Malaysia: Tax & Auditing Requirements


Corporate Taxes

Malaysian Corporate Income Tax is imposed on income accruing in or derived from Malaysia. A company is a tax resident of Malaysia if at any time during the year in question its management and control are exercised in Malaysia.

The corporate tax rate is 24%, except for “small” resident companies with paid-up capital for 2.5 million Malaysian ringgit (MYR) or less and which does not control or controlled by a company that has more than 2.5 million ringgit in paid up capital. These “small” resident companies are taxed at 18% on the first 500,000 ringgit and at 24% on the excess. (Source).

The value-add-tax, called a “goods and services tax”, is 6%. Social security payments must be paid for employees with monthly wage under MYR 4,000.

There are no local or state taxes on corporate income. There are no capital gains-taxes, except for real-estate. (Source).

Two tax relief schemes are available for certain categories of companies, including “High-technology companies engaged in areas of new and emerging technologies”. Under the “Pioneer Status” tax relief scheme, 70% of statutory income is exempt from taxation for five years. Under the “investment tax allowance” tax incentive scheme, 60% of qualifying capital expenditure for up to five years, used against 70% of statutory income, is tax exempt. More information can be found here.

Income Taxes

In terms of personal income tax, non-residents are taxed at a flat rate of 28%. (Source).

Audit requirements

All private limited companies incorporated in Malaysia must appoint an approved auditor for their accounts. Audits are required every years before the annual general meeting. Sole proprietorships or partnerships are not required to appoint auditors. (Source).


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