Malaysia Corporate Income Tax Rate

Malaysia Corporate Income Tax Rate

Malaysia adopts a territorial system of income taxation. A company or corporate, whether resident or not, is assessable on income accrued in or derived from Malaysia. Income derived from sources outside Malaysia and remitted by a resident company is exempted from tax, except in the case of the banking and insurance business, and sea and air transport undertakings. Effective from YA 2022, foreign-sourced income of Malaysian residents (companies and individuals) which is received in Malaysia may be subject to tax. Please refer to Malaysian Taxation of Foreign-Sourced Income for more information.

YA 2024 onwards

• Resident company with paid-up capital of RM2.5 million and below at the beginning of the basis period (SME) (Note 1); and having gross business income from one or more sources for the relevant year of assessment of not more than RM50 million

On first RM150,000 chargeable income – 15%
On subsequent RM150,001 to RM600,000 chargeable income – 17%
On subsequent chargeable income – 24%

• Resident company with paid-up capital above RM2.5 million at the beginning of the basis period – 24%
• Non-resident company/ branch – 24%

Note 1:

A SME is defined as a company resident in Malaysia which has a paid-up capital of ordinary shares of RM2.5 million or less at the beginning of the basis period of a YA provided:

• Not more than fifty per cent of the paid-up capital in respect of ordinary shares of the company is directly or indirectly owned by a related company;
• Not more than fifty per cent of the paid-up capital in respect of ordinary shares of the related company is directly or indirectly owned by the first-mentioned company; or
• Not more than fifty per cent of the paid-up capital in respect of ordinary shares of the first-mentioned company and the related company is directly or indirectly owned by another company.
• Not more than twenty per cent of the paid-up capital in respect of ordinary shares of the company at the beginning of the basis period for a year of assessment is directly or indirectly owned by one or more companies incorporated outside Malaysia or by one or more individuals who are not citizens of Malaysia.

A “related company” in this context means a company which has a paid-up capital in respect of ordinary shares of more than RM2.5 million at the beginning of the basis period for a YA.