Form C Corporate Tax Filing in Malaysia: A 2025 Guide to Deadlines, Rates, and Compliance

Navigating Corporate Tax in Malaysia for the 2025 Year of Assessment

In 2025, corporate tax compliance in Malaysia has evolved into a multifaceted discipline, extending far beyond the annual submission of Form C. The landscape is now shaped by a mature self-assessment system, mandatory digital filing, and the introduction of new, internationally-aligned tax regimes. For businesses, a proactive and well-informed approach is essential for ensuring accurate and timely compliance.

Form C Filing in 2025: The Essentials

The foundation of corporate tax compliance is the annual submission of the corporate income tax return, known as Form C. Key requirements for 2025 include:

• Mandatory E-Filing: The submission of Form C via the LHDN's e-Filing system is mandatory for all companies.
• Filing Deadline: The statutory deadline for filing Form C is seven months from the end of the company's financial year. However, a one-month extension is automatically granted for submissions made via e-filing, making the effective deadline eight months from the financial year-end. For a company with a December 31 year-end, the e-filing deadline is August 31 of the following year.
• Corporate Tax Rates for 2025:
  • The standard corporate income tax rate remains at 24%.
  • Qualifying Small and Medium Enterprises (SMEs)* enjoy a preferential two-tier rate: 15% on the first RM150,000 of chargeable income, and 17% on chargeable income from RM150,001 to RM600,000. Chargeable income above RM600,000 is taxed at the standard 24% rate.

  *An SME is defined as a company with a paid-up capital of RM2.5 million or less, and gross business income not exceeding RM50 million.

The Broader Tax Landscape: New Considerations for 2025

Beyond the standard corporate income tax, businesses must now consider the impact of new tax regimes:

• Global Minimum Tax (GMT): Effective from January 1, 2025, multinational enterprises (MNEs) with a consolidated annual revenue of at least €750 million will be subject to a 15% minimum tax in each jurisdiction they operate. This will have a significant impact on the tax computations of in-scope MNEs.
• Capital Gains Tax (CGT): The introduction of CGT on the disposal of unlisted shares in 2024 adds another layer to a company's overall tax position and must be considered alongside corporate income tax.

The Critical Role of MFRS 112 in Tax Computation

The tax computation for Form C begins with the profit before tax as reported in the audited financial statements. Therefore, the accounting treatment of income and expenses under the Malaysian Financial Reporting Standards (MFRS) is the starting point for determining the tax liability. MFRS 112 'Income Taxes' is particularly crucial:

• Current and Deferred Tax: MFRS 112 requires companies to account for both the current tax liability for the year and any deferred tax. Deferred tax arises from temporary differences between the carrying amount of assets and liabilities in the financial statements and their tax base.
• Common Temporary Differences: These often arise from differences in the depreciation of assets for accounting purposes versus the capital allowances claimed for tax purposes, or from provisions made in the accounts that are only tax-deductible when paid.
• Recent Amendments: Recent amendments to MFRS 112 have clarified the accounting for deferred tax on transactions such as leases and decommissioning obligations, and have provided temporary relief from recognizing deferred taxes related to the new Pillar Two model rules.

A Practical Guide to Form C Compliance

1. Prepare Accurate Financial Statements: The starting point for the tax computation is a set of accurate, audited financial statements that comply with the relevant MFRS or MPERS standards.
2. Compute Chargeable Income: Adjust the accounting profit for non-deductible expenses (e.g., certain entertainment expenses, fines), non-taxable income, and specific tax incentives or allowances (e.g., capital allowances).
3. Calculate Tax and Account for Credits: Apply the correct tax rates to the chargeable income and deduct any tax installments paid during the year (via the CP204 scheme) and any other applicable tax credits.
4. Maintain Robust Documentation: Under the self-assessment system, the burden of proof lies with the taxpayer. It is a legal requirement to maintain all supporting documentation, including financial records, tax computations, and supporting schedules, for a period of seven years.

Conclusion

Corporate tax compliance in Malaysia in 2025 is a complex and demanding task. The interplay between accounting standards and tax law, combined with the introduction of new tax regimes, requires a high level of expertise and diligence. A proactive, well-documented, and technology-enabled approach is essential for ensuring accurate and timely compliance and for navigating the complexities of Malaysia's modern tax landscape.