Section 77 of the Income Tax Act 1967 requires every company to furnish a return of income within seven months from close of accounts. Companies incorporated in Malaysia are taxed on worldwide income while non-resident companies are taxed only on Malaysian-sourced income. Corporate tax rates are 24% for companies with paid-up capital exceeding RM2.5 million. Companies with paid-up capital of RM2.5 million or below pay 17% on first RM600,000 of chargeable income and 24% on the balance. The self-assessment system requires companies to calculate tax payable and submit returns electronically through LHDN's MyTax portal.
Filing deadlines depend on financial year-end dates. Companies with financial year ending 31 December 2024 must file Form C by 31 July 2025. Companies using e-Filing receive one-month extension, making deadline 31 August 2025. The seven-month period applies regardless of company size, industry, or profitability. Late filing triggers automatic penalties under Section 112, ranging from RM200 to RM20,000 depending on delay duration. Continuing penalties may apply for extended non-compliance.
Form C comprises the main return plus mandatory supporting schedules. The main form includes company particulars, basis period details, chargeable income computation, and tax payable calculation. Supporting schedules detail adjusted income computation, capital allowances claimed, exempt income declarations, and group relief claims. Companies must submit audited financial statements including profit and loss account, balance sheet, cash flow statement, and notes to accounts. Tax computation working papers detail adjustments from accounting profit to chargeable income. Employee-related forms include Forms E and EA showing employee remuneration, Form CP58 for payments to agents, and withholding tax certificates where applicable.
Companies adjust accounting profits to arrive at adjusted income for tax purposes. Non-deductible items added back include entertainment expenses beyond allowable 50%, penalties and fines, capital expenditure wrongly charged to profit and loss, provisions not specifically allowed, related party expenses not at arm's length, and non-business expenses. Deductible items include capital allowances on qualifying assets, approved donations up to 10% of aggregate income, unabsorbed business losses from prior years, and group relief from related loss-making companies. Section 33 of Income Tax Act 1967 requires expenses wholly and exclusively incurred in producing gross income.
Section 107C requires companies to pay estimated tax in monthly installments beginning sixth month of basis period. Companies submit Form CP204 notifying LHDN of estimated tax payable within 30 days before basis period commencement. New companies with paid-up capital of RM2.5 million or below are exempted for first two years. Companies make monthly payments via FPX, over-counter at banks, or GIRO. Revised estimates may be submitted in sixth or ninth month if actual profits differ. Penalties apply for underestimation where tax paid is less than 85% of actual tax payable. The penalty is 10% on underestimation amount.
Incorrect returns result in additional tax assessments plus penalties under Section 113. The penalty equals tax undercharged, reaching treble the amount in cases involving willful intent. Companies must maintain proper records for seven years under Section 82. Inadequate documentation results in penalties and difficulty substantiating claims. Related party transactions require contemporaneous transfer pricing documentation under Section 140A for transactions exceeding specified thresholds. Non-compliance triggers penalties from RM20,000 to RM100,000 per year of assessment. Companies should implement internal controls including detailed monthly management accounts, proper approval processes for expenses, contemporaneous documentation of related party transactions, quarterly monitoring of estimated tax versus actual profits, and clearly assigned responsibilities for tax compliance. Early engagement with tax advisors helps identify optimization opportunities, assess complex transaction treatment, and ensure compliance with evolving requirements including transfer pricing and e-invoicing mandates.
Corporate tax filing in Malaysia follows procedures under Income Tax Act 1967, requiring Form C submission with supporting schedules and financial statements. Companies with financial year ending 31 December 2024 must file by 31 July 2025, or 31 August 2025 via e-Filing. Understanding filing requirements, adjusted income computation, estimated tax obligations, and common issues enables companies to meet deadlines while avoiding penalties and audit risks.