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Guide to Form A Company in Malaysia

FAQ's all about to Form a Company

Corporate Tax in Malaysia

This page provides detailed information about the Malaysia Tax System. Paul Hype Page & Co. strives to help corporations with their strategic tax planning. We provide the following tax advisory and accountancy services:

The Inland Revenue Board of Malaysia (IRBM) reports the Corporate Tax Rate in Malaysia as it stands at 25 percent and averaging at 25.67 percent from 2006 until 2014, reaching an all time high of 28 percent in 2006 and a record low of 25 percent in 2009.

How to Submit Your Income Tax

Every individual who is liable for tax is required to declare his income to IRBM. The taxpayer is responsible for:

Obtaining and forwarding the Income Tax Return Form (ITRF):

The taxpayer has to send or submit the ITRF that has been duly completed before 30th April every year to the address below:

Information Processing Department
Inland Revenue Board of Malaysia
Ground Floor, Menara Hasil
No. 3, Jalan 9/10
Seksyen 9
43650 Bandar Baru Bangi
Selangor Darul Ehsan

Documents needed for Record Keeping

Taxpayers are required to keep the following documents for 7 years:

  1. EA/EC Form
  2. Original dividend vouchers
  3. Insurance premium receipts
  4. Books purchase receipts
  5. Medical receipts
  6. Donation receipts
  7. Zakat receipts
  8. Children`s birth certificates
  9. Marriage certificate
  10. Other supporting documents
  11. Working sheets (if any)

 

The calculation of the 7-year period begins from the end of the year in which the ITRF is filed.

Tax Administration

Tax administration under SAS is based on the concept Pay, Self Assess and File.

Pay: Monthly salary deductions are made for individuals with an employment income, or through installments for individuals with a business income.

Self Assess: Taxpayers compute their own taxes.

File: The ITRF is submitted to the IRBM together with the payment for the balance of the income tax payable to meet any shortfall in the monthly payments or a claim for repayment if there is an overpayment.

Expatriate Tax

Liable for Malaysian tax conducting business through a permanent establishment in Malaysia and assessable on income accruing in or derived from Malaysia.

Non-resident Tax rate
Types of income Rate (%)
Business
Rental
25
Dividend (Franked)
Dividend (Single tier)*
25
0
Entertainers professional income 15
Interest 15
Royalty 10
Special classes of Income:
  • Rental of movable property
10
  • Fees for technical or management services performed in Malaysia
10
  • Payment for services rendered in Malaysia in connection with use of property or installation or operation of any plant, machinery or other apparatus purchased from a non-resident person
10
Real Estate Investment Trust (REIT)
  • Other than a resident company
10
  • Non-resident company
25
  • Foreign investment institution
10
Effective from 01/01/2007

 

*With the introduction of the single tier dividend system effective 1.1.2008, all dividends are tax free in the hands of the shareholders. However companies with section 108 credit under the old imputation system are given a transitional period until 31.12.2013 to frank normal dividends so as to enable them to exhaust their section 108 credit.

Corporate Tax

Companies, limited liability partnerships, trust bodies and cooperative societies that are dormant and / or have not commenced business are required to furnish the ITRF (including Form E) with effect from Year of Assessment 2014.

For further reference please refer to the  Filing Programme for Return Forms in the Year 2015

Every taxpayer who is liable for tax is required to declare his income to IRBM. The taxpayer is responsible for:

Obtaining and forwarding Income Tax Return Form (ITRF).

A company has to send or return the ITRF that has been duly filled, without attached documents, to the address below within 7 months after the close of the accounting period.

Information Processing Centre
Inland Revenue Board of Malaysia
Ground Floor, Menara Hasil
No. 3, Jalan 9/10
Seksyen 9
43650 Bandar Baru Bangi
Selangor Darul Ehsan

Supporting documents need not be enclosed, except in repayment cases where dividend vouchers need to be enclosed with the ITRF.

  1. Submitting tax estimation and paying installment within the stipulated period
  2. Computing the company income tax
  3. Declaring income and expenses including deductions and rebates.
  4. Keeping records for audit purposes

 

The Inland Revenue Board of Malaysia (IRBM) reports the Corporate Tax Rate in Malaysia as it stands at 25 percent and averaging at 25.67 percent from 2006 until 2014, reaching an all time high of 28 percent in 2006 and a record low of 25 percent in 2009.

Corporate Tax Compliance in Malaysia has become more complex under the regulatory scrutiny of the Inland Revenue Board Of Malaysia. Paul Hype Page ensure both your company and your compliance meets to the standard required in submitting for Corporate Tax in Malaysia.

 

Plan your finances and taxes wisely.

 

Paul Hype Page & Co. is an ACRA-certified business adviser. Paul Hype Page Consultants would be able to give you more information and assistance on policy updates, compliance regulations and changes to tax conditions. Our team of seasoned professionals can also help you set up a company in Singapore very quickly and easily following all legal entities, and offer you sound advice on how to make it successful too.

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By Eric Eio
Managing Partner of Paul Hype Page & Co.

Eric was awarded an ACCA graduate in 2000 and also graduated from University of Sydney with a Bachelor degree in Computer Science & Accounting. Since graduation, he had worked in Big 4 as an auditor , including a one year overseas stint with Ernst & Young, Shanghai in 2005. He left his last appointment as an Audit Managerial position with PricewaterhouseCoopers, Singapore in 2008 before setting up his own Certified Public Accountant Practice – Paul Hype Page & Co. His firm is being selected to be one of the advisory panel for Singapore top 500 SME.

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