Corporate tax rates in Malaysia vary based on the company’s paid-up capital and the industry in which it operates. For example: 

• Companies with paid-up capital of RM2.5 million or less may qualify for a reduced tax rate on the first RM600,000 taxable income, with a standard rate applicable beyond this threshold. 

• Larger companies are subject to the standard corporate tax rate, currently 24%. 

Speak with a tax advisory expert to understand the specific tax rate that applies to your business. 

Companies operating in Malaysia may be liable for the following types of taxes: 

• Corporate Income Tax – Levied on taxable income earned within the country. 

• Withholding Tax – Applied to payments made to non-residents, such as royalties and interest (subject to double taxation agreements). 

• Sales and Service Tax (SST) – Payable on taxable goods and services. 

• Real Property Gains Tax (RPGT) – Charged on profits from property disposal. 

Understanding the types of taxes your company is liable for is crucial for compliance and financial planning. 

Malaysia offers various tax incentives to promote economic development and attract investment. Key incentives include: 

• Pioneer Status – Provides income tax exemptions for a specific period to businesses in promoted sectors. 

• Investment Tax Allowance (ITA) – Grants tax deductions on qualifying capital expenditure. 

• Reinvestment Allowance (RA) – Applicable for businesses expanding or upgrading their production capabilities. 

These incentives can significantly reduce your tax burden. Engaging professional tax advisory services ensures you fully leverage these benefits. 

Tax advisory services play a vital role in helping businesses manage their tax obligations effectively. Benefits include: 

• Optimising Tax Liabilities – Ensuring your business takes advantage of allowable deductions and incentives. 

• Achieving Compliance – Guiding to avoid penalties and meet all regulatory requirements. 

• Strategising for Growth – Designing tax-efficient strategies to support business expansion and long-term objectives. 

Partnering with a trusted tax advisor ensures peace of mind and financial efficiency. 

The Sales and Service Tax (SST) is a consumption tax imposed on: 

• Taxable Goods – A sales tax is payable by manufacturers or importers. This is typically passed down to end consumers. 

• Taxable Services – A service tax is levied on registered businesses offering specified services, including hospitality, food and beverage, and professional services. 

The SST replaces the now-defunct Goods and Services Tax (GST). 

Withholding tax is a tax liability applied to payments made to non-residents. It typically applies to: 

• Dividends 

• Interest 

• Royalties 

• Contract payments 

• Technical or management fees 

The applicable rate varies depending on the type of income and any existing double taxation agreements between Malaysia and the recipient’s country of residence. 

A tax audit examines a company’s tax records and filings conducted by the Inland Revenue Board (LHDN) to ensure compliance with tax regulations. Preparation involves: 

• Maintaining accurate, up-to-date records of financial transactions. 

• Performing regular internal reviews to identify any discrepancies. 

• Ensuring all tax filings and payments comply with relevant legislation. 

• Seeking guidance from tax professionals to handle potential queries effectively. 

Advance preparation minimises risks and ensures a smooth audit process. 

If you have further questions or need assistance with corporate taxes, please contact our expert team for guidance tailored to your business needs.