Malaysia Tax Compliance Map

Email: kul4ww@evershinecpa.com
or
Contact us by WeChat or Skype in the day-work-time of Malaysia  (GMT+8)
The Engaging Manager from Headquarter
Vivian Yee, ACCA, C.A. (M)
Skype ID: vivianyeeql;Wechat ID: vivianyeeql

GLA – Malaysia Corporate Income Tax

GLA-MY-01 GLA Tax Entity

Question from client:
Is Malaysia corporate income tax a federal income tax? A state income tax? Or is there a federal and states income tax?
What if the federal income tax and the states income tax are levied separately or levied together?
What is the standard tax rate? What is the special tax rate?

Answer from Evershine RD:
Corporate income tax is only imposed at federal level.
There are no state taxes imposed at any rate.
The general Corporate Income Tax rate is 24%.
SME Companies with a paid-up share capital of RM 2.5 million and below and gross business income not exceeding RM 50 million are taxed at below reduced rates.

GLA-MY-02 Registration

Question from client:
Which government unit is responsible for the collection of Malaysia corporate income tax?
The registration of the country’s corporate income tax status, that is, the tax certificate number application procedure, paper certificate number application?
Or online account application? URL?
What is the advance certificate number for applying for this certificate number?
Do I need to use the industrial and commercial certificate electronic card to apply?

Answer from Evershine RD:
The responsible body that administers direct taxes in Malaysia is the MIRB.
Corporations must register an Income Tax file and obtain an Income Tax Reference Number via an online application.

Steps of application: –
Log in to Corporate Taxpayer Online Registration via e-Daftar at the link of http://edaftar.hasil.gov.my/
Fill up the online registration form and upload the Sijil Perakuan Pemerbadanan Syarikat and Section 14 – Superform & Particular of director/ officer (e-Daftar application will be canceled if complete documents are not received within 14 days from the date of application).

An application number will be shown after completing the online registration.
This is to check the application status online by using the application number given.
Income Tax Reference Number usually processes within 3 working days.
This registration process produces two reference numbers.
One is Corporate Income Tax number usually start with C as reference, and another is E for employer’s reference number (provided that the applicant has indicated in the online registration form that there is an employee staying employed in the corporation).
Companies are encouraged to e-file all the tax returns and forms via online instead of paper filing.

GLA-MY-03 GLA Order (OD)

Question from client:
What are the order of Malaysia corporate income tax return (information flow determines tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pay?
At the same time as the declaration and payment?

Answer from Evershine RD:
Deposit first (DF). Pay by installment first and declare later.

GLA-MY-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for Malaysia corporate income tax return (information flow determines the tax base)?
Filing cycle: monthly? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: website URL?

Answer from Evershine RD:
Tax returns are due within 7 months from the financial year-end.
Company tax returns must be filed electronically using the prescribed “Form-C”.
Companies are required to file an estimate of tax payable (ETP) for a particular year of assessment 30 days before the commencement of that year of assessment and pay monthly installments based on the ETP submitted.
Companies are required to compute the final tax liability, file the tax return, and remit the outstanding tax, if any to the MIRB, within 7 months from the end of the financial year.

GLA-MY-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for Malaysia corporate income tax payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?

Answer from Evershine RD:
Companies are required to file an estimate of tax payable (ETP) for a particular year of assessment 30 days before the commencement of that year of assessment and pay monthly installments on the 15^th day of the following month based on the ETP submitted.
Companies are required to compute the final tax liability, file the tax return, and remit the outstanding tax,
if any to the MIRB, within 7 months from the end of the financial year.
Companies have the discretion to make electronic or non-electronic payments.
Payment can be made:

1. at a MIRB Payment Counter
2. by post, using a crossed check or bank draft
3. at a bank (CIMB Bank, Public Bank, Maybank, Affin Bank, RHB Bank, Bank Rakyat, Bank Simpanan Nasional and POS Malaysia counters.
4. through internet banking and certain qualified banks, or through the government’s ByrHASIL” site and certain qualified banks
5. through a monetary transfer from overseas
6. by using credit cards, as well as debit cards issued by banking institutions through the “ByrHASIL” portal provided by the MIRB (LHDN).

SST – Malaysia SST

VAT-MY-01 VAT Tax Entity

Question from client:
Is Malaysia SST Federal SST? States SST? Or is there a federal plus States SST?
What if the Federal SST and States SST are levied separately or levied together?
What is the standard SST rate? What is the special SST rate?

