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Malaysia Corporate Income Tax Rate

Malaysia adopts a territorial system of income taxation. A company, 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.

 

YA 2020

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

On first 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%

 

YA 2019

  • Resident company with paid up capital of RM2.5 million and below at the beginning of the basis period (SME) (Note 1)

On first RM500,000 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.

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.