Are the commission and bonuses generated from a multi level marketing or network marketing business taxable in Malaysia and Singapore?
The answer is…Yes, of course.
Firstly, thank you for visiting Mommy Lynn Blog.
My name is Will and I am from Kuala Lumpur, Malaysia.
The above is me doing a product and MLM business opportunity sharing with a prospect.
Firstly, as a disclaimer, I am not a tax consultant.
I am writing this article to share my experience building a MLM business in Malaysia as a professional.
Me and my wife have been building our MLM business since 2018 by partnering with BE International.
BE International is a young but fast growing MLM company based in Malaysia.
The products from the company are unique and the company uses a unilevel marketing plan.
As a Malaysia based company with international expansion aspiration, the company has established its international branch offices and distribution channels in Singapore, Brunei, Hong Kong and Indonesia.
As a MLM business owner, I can assure you both me and my wife declared the commission and bonuses that we received every year from the company and pay our income tax.
Who prepares the taxable income document?
It’s the MLM company that you’ve partnered with of course!
From my experience, the MLM company will prepare a Form CP58 in order of us to prepare our income tax submission.
What is Form CP58?
According to Section 83A (1) of the Income Tax Act 1967 (ITA 1967), this provision had imposed the responsibility and duty to companies to issue and prepare form CP58 on any monetary incentive or non-monetary incentive payment to its agents, dealers or distributors.
Cheng & Co.
Cheng & Co. is a firm that offers company secretarial service to ensure the compliance of a company and provides advisory services on the companies’ laws and regulations under the Malaysia Companies Act 2016.
When you are preparing your tax submission, what are considered monetary incentive and non-monetary incentive payment?
As stated in Cheng & Co. website:
- Monetary incentive which can define as cash reward paid to its agent, dealers, or distributors. Cash reward includes basic allowance, commissions, or bonuses. The payer company must declare the full actual amount paid in the form of CP58.
- Non-monetary incentive includes incentives, tour packages, tickets accommodation, motor vehicles, house, voucher, etc. Similar as a monetary incentive, non-monetary incentive must report the actual cost into the form CP58.
Direct selling companies
How many direct selling companies are there in Malaysia?
There are thousands of companies that has the Lesen Jualan Langsung or direct selling license from the Ministry of Domestic Trade and Consumer Affairs.
There are also countless companies that are operating without a legit direct selling license.
Most large and licensed direct selling companies are registered member of the Direct Selling Association of Malaysia (DSAM).
The last I counted, there are more than 120 companies who are registered member of DSAM.
The list of DSAM members are:
- Agape Superior Living
- AM Life International
- AMC Allied Metalcraft
- Americ
- Amway
- Ana Edar
- Annkang Wellness
- ASEA Redox
- Asia Herbal Biotech
- Atomy
- Avon Cosmetics
- BE International
- Best World Lifestyle (BWL)
- Biing Han
- Brilliant Point (BPI)
- Cadware Pioneer (CW)
- CenGreen Global
- Chini Enterprise
- ChungHo Nais
- CNI Enterprise
- Conforer Global
- Cosway
- Coway
- Creative Dreams International
- Cuckoo International
- De Ocean International
- Decho Bio International
- Diamond Interest
- Doterra
- DXN Marketing
- Edmark
- Edutex Trading
- Elken
- Elo Water
- Enagic
- Excellent Household Resources
- Extend My Network
- Fitline PM International
- Flantech Asia
- Forever Living Products
- Forlife Research 4Life
- Gano Excel
- Goodarch
- Greaten Bridge
- Grolier
- HDI Network
- Healthy Futures
- Healthy Homes (Rainbow)
- Healthy Way
- Herbalife
- Home Direct Shopping
- I-Linkage Nutric
- Immeri
- Infinitus International
- Jeunesse Global
- Just Essentials
- K-Link International
- Kyani
- KZ1 Global
- Leroy International
- LG PuriCare
- Lifepharm
- LifeWave
- Luxor
- Manamana International
- Market Malaysia Shop (Shop.com)
- Mary Kay
- Max Health & Living
- Max Pine
- MD Dermatics
- MOI Worldwide
- Morinda
- MPI Multi-Pure
- N.Z. New Image
- Natural Health Farm (NHF)
- Nefful
- NHTC Wellness Product (NHT Global)
- Norwex
- Nu Skin
- ODC International
- ODO
- Ola Beleza (Natura)
- Omni AAA
- OMX Nutrition
- One Green Solution (Sollife)
- Optimo International
- Perfect Pentagon
- PHHP Marketing
- Pure N Fresh (PureNFresh)
- Qnet
- Reliv International
- Revell Global
- Richnergy International (Rich Legacy)
- Sachaway
- Sahajidah Hai-O
- Shaklee
- Shuang Hor
- Siang Hin
- Singer
- SK Networks Retails (SK Magic)
- Stemey
- Stemtech
- Stolle
- Successmore Being
- Sunrider International
- Swisderm International
- Synergy Worldwide
- Tasly
- TDC
- Thanks Ai
- Theta Mobile (Thetaedge)
- Tiens Health Development (Tiens)
- Total Reach (NewLife)
- Totalife
- Tri Wonder International
- True Mix
- Tupperware
- UGS Network
- UHS Essential Health (USANA)
- Unicity
- Vasayo
- Vii Nutrition
- Viva Life Science
- VMAlife
- Wealthy Pentagon (Easecox)
- Worldwellness
- YMR International
- Young Living
- Zhulian
- Zinzino
- 27 Venture (Twenty7)
How many direct selling companies are there in Singapore?
In Singapore, most large and licensed direct selling companies are registered member of the Direct Selling Association of Singapore (DSAS).
The last I counted, there were 27 companies who are DSAS member. The companies are:
- AMC Allied Metalcraft
- Amway
- Aphrozone
- Atomy
- BE International
- Best World Lifestyle
- Creative Network International
- DXN
- Elken
- Enagic
- Extra Excellence
- Forever Living Product
- HDI Network
- Healthy Homes Marketing
- Herbalife
- Mary Kay
- Morinda
- Nefful
- Nuskin
- Organica International
- Oriental Inchaway
- PM International
- Qnet
- Sante & Beaute
- Tupperware
- Unicity
- Usana
You can check out the DSAS member list by clicking here.
If you are a successful network marketer using the business opportunity offered by the companies listed above, you may have received bonuses and trip incentives.
If you’ve received trip incentives when you’ve qualified for travel campaign organised by the company, do you know that you also have to declare the amount of your incentive as your income?
To be honest, we did not know that we have to declare the international trip incentives that me and my wife received from the company as part of our income.
We had to resubmit all the international trip incentives that we received from the previous years after we received a call from the Inland Revenue Board of Malaysia.
In closing, if you are building your MLM business and you are receiving substantial income, you have to pay your income tax.
That is what me and my wife have to do in Malaysia.
Most probably, the ruling is the same in your country as well.
Before you leave, please read the disclaimer page on this blog.
If you still have any question, I’ll suggest you check with a professional tax consultant in your country to be sure.
Thank you for reading this article and I hope you’ve gained some value from my sharing.
If you have any question, please click the link below to contact me on WhatsApp.
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