Key Note

The Malaysian government requires all registered companies to file their corporate tax according to the country’s regulations. Engage our Malaysia corporate tax filing services to get strategic tax planning to maximise overall gains.

Corporate Tax in Malaysia

Malaysia corporate tax rate is as low as 24%. Attracting entrepreneurs all around the world to set up a company in the country.

Below are the documents you require to file your corporate tax in Malaysia to clarify.

  • Company profile
  • Section 14 form
  • Passport of directors
  • Financial statement OR management account
  • Bank statement
  • Tax computation
  • Form C

Download the full Malaysia company incorporation checklist now.

Check Your Tax Payable

Enter your chargeable income to generate the net tax payable for local SMEs and non-local company or branch.

Assume Chargeable Income

Local SME
First RM 600K (17%)
Remaining amount (24%)
Net tax payable
Effective tax rate
Non-Local Company/Branch
Amount above RM 0 (24%)
Net tax payable
Effective tax rate

What Are the Important Steps to File Corporate Tax?

When it comes to filing corporate tax in Malaysia, companies have specific responsibilities to fulfill. Here is a breakdown of the procedure that corporate businesses must follow:

Step 1: Filing Estimated Tax Payable

Companies can file their estimated tax payable through e-Filing (e-CP204) or by submitting it to the LHDNM Processing Centre.

For new companies, they must file their estimated tax within 3 months of commencing operations.

Existing companies should file the estimated tax payable 30 days before the start of a new year.

Step 2: Payment of Estimated Tax

Corporate companies are required to pay the estimated tax through CP207 on or before the 10th of each month.

New companies commence paying this tax from the 6th month of the basis period.

Existing companies start paying this tax from the 2nd month of the basis period.

Step 3: Furnishing Form C

After the estimated tax payment, companies need to furnish Form C.

Which can be done through e-Filing (e-C) or the LHDNM Processing Centre.

Reach our Representatives

The best way for the foreigners who want to enter Malaysia’s market, is to engage a company incorporation service provider. That provides you one stop service, from registering a business all the way to post-incorporation.

Reach out our sale representative for register a company in Singapore

What is Corporate Income Tax in Malaysia?

Corporate income tax in Malaysia refers to the tax imposed on the profits earned by companies operating within the country. It is an essential aspect of the Malaysian tax system and is regulated by the Inland Revenue Board of Malaysia (IRBM).

In Malaysia, the company’s residency status and amount of generated income determines the corporate income tax rate. Resident companies, companies incorporated or managed in Malaysia, are subject to a progressive tax rate. This tax rate can range from 17% to 24% based on their chargeable income.

On the other hand, a 24% taxation rate on Malaysia-sourced income applies to non-resident companies. In other words, this flat tax rate applies to companies not incorporated nor managed and controlled within Malaysia.

It is important for companies to comply with the tax regulations and fulfill their tax obligations in Malaysia. This includes maintaining proper accounting records, submitting annual tax returns, and paying the required taxes within the stipulated deadlines.

To encourage investment and economic growth, the Malaysian government offers various incentives and tax exemptions to eligible companies. These incentives include pioneer status, investment tax allowances, and tax exemptions for specific industries or activities. Companies that qualify for these incentives can enjoy reduced tax rates or exemptions for a certain period, which helps to boost their profitability and competitiveness.

Navigating the complexities of corporate income tax in Malaysia can be challenging, especially for foreign companies or those with intricate financial structures. Seeking the assistance of tax professionals or accounting firms experienced in Malaysian tax laws can ensure compliance, optimize tax planning, and minimize tax liabilities.

What is the Corporate Tax Rate in Malaysia?

The corporate tax rate in Malaysia depends on the company’s residency status and the amount of income generated. Here is an overview of the current corporate tax rates in Malaysia:

Resident Companies:

During 2021 and onwards, the corporate tax rate for resident companies is a progressive rate ranging from 17% to 24%.

The tax rates are as follows:

  • 17% on the first RM600,000 of chargeable income.
  • 24% on portion of chargeable income exceeding RM600,000.

