Below is the email that I sent to the Inland Revenue Board (IRB) of Malaysia regarding tax for internet businesses, such as blogs and websites which generate money from foreign companies, such as Google Adsense or its equivalent.

Hi,>>I am about to start an Internet business using blogs. I am trying to>make money from Google's advertising services, Adsense. But if they pay>me, it'll be in US dollars and the cheque will be sent to me in the>mail. Will I need to declare this as earned income? Or are there other>rules and regulations for Internet businesses?>>Thanks,>>-William

Here is their reply.


Dear William,

Your e-mail dated 28/08/2008 refers.

There are no specific income tax rules for internet businesses. The income that you earn has to be converted to Ringgit Malaysia and declared in the Return Form for that year.The conversion rate is available in the Guide Book which can be accessed on our website www.hasil.gov.my by clicking forms > B/BE 2007 Guide Book.

Thank You.

S.PirahaspathyCustomer Service CentreInland Revenue Board of Malaysia.

So it seems that there is still quite a ‘Grey area’ for Internet businesses, as they mentioned that there are still no ‘specific rules’ for internet businesses as of yet. The forms can be downloaded as shown below.

• B Form 2007 (Business, employment and other income)
• BE Form 2007 (Employment and other income, without business income)

My advice however, is to declare everything you earn, as you never know when you might get audited. If you run your blog as a business, perhaps you could find a way to get tax benefits from tax deductible business expenses? I’m still not sure about what these could be, but I’m going to read up and find out for myself.

For money received from outside Malaysia (i.e. Google Adsense), a local blog I’ve visited quoted:

Tax Exemptions For Individuals
12. Income Remitted from Outside Malaysia
With effect from the year of assessment 2004, income derived from outside Malaysia and received in Malaysia by resident individual is exempted from tax. (Link)

Original post here.

So to clarify, I’ve emailed the government department, The Inland Revenue Board (IRB) at http://www.hasil.org.my/english/eng_index.asp, whether or not they reply me is another question. I’ll let you know what they say.