This article is intended for private limited corporations, limited companies, foreign firms, or limited liability partnerships.
Following the incorporation of your business entity in Malaysia, the next step is registering your business profile with the Inland Revenue Board (LHDN).
Not only is it essential for an entity to furnish its yearly tax filing, but it is also mandatory for a Company to carry out the monthly tax deduction (MTD) against the pay of its employees.
Who needs to Register the Tax file?
Registration of the tax file for the business entity is the responsibility of the individual managing and operating the business (usually the board of directors or the partners).
Remark: Companies, limited liability partnerships, trust bodies and cooperative societies which are dormant and/or have not commenced business are required to register and furnish Form E with effect from Year of Assessment 2014.For further reference, please refer Filing Programme for Return Forms in the Year 2022.
How to Register Tax File?
You can register online through e-Daftar
Or you can apply in writing to the nearest branch to your correspondence address or at any IRBM branch.
Documents Required for Registration
Please submit:
Local Company - Private Limited Company or Limited Company
Notice of registration of the company under section 15 of the Companies Act 2016; OR Certificate of incorporation of the company under section17 of the Companies Act 2016 (if available)
Notification of Change In The Register Of Directors, Managers And Secretaries under section 58 of the Companies Act 2016
Foreign Company
Notice of registration of the foreign company under section 562 of the Companies Act 2016
Particulars Of Change Or Alteration Relating To Foreign Company under subsection 567(1) of the Companies Act 2016
Limited Liability Partnerships
Notice of registration of the Limited Liability Partnerships under section 11 of the Limited Liability Partnerships Act 2012
Particulars Of Change Or Alteration Relating To Limited Liability Partnerships under section 17 of the Limited Liability Partnerships Act 2012
Upon Registration
Under section 107C(1) of the Income Tax Act 1967, every company, limited liability partnership, trust body, or co-operative society shall, for each year of assessment, furnish to the Director General an estimate of its tax payable.
Hence, you are required to submit e-CP204 within 3 months from the date of commencement of the business.
The CP204 form reports the amount of tax estimated to be payable. Effective 2019, trust bodies, cooperatives, and Limited Liability Partners (LLP) will be required to submit the CP204 form via e-Filing. The form for making revisions to the CP204 is known as the CP204A form.For new companies, instalments must be paid beginning from the sixth (6) month of the basis period from the commencement of operation.
After the first financial year After that, private limited companies or limited companies and LLPs need to submit an Estimate of Tax Payable via Form CP204 for subsequent years of assessment not later than 30 days before the beginning of the basis period.
The estimated tax payable has to be paid in equal monthly instalments beginning from the second month of the basis period for a year of assessment.
Submission of Tax Return A company and Limited Liability Partnerships must also submit e-C and e-PT, respectively, within 7 months from the closing date of accounts (i.e. accounting year-end).
The forms can be downloaded from the website as follows:
Do you need a Tax Agent?
You don't have to hire a tax agent. But it's not uncommon for a new business to appoint a tax agent while getting started.
An agent can give you advice and file your taxes for you.
Who is an Approved Tax Agent?
Only qualified persons are authorised to act on behalf of other persons under the Income Tax Act.
An approved tax agent is a professional accountant or person approved by the Minister of Finance. It is up to him to persuade the Minister of Finance that he possesses adequate real-world expertise in taxation.
Getting approval involves submitting an application (which includes providing all the required details regarding professional qualifications, educational background, and professional experience) and going through an interview to determine whether or not the applicant possesses the necessary technical competence.
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