Engaging corporate tax services from qualified tax professionals is essential to ensure compliance with corporate tax laws in Malaysia, especially with the evolving tax requirements and regulations. Corporate tax returns must be filed on time and this means companies will have to prepare them beforehand to avoid penalties from the Inland Revenue Board (IRB). Failure to comply with these tax requirements normally puts companies in jeopardy and might be classified as a civil offence even when the intentions were not to defraud the IRB or the government. Our experienced tax professionals can help you prepare and file your tax returns on time thus avoiding any risk of penalties for non-compliance. This can go a long way to help you go about your business with a peace of mind.
Malaysian resident companies are liable to file corporate tax returns. These taxes are normally accrued based on the total income earned by companies within Malaysia. Companies operating outside Malaysia and remitting their income back into Malaysia are exempted from taxation unless they are involved in certain undertakings including air and sea transport, insurance and banking businesses. The following is the corporate tax rate in Malaysia: –
- Income tax rate for companies with paid-up capital above RM2.5 million: 25%
- Income tax rate for Small & Medium Entities (SMEs) with paid-up capital of RM2.5 million and below:
- For the first 500,000 – 20% (to be reduced to 19% in 2016)
- Above 500,000 – 25% (to be reduced to 24% in 2016).
Besides that, Malaysian resident companies are also liable to collect withholding taxes from non-Malaysian resident companies and to remit the withholding taxes to IRB. Malaysian resident companies has to charge withholding taxes on amounts paid to non-Malaysian resident companies based on the prescribed rate in following list: –
- Business Income – 25%
- Rental of moveable property – 10%
- Royalties – 10%
- Interest – 15%
- Management or technical service fees – 10%
- Other income – 10%
Dividends are exempted from taxation if credited, paid or distributed from 1st of January 2014 and onwards. Additionally, all the management/technical service fees are only taxed for services rendered inside Malaysia. Any interest payable to a non-resident by a finance company or bank in Malaysia or paid for approved loans is not taxable and business income taxation rates may be reduced in cases where the beneficiary resides in a country that has a dual-taxation agreement with Malaysia.
Compliance with corporate taxation regulations require a keen eye and failure to file accurate returns could result in huge fines or penalties imposed by the IRB. With this in mind, our team of responsible professionals can help you understand and interpret the taxation rules and any changes to ensure compliance. In addition, we can assist you identify any available tax incentives that your company can benefit from. We provide the following services: –
- Tax filing: – Timely filling of your company’s tax returns within the stipulated period to avoid unnecessary tax penalties and legal matters.
- Tax planning: – Advisory services in planning and managing your business activities to maximize tax efficiency and to reduce unnecessary tax burden.
- Tax advisory: – Advisory and consultancy services on taxation laws and any latest changes arising from Malaysian budget to guide your company for effective compliance.
- Tax computation: – Calculation and submission of monthly, quarterly, and annual taxes based on your company’s documentation and accounts.
- Tax compliance: – To ensure your company fully complies with the taxation acts and that everything is done in a timely manner.