Understanding on Company Tax Rates

Understanding on Company Tax Rates

To start up a business in Malaysia, a better understanding of company income tax requirements by the Inland Revenue Board (LHDN) and the Royal Malaysian Customs Department (RMCD) will ease the struggles faced throughout the growth of your business.

Malaysia’s company tax is administered by the Income Tax Act 1967, whereby all companies registered in Malaysia for chargeable income derived from Malaysia complies with this Act.

Corporate Income Tax (as of YA 2020 and onwards)

According to the latest rate for Year Assessment 2020 and onwards, company tax rates are categorized as followed:

  • Companies with paid-up capital of RM 2.5 million or less at the beginning of the basis period, and having gross business income of not more than RM 50 million
    • On first RM 600,000 chargeable income – 17%
    • On subsequent chargeable income – 24%
  • Companies with paid-up capital of RM 2.5 million and above at the beginning of the basis period – 24%
Year Assessment 2020:Percentage
Company with paid up capital not more than RM2.5 million
 On first RM600,00017%
 Subsequent Balance24%
Company with paid up capital more than RM2.5 million24%

To know more about the changes of Malaysian company tax rates throughout the years, please visit https://www.hasil.gov.my/en/company/tax-rate-of-company/.


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