Asked about Malaysia income tax for self-employed individuals or sole proprietors.
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Form BE filing deadline (paper)
30 AprilITA 1967, Sections 77-107
Form BE filing deadline (e-Filing)
15 MayITA 1967, Sections 77-107
Form B filing deadline (paper)
30 JuneITA 1967, Sections 77-107
Form B filing deadline (e-Filing)
15 JulyITA 1967, Sections 77-107
Tax rate on chargeable income: RM 0 – 5,000
0%ITA 1967, Schedule 1
Tax rate on chargeable income: RM 5,001 – 20,000
1%ITA 1967, Schedule 1
Tax rate on chargeable income: RM 20,001 – 35,000
3%ITA 1967, Schedule 1
Tax rate on chargeable income: RM 35,001 – 50,000
6%ITA 1967, Schedule 1
Tax rate on chargeable income: RM 50,001 – 70,000
11%ITA 1967, Schedule 1
Tax rate on chargeable income: RM 70,001 – 100,000
19%ITA 1967, Schedule 1
Tax rate on chargeable income: RM 100,001 – 400,000
25%ITA 1967, Schedule 1
Tax rate on chargeable income: RM 400,001 – 600,000
26%ITA 1967, Schedule 1
Tax rate on chargeable income: RM 600,001 – 2,000,000
28%ITA 1967, Schedule 1
Tax rate on chargeable income: Above RM 2,000,000
30%ITA 1967, Schedule 1
Non-resident flat tax rate
30% flat on all Malaysian-sourced incomeITA 1967, Schedule 1
Minimum days present in Malaysia for resident status
≥182 days in a calendar yearITA 1967, Section 7
Heavy machinery / general plant — Initial Allowance
20%ITA 1967, Schedule 3
Heavy machinery / general plant — Annual Allowance
14%ITA 1967, Schedule 3
Office equipment, furniture — Initial Allowance
20%ITA 1967, Schedule 3
Office equipment, furniture — Annual Allowance
10%ITA 1967, Schedule 3
Motor vehicles — Initial Allowance
20%ITA 1967, Schedule 3
Motor vehicles — Annual Allowance
20%ITA 1967, Schedule 3
Motor vehicles — Maximum qualifying cost (standard)
RM 100,000ITA 1967, Schedule 3
Motor vehicles — Maximum qualifying cost (on-the-road price ≤RM150,000)
RM 200,000ITA 1967, Schedule 3
Motor vehicles — On-the-road price threshold for higher qualifying cost
≤ RM 150,000ITA 1967, Schedule 3
Computer, IT equipment — Initial Allowance
20%ITA 1967, Schedule 3
Computer, IT equipment — Annual Allowance
40%ITA 1967, Schedule 3
Small value assets — per-asset cost threshold
≤ RM 2,000 eachITA 1967, Schedule 3
Small value assets — total annual cap per YA
≤ RM 20,000 per YAITA 1967, Schedule 3
Small value assets — Allowance rate
100%ITA 1967, Schedule 3
Maximum carry-forward period for unabsorbed business losses
10 consecutive YA (from YA 2019)ITA 1967
Entertainment expenses — disallowed portion
50% disallowed (unless for qualifying promotional purposes)ITA 1967, Section 33
Individual and dependent relatives relief
RM 9,000ITA 1967, Sections 45A-49
Disabled individual (additional) relief
RM 7,000ITA 1967, Sections 45A-49
Spouse relief (no income or joint assessment)
RM 4,000ITA 1967, Sections 45A-49
Disabled spouse (additional) relief
RM 6,000ITA 1967, Sections 45A-49
Child relief — unmarried, under 18
RM 2,000 per childITA 1967, Sections 45A-49
Child relief — 18+, full-time education in Malaysia
RM 2,000 per childITA 1967, Sections 45A-49
Child relief — 18+, full-time education overseas (degree level)
RM 8,000 per childITA 1967, Sections 45A-49
Disabled child (additional) relief
RM 8,000 per childITA 1967, Sections 45A-49
Medical expenses (self, spouse, child — serious illness) — maximum
RM 10,000ITA 1967, Sections 45A-49
Medical expenses (parents) — maximum
RM 8,000ITA 1967, Sections 45A-49
Life insurance + EPF — maximum
RM 7,000ITA 1967, Sections 45A-49
Education and medical insurance — maximum
RM 4,000ITA 1967, Sections 45A-49
Lifestyle (books, internet, computer, sports, courses) — maximum
RM 2,500ITA 1967, Sections 45A-49
EV charging facilities — maximum
RM 2,500ITA 1967, Sections 45A-49
Private Retirement Scheme (PRS) — maximum
RM 3,000ITA 1967, Sections 45A-49
SOCSO/EIS contributions — maximum
RM 350ITA 1967, Sections 45A-49
SSPN (National Education Savings Scheme) — maximum
RM 8,000ITA 1967, Sections 45A-49
Education fees (self — Masters/doctorate, approved courses) — maximum
RM 7,000ITA 1967, Sections 45A-49