Answer from Evershine RD:
Malaysia SST is only imposed at federal level.
Malaysia’s primary indirect taxes are a sales tax and a services tax, referred to jointly as the Sales and Service Tax (SST).
In Malaysia, the following rates of SST apply:
Sales tax rate: 10%
Service tax rate: 6%
Other: Sales tax rates of 5% for specified goods, and exemptions

VAT-MY-02 Registration

Question from client:
Which government unit is responsible for the levying of SST in Malaysia?
The registration of Malaysia’s SST levy status, that is, the application procedure for SST certificate number, paper certificate number application? Or online account application? URL?
What is the advance certificate number for applying for a SST certificate number?
Do I need to use an industrial and commercial certificate electronic card to apply?

Answer from Evershine RD:
The SST is administered by the Royal Malaysian Customs Department.
Persons who are required, or who opt to be registered under the Sales Tax Act and/ or Service Tax Act must register by submitting Form SST-01 electronically.
A person who manufactures taxable goods and provides taxable services must register for both.
SST registration portals: http://mysst.customs.gov.my/
SST registration threshold:

1. Sales Tax: Total sale value of all his taxable goods or expected sales value of taxable goods in that month and the 11 immediately preceding months exceeds the registration threshold RM 500,000.
2. Service Tax: Taxable services or expected sales value of taxable services in the current month and the 11 immediately preceding exceeds the registration threshold RM 500,000. However, for food and beverage services, the threshold is RM 1.5 million ringgit.
   For regulated providers of credit and charge card services, the threshold is nil, so that all persons providing these services must register.

Persons approved for registration are notified in writing and assigned a 15-digit identification number, in the format W12345678901234.

VAT-MY-03 WWT Order (OD)

Question from client:
What is the order of Malaysia’s SST declaration (information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? First declare and then pay?
At the same time as the declaration and payment?

Answer from Evershine RD:

Same period (SP): Filing of VAT return and pay the taxes due by the same time.

VAT-MY-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for Malaysia SST declaration (information flow determines the tax base)?
Filing cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist?
If electronic filing is possible: Website URL?

Answer from Evershine RD:
Every taxable person must file a return by the last day of the month following the end of the taxable period to which the return relates.
A taxable period is generally two calendar months.
The tax return should be submitted whether there is tax to be paid.
Form SST-02 can be submitted electronically or by post to the Customs Processing Centre at the below address under Section 10 of the Sales Tax Regulations and Section 14 of the Service Tax Regulations.
For imported digital services, Form DST-02 is submitted electronically.

Customs Processing Center (CPC)
Jabatan Kastam Diraja Malaysia
Kompleks Kastam WPKL
No. 22 Jalan SS 6/3 Kelana Jaya
47301 Petaling Jaya, Selangor

VAT-MY-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for Malaysia SST payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
OCT payment at the bank counter?
Or the above methods coexist?

Answer from Evershine RD:
Every taxable person must pay SST by the last day of the month following the end of the taxable period to which the return relates.
A taxable period is generally two calendar months.
Registered manufacturers and persons must pay SST, and related penalties and charges electronically, by check or bank draft, sent by post or courier to the Customs Processing Center.
Payment of service tax can be made electronically through the MySST system (FPX) with 17 banks to choose from or manually by cheque or bank draft only.
Any cash payment is not allowed.
Only full payment can be made through online. Partial payment can be made by cheque or bank draft.
For payment by cheque or bank draft, the registered person must attach the printed SST-02 return and post to CPC with the address same as above.
Cheque or bank draft must be in the name of KETUA PENGARAH KASTAM MALAYSIA.
Information such as company name, SST number, taxable period, a telephone number must be written on the back of the cheque.

Please be aware of below Warning:
The above contents are digested by Evershine R&D and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Kuala Lumpur Evershine BPO Service Limited Corp.
E-mail: kul4ww@evershinecpa.com
or
Contact us by WeChat or Skype in the day-work-time of Malaysia  (GMT+8)
The Engaging Manager from Headquarter
Vivian Yee, ACCA, C.A. (M)
Skype ID: vivianyeeql;Wechat ID: vivianyeeql

For  how to exchange data files between your Finance Accounting System and Evershine Cloud Accounting Information System,
please send an email to HQ4kul@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+Vietnam+UK will be accountable for your case.
Email address:dalechen@evershinecpa.com
LinkedIn address:Dale Chen

Additional Information

Evershine CPAs Firm Headquarters
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Tel No.: +886-2-27170515 ext. 105
Mobile: +886-939357000
Email: kerrychen@evershinecpa.com
Skype: oklahomekerry

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