Corporate Tax

The Malaysian corporate standard income tax rate is 24%, applicable to resident or non-resident companies that earn revenue inside Malaysia. 

Malaysia has a territorial tax system whereby both resident and non-resident companies are taxed on the income generated from within Malaysia.

Resident company who fulfilled the following criteria will enjoy a special income tax rate, where their:

  • First RM 600,000 will be taxed at 17%, 
  • With the balance subject to 24% corporate income tax.

This reduced rate of 17% is only applicable to companies which fullfilled the following conditions: 

  • with paid-up capital of 2.5 million Malaysian ringgit (MYR) or less, and gross income from business of not more than MYR 50 million
  • that does not control, directly or indirectly, another company that has paid-up capital of more than MYR 2.5 million, and
  • is not controlled, directly or indirectly, by another company that has paid-up capital of more than MYR 2.5 million.

Individual Income tax

Regardless of nationality, those eligible to claim tax residency, Malaysia has a progressive individual income tax system, where tax rates rise with the rise of an individual’s income. Expatriates that did not qualify for Malaysian tax residency are taxed on the entirety of their Malaysian-sourced income, with a 30 percent flat tax.

Individuals who fail to qualify for residency are taxed at a flat rate of 30 per cent. To figure your tax rate from this table, you first need to identify your taxable income — defined as taxable income minus any tax deductions and exemptions.

Say if your taxable income is RM 51,000 for the year, your tax rate is 13 per cent, with a total income tax that you have to pay of RM1,930 (RM1,800 + RM130).

How to determine resident status

First, to determine which tax rate (progressive or flat) and what tax percentage applies to any given income, the taxpayer needs to identify if he/she qualifies as a resident for the purposes of Malaysian taxes since there are various schemes applied. 

Generally, any foreigner working for over 182 days (deemed resident) is eligible for taxation according to the regular income tax laws and rates of Malaysia, as are Malaysian citizens. All people staying over 182 days in Malaysia, regardless of their country of origin, are considered residents under Malaysian tax laws. 

Do note that there are other ways to quantify resident status. They are more complicated to compute. When it involves resident status, you should always consult a qualified tax consultant to determine your resident status.

Special tax at 15%

The special tax rate applicable to the following circumstances :

  • A qualified person (defined) who is a knowledge worker residing in Iskandar Malaysia is taxed at the rate of 15% on income from employment with a designated company engaged in a qualified activity in that specified region.
  • An approved resident individual under the Returning Expert Programme having or exercising employment with a person in Malaysia would also enjoy a tax rate of 15% for five years on income from an employment.


The company’s tax rate is determined by paid-up capital. The tax rate for individuals is subject to resident status. This area can be more complicated. As such, it is best to seek consultation from a qualified tax consultant. 

author avatar
Tan Lee Ling
Tax Consultant by training in the Big Four and trained several years with Dr Choong. Being a Chartered Accountant with a law degree. Specialised in compliance, tax planning and tax investigation in her early years. Being in tax for 12 years, to her Tax is like a tree, it is the life force for the country, tax is dynamic, continuously changing and growing. Lee Ling is the conduit in charge of not just sharing these tax changes, also to bring Dr Choong's brilliant tax planning to the tax professionals and business community.
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Related Posts

HRDCorp: Compulsary Donation what you need to know (Program Madani)

 Special 15% Donation for Program Latihan Madani (PLM) from your HRDC Levy Are you in for it? As announced by Prime Minister in Budget 2024, there will be 15% Deduction from Your Company’s HRDC Levy Collection Year 2023 for contributing to this Special Donation for PLM. However, to avoid being qualified for this one-off 15%

Selamat Hari Raya 2024 2


The Colours and Communal Bond of Hari Raya: A Personal Reflection Hari Raya Aidilfitri, the dazzling culmination of Ramadan’s month-long of Puasa and reflection, resonates with a depth of tradition and heartwarming customs. Beyond its religious reverence, this celebration is a vibrant pageant of cultural heritage and communal bonds, weaving together a tapestry enriched with shared

Reliable ESG Committee agrees: they need these

Understanding ESG Committees At its core, an ESG committee is tasked with oversight, guidance, and strategic integration of sustainability efforts across the organisation. They’re at the helm, transforming ESG concepts into actionable initiatives. The benefits? Enhanced risk management, improved regulatory compliance, and ultimately, a solid reputation bolstered by responsible corporate citizenship. However, have you wondered

Industry 4.0: Not Just a Game Changer for Manufacturing now

The dawn of Industry 4.0 has sparked revolutionary changes across manufacturing floors worldwide. But is the story of the Fourth Industrial Revolution solely written for the manufacturing sector? In this blog post, we dispel the myths and take a panoramic view of Industry 4.0’s influence beyond its traditional stronghold.

Game Changing: E-invoicing Is Really Part Of Industry 4.0

 Transparency and Accuracy — The Need of the Hour The demand for real-time data is imperative for smart manufacturing. E-invoicing pioneers this demand, automating data exchange and drastically reducing errors that erstwhile haunted manual entries. For supply chain managers and business owners, such enhancements in transparency and accuracy mean better control over financials and an improved bottom line,

Scroll to Top