Breastfeeding equipment relief — maximum (once per 2 YA)
RM 1,000ITA 1967, Sections 45A-49
Child care / kindergarten (child ≤6 years) — maximum
RM 3,000ITA 1967, Sections 45A-49
Form P (Partnership declaration) filing deadline
30 JuneITA 1967, Sections 77-107
Form M (Non-resident individuals) filing deadline
30 JuneITA 1967, Sections 77-107
Late filing surcharge — range
RM 200 – RM 20,000 or imprisonment ≤6 monthsITA 1967, Section 112(3)
Late payment penalty — initial surcharge
10% increase on tax unpaid after due dateITA 1967, Section 103(3)
Late payment penalty — additional surcharge after 60 days
Further 5% on amount still unpaid 60 days after due dateITA 1967, Section 103(3)
Incorrect return penalty
Equal to the amount of tax underchargedITA 1967, Section 113
Wilful evasion — fine range
RM 1,000 – RM 20,000 or imprisonment ≤3 years, plus 300% penaltyITA 1967, Section 114
Quick Reference
Quick Reference table
| Field | Value |
|---|---|
| Country | Malaysia |
| Tax | Income Tax (Cukai Pendapatan) |
| Currency | MYR (Malaysian Ringgit / RM) only |
| Year of Assessment (YA) | Calendar year (1 January -- 31 December); YA 2025 = income earned in 2025 |
| Primary legislation | Income Tax Act 1967 (ITA 1967) |
| Tax authority | Lembaga Hasil Dalam Negeri Malaysia (LHDN) / Inland Revenue Board |
| Filing portal | MyTax e-Filing (https://mytax.hasil.gov.my) |
| Filing deadline -- employees | Form BE: 30 April (e-Filing: 15 May) |
| Filing deadline -- self-employed | Form B: 30 June (e-Filing: 15 July) |
| Validated by | Pending -- requires sign-off by a Malaysian tax agent |
| Validation date | Pending |
| Skill version | 1.0 |
Progressive Tax Rates -- Resident Individuals (YA 2025)
| Chargeable Income (RM) | Rate | Tax on Band | Cumulative Tax |
|---|---|---|---|
| 0 -- 5,000 | 0% | RM 0 | RM 0 |
| 5,001 -- 20,000 | 1% | RM 150 | RM 150 |
| 20,001 -- 35,000 | 3% | RM 450 | RM 600 |
| 35,001 -- 50,000 | 6% | RM 900 | RM 1,500 |
| 50,001 -- 70,000 | 11% | RM 2,200 | RM 3,700 |
| 70,001 -- 100,000 | 19% | RM 5,700 | RM 9,400 |
| 100,001 -- 400,000 | 25% | RM 75,000 | RM 84,400 |
| 400,001 -- 600,000 | 26% | RM 52,000 | RM 136,400 |
| 600,001 -- 2,000,000 | 28% | RM 392,000 | RM 528,400 |
| Above 2,000,000 | 30% | -- | -- |
Conservative Defaults
| Ambiguity | Default |
|---|---|
| Unknown residency status | Non-resident (30% flat) until confirmed |
| Unknown business-use % | 0% deduction |
| Unknown expense category | Not deductible |
| Unknown relief eligibility | Do not claim |
Computation of Adjusted Income
| Step | Description |
|---|---|
| Gross business income | Total revenue from business activities |
| Less: Allowable expenses (Section 33) | Expenses wholly and exclusively incurred in the production of income |
| = Adjusted income | Business profit before capital allowances |
| Less: Capital allowances (Schedule 3) | Depreciation per tax rules |
| Less: Unabsorbed losses brought forward | Prior year business losses (max 10 consecutive YA carry-forward from YA 2019) |
| = Statutory income from business |
Allowable Deductions (Section 33)
| Category | Treatment |
|---|---|
| Cost of goods sold | Fully deductible |
| Staff salaries and EPF contributions | Fully deductible |
| Office rent (business premises) | Fully deductible |
| Utilities (business premises) | Fully deductible |
| Professional fees (accounting, legal) | Fully deductible |
| Marketing, advertising | Fully deductible |
| Travel (business purpose) | Fully deductible |
| Insurance (business-related) | Fully deductible |
| Bad debts (specific provision, written off) | Deductible |
| Repairs and maintenance | Deductible (revenue nature only) |
| Double deduction | Promotion of exports, approved training, disabled employee costs, R&D |
Capital Allowances (Schedule 3)
| Asset Category | Initial Allowance | Annual Allowance |
|---|---|---|
| Heavy machinery / general plant | 20% | 14% |
| Office equipment, furniture | 20% | 10% |
| Motor vehicles (max RM100,000 cost; RM200,000 if on-the-road price ≤RM150,000) | 20% | 20% |
| Computer, IT equipment | 20% | 40% |
| Small value assets (each ≤RM2,000, total ≤RM20,000/YA) | 100% | -- |
