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01
Company tax is not calculated directly on turnover
Sales or revenue is only the starting point. LHDN's Company FAQ explains that gross business income includes sums receivable or deemed received from trading stock or services during the basis period. Tax is charged on gains or profits after allowable deductions and tax adjustments.
Gross business income
Sales, service fees, commissions and other business income.
Allowable expenses
Expenses wholly and exclusively incurred to produce income.
Chargeable income
Income after tax adjustments, capital allowance and loss treatment.
02
How SME corporate tax rates work
LHDN's company tax rate page states that for YA 2023-2024, a qualifying company with paid-up capital not more than RM2.5 million and gross business income not more than RM50 million is taxed at 15% on the first RM150,000, 17% on RM150,001 to RM600,000, and 24% on the balance. Other companies are generally taxed at 24%.
03
Loss-making companies still need e-C attention
No profit does not mean no filing obligation. LHDN's Corporate Tax page notes that companies must keep records and supporting documents for 7 years, and the return still needs to be submitted even where accounts show a loss. Dormant companies generally do not submit e-CP204 but still submit e-C annually.
04
Three concepts owners often mix up
Accounting profit is not tax profit
Some accounting expenses are not deductible and some assets require capital allowance treatment.
Company money is not personal money
Salary, dividends, director advances and director loans should be separated.
Lower rate does not mean simple compliance
SME tax rates still come with CP204, e-C, accounting and records.
05
Official sources and disclaimer
This guide is for general educational purposes only and is not tax advice. Tax rates, deductions, filing deadlines and incentive eligibility may change and depend on each company's facts. Please consult a tax professional or refer to the latest LHDN guidance before making decisions.