary the tax rates.
They do this in order to distribute the tax burden among individuals or classes of the population involved in taxable activities, such as the business sector, or to redistribute resources between individuals or classes in the population. Historically,[when?] taxes on the poor supported the nobility; modern social- security systems aim to support the poor, the disabled, or the retired by taxes on those who are still working.
In addition, taxes are applied to fund foreign aid and military ventures, to influence the macroeconomic performance of the economy (a government's strategy for doing this is called its fiscal policy; see also tax exemption), or to modify patterns of consumption or employment within an economy, by making some classes of transaction more or less attractive. A state's tax system often[quantify] reflects its communal values and the values of those in current political power. To create a system of taxation, a state must make choices regarding the distribution of the tax burden—who will pay taxes and how much they will pay—and how the taxes collected will be spent. In democratic nations where the public elects those in charge of establishing or administering the tax system, these choices reflect the type of community that the public wishes to create.
In countries where the public does not have a significant amount of influence over the system of taxation, that system may reflect more closely the values of those in power. All large businesses incur administrative costs in the process of delivering revenue collected from customers to the suppliers of the goods or services being purchased. Taxation is no different; the resource collected from the public through taxation is always greater than the amount which can be used by the government.[citation needed] The difference is called the compliance cost and includes (for example) the labour cost and other expenses incurred in complying with tax laws and rules.
The collection of a tax in order to spend it on a specified purpose, for example collecting a tax on alcohol to pay directly for alcoholism- rehabilitation centres, is called hypothecation. Finance ministers often dislike this practice, since it reduces their freedom of action. Some economic theorists regard hypothecation as intellectually dishonest since, in reality, money is fungible. Furthermore, it often happens that taxes or excises initially levied to fund some specific government programs are then later diverted to the government general fund. In some cases, such taxes are collected in fundamentally inefficient ways, for example, though highway tolls.[citation needed]Since governments also resolve commercial disputes, especially in countries with common law, similar arguments are sometimes used to justify a sales tax or value added tax.
Some (libertarians, for example) portray most or all forms of taxes as immoral due to their involuntary (and therefore eventually coercive/violent) nature. The most extreme anti- tax view, anarcho- capitalism, holds that all social services should be voluntarily bought by the person(s) using them. The Organisation for Economic Co- operation and Development (OECD) publishes an analysis of tax systems of member countries. As part of such analysis, OECD developed a definition and system of classification of internal taxes,[5] generally followed below.
In addition, many countries impose taxes (tariffs) on the import of goods. Income tax[edit]Many jurisdictions tax the income of individuals and business entities, including corporations.
Generally, the tax is imposed on net profits from business, net gains, and other income. Computation of income subject to tax may be determined under accounting principles used in the jurisdiction, which may be modified or replaced by tax law principles in the jurisdiction.
The incidence of taxation varies by system, and some systems may be viewed as progressive or regressive. Rates of tax may vary or be constant (flat) by income level.
APPLY FOR MALAYSIA MY SECOND HOME (MM2. H Program)WHAT IS MALAYSIA MY SECOND HOME/WHO LAUNCHED IT? The “Malaysia My Second Home “Program was launched by the Malaysian Government in year 2. Malaysia as long as possible on a multiple- entry social visit pass for a period of ten (1. Laws of Malaysia.
It allows the successful applicant to invest in properties or business of their choice. This program is one of the most attractive long term stay visa program. This program also helps to promote tourism and the economic development of Malaysia. WHY DID FOREIGNERS CHOOSE MALAYSIA TO BE THEIR SECOND HOME? Malaysia is known as a politically stable country and one of the safest countries to live in.
The mix culture of many different races in this county are living in harmony. Cost of living is relatively low. Malaysia is an education hub with a variety of international schools. Easy connectivity to places within Malaysia and other countries with well developed infrastructure and facilities, such as modern road rail, highway, airport and seaport. Malaysia Government practices liberal investment and tax policies. Foreigners can have 1.
English and Chinese language are widely used in the country, no language barrier at all, thus, easy communication. Good Medical facilities. Weather in Malaysia is considered warm all year round, cool when it rains. One can also enjoy the cold weather at the highland resorts. Food- International cuisine is available at reasonable cost. Malaysians are known to be warm and friendly people. WHAT’S SO SPECIAL ABOUT THIS PROGRAM/WHAT ARE THE PRIVILEGES?
Processing time for the approval is within 4. MM2. H holders do not need to have minimum stay requirement throughout the 1. Children under MM2. H pass can study in Schools and College without need to apply for yearly.
