New Corporate Tax Rate for SME

New Corporate Tax Rate for SMEs from YA2023 Onwards

Starting from the year of assessment 2023, small and medium enterprises (SMEs) will benefit from the following preferential tax rates:

First RM150,000 of chargeable income - 15%
RM150,001 to RM600,000 of chargeable income - 17%
RM600,001 and above of chargeable income - 24%

The definition of SMEs is as follows:

1. Paid-up share capital of RM2.5 million or less;
2. Gross income of not more than RM50 million
3. No related companies with paid-up share capital exceeding RM2.5 million; and
4. No more than 20% of paid-up share capital is owned by non-Malaysian citizens or companies incorporated outside Malaysia.

SMEs with Foreign Shareholdings

Effective from the year of assessment 2024, if more than 20% of the paid-up share capital is owned by non-Malaysian citizens or companies incorporated outside Malaysia, the SME will not be entitled to the 15% and 17% preferential tax rates as mentioned earlier.

This implies that companies with more than 20% foreign shareholdings will be taxed at a flat rate of 24% from the year of assessment 2024 onwards.

Please do not hesitate to contact us for more information:

Ten Jia Sheng
014-911 1880
jsten@jsc-corp.com