Sdn Bhd Tax Malaysia 2026: Corporate Tax Guide
A Sdn Bhd is a separate legal and tax entity from its owners. This guide explains the main corporate income-tax concepts Malaysian SME owners should understand.
Eligible smaller companies have historically qualified for tiered SME corporate tax rates, while other companies are generally taxed at 24%. For the latest published YA 2023–2025 framework, eligible companies with paid-up capital up to RM2.5 million and gross business income up to RM50 million are taxed at 15% on the first RM150,000 of chargeable income, 17% from RM150,001 to RM600,000 and 24% above RM600,000. Confirm the rate applicable to your company's assessment year before filing.
How Sdn Bhd tax works
The company pays tax on its own chargeable income. Accounting profit is not automatically the same as taxable profit: tax computations adjust for deductible and non-deductible expenses, capital allowances and other tax rules.
Corporate tax rates
| Chargeable income | Latest published SME framework |
|---|---|
| First RM150,000 | 15% |
| RM150,001–RM600,000 | 17% |
| Above RM600,000 | 24% |
The preferential bands are subject to eligibility conditions. Companies outside the qualifying category are generally taxed at 24%.
CP204: estimate your tax
HASiL states that a newly operating company generally submits e-CP204 within three months from commencement of business. For new companies, instalments begin from the sixth month of the basis period from commencement of operations.
Form C and filing deadline
A company submits its income tax return through Form C/e-C. HASiL states that the company return and balance of tax payable are due within seven months after the close of the accounting period.
Common deductible business expenses
Expenses incurred wholly and exclusively in producing business income may generally be deductible, subject to the Income Tax Act and specific restrictions. Typical areas include staff costs, rent, professional fees, software and business operating expenses. Capital purchases may instead qualify for capital allowances rather than an immediate deduction.
Keep proper records
Maintain invoices, receipts, bank records, payroll documents, contracts and tax computations. Good bookkeeping reduces year-end clean-up and helps support deductions if HASiL asks for evidence.
Do not choose between sole proprietorship and Sdn Bhd based only on headline tax rates. Administration costs, liability, retained profits, remuneration, growth plans and compliance all matter.
Simple tax checklist
- Keep monthly bookkeeping current.
- Confirm your financial year end.
- Review CP204 and instalments with your tax agent.
- Prepare annual accounts and tax computation.
- File Form C/e-C within the applicable deadline.
- Keep supporting records.
Use the free Business Setup Finder
Answer eight questions for a practical starting point.
Important
This guide is general educational information, not tax advice. Tax rates and eligibility rules can change. Confirm current requirements with HASiL and a qualified tax professional.
Last reviewed: August 2026.