Student Visa. 4. Parents of age above 6. MM2. H pass. 5. Tax- free car incentive – They can either import a car or buy car in Malaysia. The discount rate is approximately 3. Maid incentive – allowed to bring a maid from their own country. Property incentive – allowed to purchase any amount of properties with minimum purchase price of RM 5. Melaka state, 1,0.
KL, 2,0. 00,0. 00 in Selangor, Penang is RM1 million for Condominimum and RM2 million for landed property. It is not a requirement but encourage as properties in Malaysia are affordable as compared to other countries and also it is good investment. Most MM2. H holders are able to get housing loan and car loan from Malaysia bankers up to 7. MM2. H holders aged above 5.
UPDATED)1. 0. MM2. H holders can be an investor and can own 1.
Malaysia. 1. 1. They are allowed to stay anywhere in Malaysia except in Sarawak which they need to apply theprogram separately to the respective State Immigration offices, as they do not allow agents toassist in the submission of the applications. They do need not to apply entry visa from Malaysia Embassy/Consulate in their country each timethey enter Malaysia when you are holding MM2. H pass. 1. 3. Successful applicants are allowed to remit their monies in and out freely from the country, withno tax. Under the MM2. H Program, for those countries who has a “Double Taxation Agreement” with. Malaysia, their Pension Fund that is taxable in their country shall be tax free here if they live here formore than 1. The program is 1.
Fixed Deposits (after obtaining the “Conditional Approval. Letter) placed are in the applicant’s name, and can be in any bank in Malaysia. This program can be terminated at any time during the 1.
Fixed. Deposits placed with the bank under the program will be returned to the participant. Termination takesabout 5 - 7 working days!
WHAT ARE THE BASIC REQUIREMENTS/CRITERIA TO APPLYIt is open to citizens of all countries recognised by Malaysia regardless of age, religion, gender and age and applicants are allowed to bring with them their spouses and children below the age of 2. Upon approval, successful participants will receive a ‘Conditional Approval Letter with validity of (6) months period from Immigration Department of Malaysia. The approved applicant are required to land in Malaysia to complete the Visa process within this period. The main categories of application are as follows: Aged Below 5. Business Owners/Employees with proof of minimum monthly RM1. Savings Account of minimum RM5.
After approval, open a Fixed Deposit Account in any bank in Malaysia of RM3. After a period of (1) year, participants may apply to withdraw up to RM1. Malaysia. The balance of RM1. Aged 5. 0 years and above.
Business Owners/Employees with proof of minimum monthly RM1. Saving Account of RM 3. After approval, open a Fixed Deposit in any bank in Malaysia of RM1.
After a period of (1) year, participants may apply to withdraw the fixed deposit up to RM5. Malaysia. The balance of RM1. Pensioners/Retirees to show proof of monthly off- shore pension minimum income of RM1. Government approved pensions/funds. Property Purchased Category. For those already invested in cash payment for RM 1 million & more value worth of properties (in Malaysia), conditional approval will be given based on Fixed Deposit of RM 1.
RM1. 50,0. 00 (age below 5. WHAT ARE THE INCENTIVES? TAX- FREE CAR – ONLY CKD (CAR COMPLETELY KNOCK DOWN)MM2.
H holders are permitted to buy a locally manufactured or locally assembled car, tax free in Malaysia. Alternatively they can import their own car from their previous country of residence or their country of citizenship. The application for the importation has to be done within (6) months of obtaining the MM2. H Visa and the car must have been owned at least (6) months before applying for the MM2. H program. The procedure is more complicated than buying a local car.
Tax exemption for locally purchased or imported cars need to do an online application. Manual application is not accepted .
DOMESTIC HELP (MAID)Each participant is allowed to bring in one maid, should be between the age of 2. Application have to be submitted after the approval of the MM2. H Visa. EMPLOYMENTMM2. H holders are not allowed to take up employment with any company in Malaysia. TAXABLE INCOMEMalaysia does not tax income from overseas, only income earned from Malaysian sources will be liable to taxation, eg. Rental income receivable from property. MEDICAL EXAMINATION AND INSURANCEAll applicants are required to undergo a medical examination and purchase of medical insurance in Malaysia before obtaining the MM2.
H Visa Endorsement. For those who are above the age of 6. As such, this requirement can be waived. OUR SERVICES 1. Assist in summarising and preparation of all required documentations. Submission of complete application to MM2.
H Centre for approval. Assist in all subsequent follow ups requirement. To ensure that the application is approved within the reasonable time. Assist to arrange for necessary transportation and accommodation upon client’s arrival. Assist to arrange clients to open a bank account, obtaining medical insurance, arranging for medical examination and Visa Endorsement. Please send us an email @ klexpatmalaysia@gmail.