Corporate Tax in Malaysia

Overview by
Tax Base For Resident and Foreign Companies
Sales tax apply to non-residents.

Tax Rate

Corporate tax standard rate 25%
Corporate tax rate for resident small and medium-sized entreprises (with capitalisation under MYR 2.5 million) 20% on the first MYR 500,000 then 25%
Tax Rate For Foreign Companies
There is no distinction between resident and non resident companies or the subsidiaries of foreign companies for the method or the rate of taxation.
Capital Gains Taxation
The tax rate on company profits is 25%. For any additional information.
Main Allowable Deductions and Tax Credit
The tax on SMEs is 20% on taxable profits up to 500 000 MYR, the balance being taxed at 26%. Only the deduction of spending carried out totally and exclusively in connection with profits is authorized. Losses can be deducted whatever the source for the same financial year: revenue from exploitation, dividends, holdings etc. They can be carried forward indefinitely to be deducted later. For any additional information.
Other Corporate Taxes
Companies carrying out activities upstream of the petroleum industry are taxed at 38% (petrol income tax).

Excise duties are levied on selected products manufactured in Malaysia, namely cigarettes, tobacco products, alcoholic beverages, playing cards, mahjong tiles and motor vehicles.


Country Comparison For Corporate Taxation

  Malaysia East Asia & Pacific United States Germany
Number of Payments of Taxes per Year 12.0 24.5 11.0 16.0
Time Taken For Administrative Formalities (Hours) 145.0 218.2 187.0 215.0
Total Share of Taxes (% of Profit) 33.7 35.4 46.8 48.2

Source: Doing Business

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

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  • Azmi & Associates

    Corporate Law Firm, Malaysia