This article provides a concise overview of the corporate tax regime in Malaysia for the year 2025, highlighting key rates, tax structure, and notable sector-specific rules. All data presented is based on the latest available official figures and guidance from Malaysian tax authorities.
Corporate Tax Structure in Malaysia (2025)
Malaysia operates a progressive corporate tax system. Corporate income is subject to different tax rates depending on the taxable income bracket. All figures in the following table are presented in Malaysian Ringgit (MYR):
| Taxable Income (MYR) | Rate (%) |
|---|---|
| 0 – 150,000 | 15% |
| 150,001 – 600,000 | 17% |
| Over 600,000 | 24% |
These progressive rates only apply to taxable corporate income, assessed on a corporate basis. The top standard rate for large companies is 24%. Please note, official data for overall average effective tax rates or additional surcharges (beyond what is shown below) is not published by Malaysian authorities.
Special Surtaxes for Petroleum Operations
Malaysia imposes higher sector-specific tax rates for income derived from petroleum operations:
| Activity | Rate (%) |
|---|---|
| Income from petroleum operations (standard petroleum income tax) | 38% |
| Income from petroleum operations in marginal fields | 25% |
These rates apply exclusively to qualifying income from upstream petroleum activities. For all other standard corporate income, the progressive schedule above is applicable.
Assessment Basis and Withholding
Corporate tax in Malaysia is calculated on company profits (corporate basis). The assessment approach follows generally accepted accounting practices and Malaysian tax rules, with taxable income being the key determinant for which bracket applies. Details on minimum or maximum required holding periods for tax purposes are not specified here, as no holding period data has been provided by official sources.
Currency Reference
All Malaysian tax calculations are denominated in Malaysian Ringgit (MYR). For reference, as of early 2025, the exchange rate is approximately 1 USD = 4.75 MYR (this rate is for illustration; always confirm the current rate for exact calculations). For example, the highest standard corporate tax bracket (MYR 600,001 and above at 24%) translates to roughly USD 126,316 and above at 24%.
Pro Tips for Managing Corporate Tax in Malaysia
- Plan taxable income thresholds carefully to optimize benefit from the lower progressive rates before moving into the 24% bracket.
- If your business involves petroleum operations, consult early with a tax advisor familiar with Malaysian sector-specific tax rules.
- Keep thorough and updated financial records, as tax authorities typically require annual submission of detailed company statements.
- Regularly check Malaysia’s Inland Revenue Board for updates on thresholds, compliance requirements, and official guidance.
Official Government Resource
For authoritative information and updates, see the main website of Malaysia’s Inland Revenue Board (Lembaga Hasil Dalam Negeri Malaysia).
To summarize, Malaysia’s 2025 corporate tax regime is governed by clearly defined progressive brackets, with additional higher rates for petroleum-related activities. While standard corporate tax rates are moderate by regional standards, sector-specific rates can add complexity for certain industries. Companies operating in Malaysia should monitor developments, maintain strong compliance, and seek sector-specific advice as new guidance becomes available.