The resident corporation is responsible for paying income tax in Malaysia (Sendirian Berhad and Berhad or Sdn Bhd). If you want to learn more about SDN BHD companies, read this guide on SDN BHD companies and how to register an SDN BHD business in Malaysia.
When operating their businesses in Malaysia, those corporations must be making gains or earnings. There are some of them:
- Public and Private limited companies
- Business trust
- Partnership
- Limited liability partnership
- A branch of a foreign corporation
Any of these corporate entities/corporations are subject to taxation in Malaysia based on the revenue they generate from their operations. Corporation tax is not applied on money earned abroad. Air transportation, banking, insurance, and shipping, on the other hand, are not protected by this exception.
For company tax purposes, taxable revenue covers all forms of profits that are normally obtained from various Malaysian business projects. Profits/gains from a company, leases, dividends, insurance, and some other forms of income are all examples of earnings.
Dividends, on the other hand, are not taxed and all companies follow the Single-Tier System (STS). The capital gain is therefore not taxable; however, there are a few exceptions to this provision. Capital profits resulting from the disposition of a corporation’s property are included in this definition