Non-Deductible Expenses
| Expense | Reason |
|---|---|
| Private/domestic expenses | Not business-related |
| Income tax itself | Tax on income |
| Entertainment (50% restriction applies to most) | 50% disallowed unless for promotional purposes |
| Capital expenditure (non-qualifying) | Must go through capital allowance |
| Fines and penalties | Public policy |
| Donations (unless to approved institutions) | Not deductible under Section 33; separate relief may apply |
Personal Reliefs (YA 2025)
| Relief | Amount (RM) |
|---|---|
| Individual and dependent relatives | 9,000 |
| Disabled individual (additional) | 7,000 |
| Spouse (no income or electing joint assessment) | 4,000 |
| Disabled spouse (additional) | 6,000 |
| Child (unmarried, under 18) | 2,000 per child |
| Child (18+, full-time education in Malaysia) | 2,000 per child |
| Child (18+, full-time education overseas at degree level) | 8,000 per child |
| Disabled child (additional) | 8,000 per child |
| Medical expenses (self, spouse, child -- serious illness) | max 10,000 |
| Medical expenses (parents) | max 8,000 |
| Life insurance + EPF | max 7,000 |
| Education and medical insurance | max 4,000 |
| Lifestyle (books, internet, computer, sports, courses) | max 2,500 |
| EV charging facilities | max 2,500 |
| Private Retirement Scheme (PRS) | max 3,000 |
| SOCSO/EIS contributions | max 350 |
| SSPN (National Education Savings Scheme) | max 8,000 |
| Education fees (self -- Masters/doctorate, approved courses) | max 7,000 |
| Breastfeeding equipment (once per 2 YA) | max 1,000 |
| Child care / kindergarten (child ≤6 years) | max 3,000 |
Forms
| Form | Who Files | Deadline |
|---|---|---|
| Form BE | Individuals with employment income only | 30 April (e-Filing: 15 May) |
| Form B | Individuals with business income (sole proprietors, partnerships, freelancers) | 30 June (e-Filing: 15 July) |
| Form P | Partnership declaration (filed by precedent partner) | 30 June |
| Form M | Non-resident individuals | 30 June |
Penalties
| Offence | Penalty |
|---|---|
| Late filing | Surcharge under Section 112(3): RM200 -- RM20,000 or imprisonment ≤6 months |
| Late payment | 10% increase on tax unpaid after due date (Section 103(3)) |
| Additional penalty | Further 5% on amount still unpaid 60 days after due date |
| Incorrect return | Penalty equal to the amount of tax undercharged (Section 113) |
| Wilful evasion | Fine RM1,000 -- RM20,000 or imprisonment ≤3 years, plus 300% penalty (Section 114) |
Input: Gross business revenue RM150,000, allowable expenses RM45,000, capital allowances RM5,000. Single, no dependants. EPF voluntary RM7,000. Lifestyle relief RM2,500.
Computation:
Tax:
Input: Malaysian-sourced consulting income RM200,000.
Tax: RM200,000 × 30% = RM60,000. No reliefs available.
Interaction with Other Systems
| System | Interaction |
|---|---|
| CP500 (prepayment instalments) | See my-pcb skill for self-employed instalment payments |
| EPF/SOCSO/EIS | See my-epf-socso skill for contribution rates and obligations |
| SST (Sales and Services Tax) | Separate regime; not covered by this skill |
Key Legislation
| Topic | Reference |
|---|---|
| Income tax rates | ITA 1967, Schedule 1 |
| Business income | ITA 1967, Section 4(a) |
| Allowable deductions | ITA 1967, Section 33 |
| Capital allowances | ITA 1967, Schedule 3 |
| Personal reliefs | ITA 1967, Sections 45A-49 |
| Filing and payment | ITA 1967, Sections 77-107 |
| Penalties | ITA 1967, Sections 112-114 |
Key LHDN Resources
| Resource | URL |
|---|---|
| MyTax e-Filing | https://mytax.hasil.gov.my |
| Tax rates | https://www.hasil.gov.my/en/individual/individual-life-cycle/income-declaration/tax-rate/ |
| Tax reliefs | https://www.hasil.gov.my/en/individual/individual-life-cycle/income-declaration/tax-reliefs/ |
| Contact centre | 03-8911 1000 / HASiL Care Line |
This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.
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Other Malaysia computations in the OpenAccountants Tax Library.
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