Non-Resident Companies:

Non-resident companies, companies not incorporated nor managed or controlled in Malaysia, are subject to a flat tax rate. This flat tax rate is 24%, and only applies to income sourced from Malaysia.

Type of Company Chargeable Income (MYR) CIT rate for year of assessment (%)
2022 2023
Resident company (other than company described below) 24 24
Resident company:

  • with paid-up capital of MYR2.5 million or less, and gross business income not more than MYR50 million.
  • that does not control, directly or indirectly, another company that has paid-up capital of more than MYR 2.5 million, and
  • is not controlled, directly or indirectly, by another company that has paid-up capital of more than MYR 2.5 million.
  • with no more than 20% of its paid up capital being owned directly or indirectly by a foreign company or non-Malaysian citizen (w.e.f YA 2024).
 On the first 150,000 17 15
On the next 450,000 17 17
In excess of 600,000 24 24
Non-resident company 24 24

It’s important to note that these tax rates are applicable to the chargeable income of the companies. Companies calculate their chargeable income by deducting allowable expenses and tax incentives from their total income.

Additionally, certain industries and activities qualify for tax incentives or exemptions. These tax incentives/exemptions are specific and dependent on the industry, and are provided by the Malaysian government. These incentives aim to promote investment and economic growth in targeted sectors. Thus, eligible companies may be able to enjoy reduced tax rates or exemptions for a specified period of time. With these benefits being subject to meeting the criteria’s set by the relevant authorities.

Malaysia Tax Incentives for Businesses

To encourage more investors and businesses to set up in Malaysia, the government has initiated a range of tax incentives. Here are some key tax incentives:

Resident SMEs:

Small and Medium Enterprises (SMEs) receive reduced tax rates. Given that they have less than RM2.5 million paid-up share capital at Year of Assessment start.

In order to encourage and support smaller businesses, SMEs only pay 17% on the first RM600,000 of taxable income.

Companies with MSC Status:

Businesses that acquire the prestigious Multimedia Super Corridor (MSC) status are eligible for significant tax exemptions.

MSC status companies benefit from tax exemptions, for up to 5 years. Companies that reside in the Technology and digital sector especially seek to gain MSC status.

Newly established Companies:

New companies incorporated in Malaysia receive a corporate tax exemption during a specific period before commencing their operations.

Thus offering a valuable reprieve to newly formed businesses as they establish themselves in the market. The duration of the tax exemption may vary.

When Do I Pay Corporate Tax in Malaysia?

For recently registered companies in Malaysia, there are specific requirements regarding tax filing and payment. Recently registered companies must estimate and submit their payable tax within 3 months of registration. Additionally, starting from the 6th month of the assessment year, monthly tax installments are due 15th of each month.

At the end of the assessment year, every company must file its tax return through the e-filing portal. If the payable tax amount exceeds the previously estimated amount, the company is responsible for paying the remaining balance. Conversely, if the actual tax amount is lower than the estimated amount, the company may apply for a tax refund.

However, there is a different criterion for Sdn Bhd companies with a paid-up capital of 2.5 million or less. These companies are exempt from submitting the estimated payable tax for the first two assessment years.

It’s important for companies to adhere to these tax filing and payment obligations to ensure compliance with Malaysian tax regulations. Seeking guidance from tax professionals or consulting with accounting firms experienced in Malaysian tax laws can provide further assistance and ensure accurate compliance with these requirements.

Paul Hype Page as Your Trusted Tax Agent in Malaysia

As your trusted tax agent in Malaysia, we will assist you in dissecting the complex tax structure and finding a solution that works best for your company’s interests. Here are some of the benefits of engaging us as your tax agent:

  • Get expert advice for your tax-related questions. With our help, you’ll improve your tax deductions, specific deductions, and double deductions to reduce the burden on your expenses.

  • Assist in tax compliance and planning to keep you up to date with the latest regulations and interpret any changes.

  • Reduce complexities by leaving the work to us to compute your tax based on the tax system in Malaysia.

  • Maximise your opportunity to benefit from tax allowances and tax incentives.

