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马来西亚工商资讯提供 Commerce and Industry of Malaysia, kuala lumpur, Cheras (2025)

06/08/2025

Case study on the company's change of fiscal year settlement date and confirmation of the implementation date of electronic invoices

Company AZY changes the close of its accounting period from 30 June to 31 December. The original accounting period for financial year (FY) 2022 is from 1.7.2021 until 30.06.2022. The new accounting period after the change for FY2022 is from 1.7.2021 until 31.12.2022 (18 months).

Based on the FY2022 audited accounts for 18 months, its annual turnover is RM60 million. The 12-month average turnover of Company AZY for FY2022 is RM40 million (RM60 million / 18 months x 12 months) and confirmation on the mandatory e-Invoice implementation date for Company AZY is 1 January 2025.

https://Companyregistrationkualalumpur.wasap.my

06/08/2025

For new businesses or operations commencing from the year 2023 to 2025 with an annual turnover or revenue of at least RM500,000, the e-Invoice implementation date is 1 July 2026.

For new businesses or operations commencing from year 2026 onwards, the e-Invoice implementation date is 1 July 2026 or upon the operation commencement date.

However, if the first year’s turnover or revenue is less than RM500,000, the e-Invoice implementation date would be 1 January in the second year following the year in which the total annual turnover or revenue reached RM500,000.

https://Companyregistrationkualalumpur.wasap.my

05/08/2025

Mr. Jamal (Supplier) made a sale of 200 office chairs to Greenz Sdn. Bhd. (Buyer) and had issued an e-Invoice for the transaction.

Greenz Sdn. Bhd. paid RM2,000 for the 200 chairs (at RM10 per chair). However, 8 units of the office chairs received by Greenz Sdn. Bhd. were faulty and had been returned. Mr. Jamal issued a refund note e-Invoice of RM80 (i.e., RM10 X 8 faulty chairs) to document the refunded amount.

https://Companyregistrationkualalumpur.wasap.my

05/08/2025

Types of e-Invoices to be issued:

1. Invoice: A commercial document that itemises and records a transaction between a Supplier and Buyer, including issuance of self-billed e-Invoice to document an expense.

2. Credit Note: A credit note is issued by Suppliers to correct errors, apply discounts, or account for returns in a previously issued e-Invoice with the purpose of reducing the value of the original e-Invoice. This is used in situations where the reduction of the original e-Invoice does not involve return of monies to the Buyer;

3. Debit Note: A debit note is issued to indicate additional charges on a previously issued e-Invoice; and

4. Refund Note: A refund note e-Invoice is a document issued by a Supplier to confirm the refund of the Buyer’s payment. This is used in situations where there is a return of monies to the Buyer.

https://Companyregistrationkualalumpur.wasap.my

05/08/2025

Scenarios requiring e-Invoice to be issued:

1. Proof of Income: This document is issued whenever a sale or other transaction is made to recognise income of taxpayers; and

2. Proof of Expense: This type of document covers purchases made or other spending by taxpayers. It also includes returns and discounts.

It can also be used to correct or subtract an income receipt in terms of the amounts documented. In addition, there are certain circumstances where taxpayers would have to issue self-billed e-Invoice to document an expense such as foreign transactions.

For example, if the taxpayer acquired goods and/or services from foreign supplier and received an invoice from the foreign supplier who does not use Malaysia’s MyInvois System, the taxpayer would be required to issue a self-billed e-Invoice to document the expense.

https://Companyregistrationkualalumpur.wasap.my

05/08/2025

Transaction Types

e-Invoice covers typical transaction types such as B2B, B2C, and B2G. For B2G transactions, the e-Invoice flow will be similar to B2B.
e-Invoice applies to all persons in Malaysia.

All individuals and legal entities are required to comply with e-Invoice requirement, including:

1. Association;
2. Body of persons;
3. Branch;
4. Business trust;
5. Co-operative societies;
6. Corporations;
7. Limited liability partnership;
8. Partnership;
9. Property trust fund;
10. Property trust;
11. Real estate investment trust;
12. Representative office and regional office;
13. Trust body; and
14. Unit trust.

