The most underestimated part of running a Malaysian company as a foreign owner is tax compliance — it is never just "pay tax when profitable". SST, employer contributions and annual filings form a whole compliance stack. This one-page guide covers the key 2026 items, all verified against current official standards.
Corporate income tax: the tiered rates
Malaysia's standard corporate tax rate is 24%, but qualifying resident SMEs enjoy preferential tiers:
| Chargeable income band | Rate |
|---|---|
| First RM150,000 | 15% |
| RM150,001 – RM600,000 | 17% |
| Above RM600,000 | 24% |
SST: the 2026 rules
Malaysia levies SST (sales tax + service tax), not GST:
- Service tax — most taxable services at 8%; F&B, telecommunications, parking and logistics remain at 6%;
- Key update — service tax on rental/leasing dropped from 8% to 6% on 1 January 2026, and the MSME exemption threshold for rental/leasing rose from RM1 million to RM1.5 million;
- Sales tax — 5% or 10% on taxable goods by category.
Registration threshold: most taxable services trigger registration once taxable value exceeds RM500,000 over the past 12 months (higher thresholds apply to rental/leasing and financial services). Full enforcement began 1 January 2026 — the grace period for new registrants ended 31 December 2025, and late or missed filings now attract penalties. For the full expansion analysis see our SST expansion guide for foreign companies.
Employer obligations: the three you must not miss
Hire local staff and your company is an employer, obliged to contribute to EPF (provident fund), SOCSO (social security) and EIS (employment insurance). These are statutory, monthly, and — together with work-pass management for expatriates — the foundation of compliant employment.
Every year, without fail
- Annual Return — filed with SSM by your licensed company secretary;
- Statutory audit — most Sdn Bhds must audit annually, apart from qualifying dormant/micro exemptions;
- Corporate tax return (Form C) — filed per financial year.
The one-page compliance checklist
| Item | Obligation | Who handles it |
|---|---|---|
| Corporate income tax | Tiered 15%/17%/24%, annual Form C | Accountant / tax agent |
| SST | Register at threshold, periodic filing (8%/6%/5%/10%) | Accountant / tax agent |
| EPF/SOCSO/EIS | Monthly employee contributions | Payroll |
| Annual Return | Once a year | Company secretary |
| Statutory audit | Annual (unless exempt) | Auditor |
Handing this stack to one team avoids the classic failure mode: penalties for rules you didn't know existed. ONEKEY BIZ bundles company secretary, accounting, tax and audit — transparent fees, Mandarin & English support. Get a free tax-compliance assessment or view the corporate tax filing service.
Frequently asked questions
What is the SME corporate tax rate in Malaysia for 2026?
Qualifying resident SMEs pay 15% on the first RM150,000 of chargeable income, 17% on RM150,001–600,000 and 24% above that. Eligibility requires paid-up capital ≤ RM2.5 million and gross business income ≤ RM50 million — both conditions.
What is Malaysia's service tax rate now?
Most taxable services are at 8%; F&B, telecommunications, parking and logistics remain at 6%; rental/leasing dropped from 8% to 6% on 1 January 2026. Registration is generally triggered at RM500,000 of taxable value over 12 months.
Sources & references
This article is general information only, not legal, tax or immigration advice. Policies, thresholds and official fees are set by the relevant Malaysian authorities and may change. Talk to our consultants about your specific situation.