  • Avoid trouble with tax planning and reduce chances of heavy penalties for issues such as tax mistakes and timeliness.

When should you consider using a tax agent?

Here are some situations where it will be advantageous to engage a tax agent like Paul Hype Page.

Erroneous Past Tax Returns

If you have made errors in your past tax returns, it is important to seek professional advice. A tax agent can assist you in filing an amended return. Altogether minimizing any damage caused, and guiding you on the next best steps to take.

New Business Start-up

Hiring a tax agent for your business can be a wise investment in the long run. It saves you time and hassle, allowing you to focus on your business while leaving the tax matters to the professionals who are knowledgeable in tax regulations and requirements.

Inheritance

Malaysia does not have any form of death tax, estate duty, or inheritance tax. But you should still consult a tax professional before filing your tax returns. Because they’ll explain the tax implications and ensure proper tax return filing for the deceased’s estate.

Change in Marital Status

Whether you have recently married or divorced, a tax professional can provide advice on the best way to handle your taxes. For divorced couples, filing separately is generally recommended to avoid being liable for each other’s unpaid taxes. A tax agent can also assist in ensuring proper handling of alimony payments, if applicable.

Time Constraint

Filing tax returns can be time-consuming and frustrating, especially when your tax situation is complex. That’s why you should engage a tax agent. They save you time & find tax breaks thanks to their professional experience. Tax agents can additionally help identify potential tax incentives you’re eligible for that you didn’t even know about.

Lack of Knowledge

It’s easy to make mistakes and incur penalties, especially if you have limited knowledge about taxation in Malaysia. For this reason, you should rely on a tax agent to help, as they’re experts in tax laws and regulations. They can help you navigate sales tax rules and avoid mistakes, such as unintentional tax evasion or similar tax crimes. Their expertise ensures compliance with tax regulations and minimizes the risk of penalties.

Your Questions, Answered

Based on our experiences with clients, here are the top questions that are frequently asked.

Tax administration in Malaysia is based on the concepts of paying, self-assessing, and filing. Employers deduct tax monthly from salaried individuals from the employment income. On the other hand, business owners may pay tax from their business income in instalments.

Taxpayers are to compute their own taxes and submit the ITRF to the IRB. Individuals filing the ITRF must submit payment to cover any remaining income tax owed from underpaid monthly installments. Or they can claim a refund for any income tax they overpaid when submitting the ITRF.

Most countries have a higher corporate tax rate than that of Malaysia. For example, in China, India, and Pakistan, the corporate tax rate is at 25%, 34.61%, and 31% respectively, as compared to 24% in Malaysia.

Non-compliance with corporate tax regulations in Malaysia can result in penalties, fines, and other legal consequences. It is essential for companies to fulfil their tax obligations, including timely filing of tax returns, accurate reporting of income, and payment of taxes to avoid any potential issues.

In Malaysia, the deadline for filing corporate tax returns is usually 7 months after the company’s financial year-end. However, it is important to note that the deadline may vary based on the specific circumstances of the company. With this in mind, it is advisable that you consult with tax professionals. Or that you refer to the latest guidelines from the Inland Revenue Board of Malaysia (LHDNM).

Yes, companies in Malaysia are eligible to claim various tax deductions and incentives to reduce their taxable income. These include deductions for business expenses, capital allowances, reinvestment allowances, and specific incentives provided by the government for certain industries or activities.

SST is a transaction-based tax on goods and services, while corporate tax is imposed on a company’s income. SST is paid by businesses when they sell goods or provide services, while corporate tax is based on the company’s taxable income.

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Our Malaysia Corporate Tax Services

We’re specialised in handling corporate taxation in Malaysia, ensuring that your tax compliance meets the standards required for corporate tax submissions and tax filings, while advising you on tax exemptions and incentives.

Keeping you updated with Malaysia’s corporate tax compliance regulations and deadlines.

Preparation, filing, and reviewing of estimated chargeable income and tax provision calculations.

Overseeing of the processing and reviewing of Form B and Form P.