https://Companyregistrationkualalumpur.wasap.my

31/07/2025

1. Withholding Tax (WHT) – Only if landlord is a non-resident (foreign)
• If your company rents from a foreign landlord (non-Malaysian tax resident), your company must deduct 10% withholding tax on the gross rent paid and remit it to LHDN (Lembaga Hasil Dalam Negeri).
Example:
o Monthly rent: RM 5,000
o WHT to LHDN: RM 500/month
o You pay RM 4,500 to the landlord, RM 500 to LHDN.
• WHT must be paid within 1 month from the date of payment or crediting the rent.
________________________________________
✅ 2. If landlord is a Malaysian resident
• No withholding tax is required.
• Just pay the rent to the landlord.
________________________________________
✅ 3. Can your company claim the rent as an expense?
• Yes, if the house is used wholly and exclusively for business purposes (e.g. staff accommodation, expat housing, etc.).
• You must:
o Keep the tenancy agreement in the company’s name.
o Ensure it’s clearly for business use, not private/personal use.
o Maintain supporting documents like rental receipts.
________________________________________
✅ 4. When does your company pay corporate income tax on this?
• Rental expenses reduce your company’s taxable profit.
• Corporate tax (generally 15% to 24%) is paid annually based on your company's year of assessment (YA):
o Estimate of Tax Payable: Must be submitted (via CP204) within 3 months of financial year start.
o Final Tax Payment: Upon filing Form C after year-end.
https://Companyregistrationkualalumpur.wasap.my

31/07/2025

✅ 1. Rental Paid to a Malaysian Resident Landlord

• No withholding tax is required.
• Your company pays rent to the landlord as usual.
• You can deduct the rental expense in your corporate tax return if the rental is used for business purposes (e.g. staff accommodation, business office).

📌 Just ensure the house rental is properly documented in tenancy agreement under the company name.
________________________________________
✅ 2. Rental Paid to a Non-Resident Landlord (e.g. Singaporean, etc.)
• You must withhold 10% withholding tax under Section 109F of the Income Tax Act 1967.
• You must remit the 10% tax to LHDN by the end of the following month after paying rent.
• Your company issues a CP37 form to report it

Example:
If monthly rent is RM5,000 →
You must withhold RM500 (10%) and remit it to LHDN → Pay RM4,500 to the landlord.
________________________________________
✅ 3. When Is Rental Tax Paid (By the Landlord)?
• This part is the landlord's responsibility, not yours.
• However, you may be audited if LHDN suspects unreported rental income by the landlord, especially for cash-based or informal tenancies.
________________________________________
✅ 4. SST (Sales & Service Tax)?
• Residential rental is not subject to SST.
• If it’s a commercial property and the landlord is registered for service tax, 8% service tax may apply.
https://Companyregistrationkualalumpur.wasap.my

30/07/2025

✅ 1. Can Your Sdn Bhd Rent a House?
Yes, a Sdn Bhd company can rent a residential property for:
• Business use (e.g. staff accommodation, directors’ stay for business purposes)
• Operations (e.g. a home office)
The rental agreement should be in the company’s name.
________________________________________
✅ 2. Tax Implications for the Landlord (Not Your Company)
The landlord (the house owner) will:
• Be taxed under personal income tax on the rental income
• Pay tax when filing their annual personal tax return (Form BE/B) by 30 April (for individuals)
________________________________________
✅ 3. Tax Implications for Your Sdn Bhd Company
a. Is rental payment tax-deductible for the company?
Yes, if the rented house is used wholly and exclusively for business purposes, then:
• Monthly rent is deductible from your company’s gross income under Section 33(1) of the Income Tax Act 1967

✅ Example:
If you pay RM3,000/month (RM36,000/year) for staff housing → RM36,000 is tax-deductible

But ❗️if it’s used for private use or not justified for business, it won’t be deductible.
________________________________________
✅ 4. Is There Any Withholding Tax on House Rent?
• No, there is no withholding tax for rent paid to a Malaysian resident landlord
• Yes, if the landlord is a non-resident, you must withhold 10% withholding tax on rental paid
________________________________________
✅ 5. When Does Your Sdn Bhd "Pay Tax" for Rental?
Your company doesn’t pay tax on rent paid, but it:
• Claims rent as a deductible expense in the company tax filing (Form C)
• Pays corporate income tax (generally 15%–24%) on the net profit AFTER expenses
So, rent helps reduce your tax burden.
________________________________________
✅ 6. Do You Need to Pay SST on Rent?
• Residential rent is not subject to SST
• If you rent commercial property from a landlord who is SST-registered → SST might apply (6%)
________________________________________
✅ 7. Important Compliance Notes:
• Keep a proper tenancy agreement under the company name
• Record monthly rent in your company’s accounts
• Don’t use the rented house purely for personal/director’s use unless properly declared as a benefit-in-kind (BIK)
________________________________________
Summary:
Rent paid by Sdn Bhd - Tax-deductible if for business use
Tax paid by landlord (owner) - Personal income tax on rental income
Withholding tax - 10% only if landlord is non-resident
SST - No SST on residential rent
When tax is paid - Company pays tax on net profit (Form C filing
https://Companyregistrationkualalumpur.wasap.my

