Malaysia Tax Overview

Malaysian tax system at a glance

• Tax administration system — Malaysia operates a self-assessment system administered by the Inland Revenue Board (LHDN / IRBM). Income tax is governed by the Income Tax Act 1967 and is broadly territorial in basis. (Income Tax Act 1967)
• Direct tax authority — Lembaga Hasil Dalam Negeri Malaysia (LHDN) / Inland Revenue Board of Malaysia (IRBM) (Income Tax Act 1967)
• Indirect tax authority — Royal Malaysian Customs Department (RMCD) (Sales Tax Act 2018 / Service Tax Act 2018)
• Currency — Malaysian Ringgit (MYR / RM) (Income Tax Act 1967)
• Tax year (Year of Assessment) for individuals — Calendar year, 1 January to 31 December (Income Tax Act 1967)
• Basis of taxation — Territorial — income accruing in or derived from Malaysia is taxable; foreign-source income remitted to Malaysia is generally exempt for individuals (with exemptions extended), subject to conditions ((approx — confirm scope of foreign-source income exemption)) (Income Tax Act 1967)
• Individual tax residence test — Present in Malaysia for at least 182 days in a calendar year (plus alternative linking/90-day tests) days (Income Tax Act 1967, Section 7)
• Top marginal personal income tax rate (resident) — 30% % (Income Tax Act 1967, Schedule 1)
• Standard corporate income tax rate — 24% % (Income Tax Act 1967, Schedule 1)
• Consumption tax system — Sales and Service Tax (SST) — Malaysia has no VAT/GST (GST was abolished in 2018) (Sales Tax Act 2018 / Service Tax Act 2018)
• Individual return deadline (employment income, Form BE) — 30 April following the year of assessment (e-Filing typically extended to 15 May) (Income Tax Act 1967)
• Company return deadline (Form C) — Within 7 months after the company's financial year-end (Income Tax Act 1967)