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Paying Taxes in

Malaysia

Below is a detailed summary of the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as administrative burden in paying taxes and complying with postfiling procedures.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 190 economies. The most recent round of data collection was completed on June 1, 2016 covering for the Paying Taxes indicator calendar year 2015 (January 1, 2015 – December 31, 2015).

Compare Malaysia to 189 other economies.

Tax or mandatory contribution Payments (number) Notes on Payments Time (hours) Statutory tax rate Tax base Total tax rate (% of profit) Notes on TTR
Corporate income tax 1 online 26 25% taxable profit 21.17
Employer paid - Provident fund contributions 1 online variable gross salaries 14.56
Employer paid - Social security contributions 1 online 50 variable gross salaries 1.81
Real estate capital gains 1 5% - 30% capital gain 1.52
Property tax 1 10% annual property value 0.49
Vehicle tax 1 RM 8,545 fixed fee 0.47
Stamp duty 1 depending of the value of transaction transaction value 0.00
GST 2 online 88 6% value added 0.00
Employee-paid - Social security contributions 0 jointly variable gross salaries 0.00 withheld
Totals: 9.0 164.0 40.00
  • Taxes by type Answer
    Profit tax (% of profit) 22.7
    Labor tax and contributions (% of profit) 16.4
    Other taxes (% of profit) 0.9
    Answer Score
    Postfiling index (0-100) 64.3
    VAT refunds
    Does VAT/GST exist? Yes
    Frequency of VAT/GST refund submission N/A
    Does a VAT/GST refund process exist per the case study? No
    Restrictions on VAT refund process New VAT/GST system established in 2015
    Likelihood of VAT audit N/A
    Time to comply with VAT refund (hours) N/A No VAT
    Time to obtain a VAT refund (weeks) N/A No VAT
    Corporate income tax audits
    Does corporate income tax exist? Yes
    Likelihood of corporate income tax audit Likely
    Time to comply with a corporate income tax audit (hours) 5.3 93.1
    Time to complete a corporate income tax audit (weeks) 20.6 35.5
    Administrative appeal process
    First level administrative appeal authority Director General of Inland Revenue (DGIR)
    Is the appeal authority independent? Different auditor
    Are appeal guidelines accessible to the public? Yes
    Source of appeal guidelines online
    Is there a legal time limit for the appeal authority to issue a decision on the tax appeal? Yes
    Legal time limit 12 months

Notes:

Name of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table.

The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit.

N/A = Not applicable.