How corporate tax works in Malaysia
Malaysia taxes companies on income accruing in or derived from Malaysia. Resident companies are also taxed on foreign-sourced income received in Malaysia, and tax residence depends on where management and control are exercised.
The standard company tax rate is 24%. Qualifying resident companies with paid-up capital of RM2.5 million or less and gross business income of not more than RM50 million may use a tiered rate of 15% on the first RM150,000, 17% on the next RM450,000 and 24% above that.
{ "Malaysia also has a 38% petroleum income tax, a 25% marginal-field rate, and Pillar Two rules": "the multinational top-up tax and qualified domestic minimum top-up tax apply for financial years beginning on or after 1 January 2025." }
Tax rates at a glance
- Standard corporate tax
- 24%Standard
- SME tier
- 15% / 17% / 24%
- Petroleum income tax
- 38%
- Marginal field rate
- 25%
- QDMTT / MTT
- 15%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
SMEsRegional operatorsFoundersInvestorsHolding structures
Watch out for
- Malaysia's corporate tax headline rate is only part of the bill. SST, payroll taxes, stamp duty, RPGT, CGT, withholding taxes and transfer pricing still matter.
- Budget 2026 did not announce a new general corporate rate, but it did confirm that carbon tax is slated for next year in the iron, steel and energy sectors.
- Labuan is a separate regime. If the company is actually a Labuan vehicle, the onshore 24% rate is not the right starting point.
Frequently asked questions
Does Malaysia have corporate tax?
Yes. The standard corporate income tax rate is 24%, with lower tier rates for some smaller qualifying resident companies and separate petroleum and Labuan regimes.
What is the SME corporate tax rate in Malaysia?
Qualifying resident companies can pay 15% on the first RM150,000 of chargeable income, 17% on the next RM450,000 and 24% above that.
Is Malaysia good for companies?
It can be, especially for real operating businesses with regional staff or customers. The structure still needs careful handling because SST, payroll and capital gains rules can add friction fast.