Taxes
Malaysia — Tax: Corporate Tax
Malaysia's standard corporate tax rate for large corporations (non-SMEs) is a flat 24% for the 2026 assessment year, unchanged from prior years. SMEs — defined as companies with paid-up ordinary share capital of RM2.5 million or less AND gross business income of RM50 million or less — receive preferential tiered rates: 15% on the first RM150,000, 17% on RM150,001-600,000, and 24% above RM600,000 of chargeable income. Petroleum income tax is a separate, higher rate at 38% on income from petroleum operations in Malaysia.
VerifiedGovernment / official sourceLembaga Hasil Dalam Negeri Malaysia (LHDN)Last reviewed: 2026-07-19
Key facts
- Standard corporate tax rate (non-SME): flat 24%, unchanged for 2026.
- SME preferential rates: 15% (first RM150,000), 17% (RM150,001-600,000), 24% (above RM600,000).
- SME eligibility: paid-up share capital ≤RM2.5M AND gross business income ≤RM50M.
- Petroleum income tax: separate 38% rate on petroleum operations.
Costs
- Standard corporate tax rate (non-SME): 24%
- SME rate, first RM150,000: 15%
- Petroleum income tax: 38%
Common mistakes
- Assuming all companies qualify for SME rates — both the paid-up capital and gross income thresholds must be met simultaneously.