Malaysia company / corporate tax rates

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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, insurance, shipping and air transport business. A company is considered a resident in Malaysia if the control and management of its affairs are exercised in Malaysia.

Below are the current corporate tax rates provided by the The Inland Revenue Board (IRB) / Lembaga Hasil Dalam Negeri (LHDN) Malaysia.

 

1. Tax rates of resident company for Assessment Year 2009 onwards

Company paid-up capital

Tax Rate

Company with paid up capital not more than RM2.5 million

-On first RM500,000

-Subsequent balance

 

20%

25%

Company with paid up capital more than RM2.5 million

25%

 

2. Tax rates of non-resident company (effective from 01/01/2007)

A non-resident company is liable to Malaysian tax when it carries on a business through a permanent establishment in Malaysia.

Below are the rates:

Types of income

Tax Rate

Business
Rental

25%

Dividend (Franked)
Dividend (Single tier)*

25%
0%

Entertainer’s professional income 

15%

Interest

15%

Royalty

10%

Special classes of income:  
-Rental of movable property

10%

-Fees for technical or management services performed in Malaysia

10%

-Payment for services rendered in Malaysia in connection with use of property or installation or operation of any plant, machinery or other apparatus purchased from a non-resident person

10%

Real Estate Investment Trust (REIT)  
-Other than a resident company

10%

-Non-resident company

25%

-Foreign investment institution

10%

*With the introduction of the single tier dividend system effective 1.1.2008, all dividends are tax free in the hands of the shareholders.However companies with section 108 credit under the old imputation system are given a transitional period until 31.12.2013 to frank normal dividends so as to enable them to exhaust their section 108 credit .


If you are looking for individual income tax rate, refer to Malaysia Personal income tax rates 2011.

 

Source: Inland Revenue Board (IRB) / Lembaga Hasil Dalam Negeri (LHDN) Malaysia.

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