Asia-Pacific · Tax guide
Malaysia
Malaysia taxes companies at 24%, with lower rates for SMEs, charges sales and service tax (SST) rather than VAT, has phased in e-invoicing through MyInvois, and applies the global minimum tax. Income tax is administered by the Inland Revenue Board (LHDN) and SST by the Royal Malaysian Customs Department.
At a glance
- Corporate income tax
- 24%
- Service tax
- 8%
- SST registration
- RM500,000
- E-invoicing exemption
- RM3,000,000
- Withholding on royalties
- 10%
- Global minimum tax
- 15%
Lower rates for qualifying SMEs
Sales tax 5% or 10%
Annual taxable turnover
Turnover below which it does not apply
Interest 15%
Large multinational groups
Corporate income tax
Companies pay 24%. Qualifying SMEs — with gross income up to RM50,000,000 and limited paid-up capital — pay 15% on the first RM150,000 and 17% on the next RM450,000. Companies submit a tax estimate (CP204) and pay monthly instalments, and file Form C within seven months of the year-end. Sole proprietors pay personal tax at rates up to 30%.
Sales and service tax (SST)
Malaysia has no VAT. Manufacturers charge sales tax of 5% or 10% on taxable goods, and providers of taxable services charge service tax of 8% (lower for some services). Registration is required once taxable turnover exceeds RM500,000 over twelve months; some services added in 2025 have higher thresholds. Returns are filed every two months.
E-invoicing (MyInvois)
Businesses issue e-invoices through LHDN's MyInvois system, which validates each one before it reaches the buyer. The requirement was phased in by turnover since 2024; businesses with annual turnover below RM3,000,000 are exempt.
Withholding tax on payments abroad
- Royalties: 10%.
- Interest: 15%.
- Technical and service fees: 10%.
- Dividends carry no withholding under the single-tier system.
Transfer pricing and the global minimum tax
Related-party transactions must be at arm's length, with full or minimum documentation depending on size. Large multinational groups pay Malaysia's domestic top-up tax and the income inclusion rule at 15%.
Key dates
- Monthly, by the 15thCorporate tax instalments and monthly tax deductions (PCB)
- Every two monthsSST return
- Within seven months of the year-endCorporate tax return (Form C)
Figures and sources
12 figures- Corporate income tax rate24%Checked against the official source
- Service tax rate (6% for food and beverage, telecommunications, parking and logistics)8%Checked against the official source
- Sales tax on taxable goods5% or 10%Checked against the official source
- Annual taxable turnover above which SST registration is required (most services and manufacturers)RM500,000Checked against the official source
- Annual turnover below which businesses are exempt from e-invoicingRM3,000,000Checked against the official source
- Withholding on royalties paid to non-residents10%Checked against the official source
- Withholding on interest paid to non-residents15%Checked against the official source
- Global minimum tax rate15%Checked against the official source
- Gross business income limit for the SME ratesRM50,000,000Checked against the official source
- Reduced rates for SMEs (paid-up capital up to RM2.5 million, gross income up to RM50 million)15% on the first RM150,000 and 17% on the next RM450,000Checked against the official source
- Top personal income tax rate30%Checked against the official source
- Withholding on technical and service fees paid to non-residents10%Checked against the official source
Indicative only. This assessment is a high-level overview of tax obligations in Malaysia based on the information you provided and rules in force for 2026. It is not tax or legal advice. Consult a qualified tax adviser in Malaysia (a licensed Malaysian tax agent) before making compliance decisions.