30/07/2025

1. Who Pays Tax?
• The Landlord (Property Owner) is the one who must declare rental income and pay personal income tax (if individual) or corporate tax (if rented from a company).
• Your Sdn Bhd may have a tax obligation to withhold part of the rent only in certain cases (explained below).
________________________________________
✅ 2. Tax for Your Company (the Tenant)
If your Sdn Bhd rents a house for legitimate business purposes (e.g. for staff accommodation, office space, or directors’ use with justification):

📌 a) Claim as a Business Expense
• Your company can claim the rental payments as a deductible expense in the corporate tax computation only if:
o It’s supported by a valid tenancy agreement.
o The rental is wholly and exclusively for business purposes.
o Payment is made through company accounts.

📌 b) No Tax on Rental Paid
• Your company does not pay any direct tax on the house rent.
• BUT: If the landlord is a non-resident individual or company, your company must withhold 10% of the rent and remit it to LHDN under Section 109F of the Income Tax Act.
________________________________________
✅ 3. When Do You Pay Tax or Withhold?
✅ If landlord is:
Malaysian individual ❌ No WHT - Just pay rent monthly/yearly.
Malaysian company ❌ No WHT - Normal rental payments.
Non-resident individual or foreign company ✅ Yes – Withhold 10% - Must remit to LHDN by end of following month of rental payment.
________________________________________
✅ 4. Annual Corporate Tax Filing (Your Sdn Bhd)
Even though rent is an expense, your company must:
• Report the rent under deductible expenses in the Form C (annual corporate tax return).
• Submit by 7 months after financial year-end (e.g., if FYE is Dec 31, tax filing due by July 31).
________________________________________
✅ 5. Other Considerations
• If the house is for a director, it may be treated as a benefit-in-kind (BIK) and taxed in the director’s personal income tax unless the company has a strong justification that it’s a business necessity.
• SST (Sales and Service Tax) generally does not apply to residential rent.

https://Companyregistrationkualalumpur.wasap.my

30/07/2025

1. Is Rental Payment Tax-Deductible for the Company?

Yes – if the house is used for business purposes, such as:
• Staff accommodation
• Office space
• Director accommodation (only if justifiable for business)

Then, the rent is a deductible expense under Section 33(1) of the Income Tax Act 1967.

❗However, it must be reasonable and not excessive or personal in nature, or LHDN may disallow it.
________________________________________
✅ 2. When Do You Pay Tax on It?
There are no direct taxes on paying rent, but you must:
• Declare the rent as an expense when preparing your company’s annual tax filing (Form C), which is due 7 months after your financial year end.
________________________________________
✅ 3. Does the Company Need to Withhold Tax on Rent?
This applies only if the landlord is a non-resident (foreigner).
Landlord is Malaysian - ❌ Not required
Landlord is foreign/non-resident - ✅ Required 10% (under Section 109F)
You must remit 10% of the gross rent to LHDN within one month of paying rent to a non-resident landlord.
________________________________________
✅ 4. Is SST (Sales & Service Tax) Charged on Rent?
• Residential rent = ❌ Not subject to SST
• Commercial property rent = ✅ May be subject to SST (6%), only if landlord is SST-registered (threshold: RM500,000 per year)
________________________________________
✅ 5. Do You Need to Pay RPGT or Property Tax?
No. Those are landlord obligations. As the tenant, you do not pay:
• Real Property Gains Tax (RPGT)
• Quit rent / assessment
________________________________________
✅ Example Summary:
Let’s say:
• You rent a house at RM5,000/month for your Sdn Bhd director
• The landlord is Malaysian
• Your company uses the house for business-related purposes
Then:
• No withholding tax needed
• No SST
• RM60,000/year rent is a deductible business expense
• You report this as an expense in your Form C, due 7 months after year-end

https://Companyregistrationkualalumpur.wasap.my

29/07/2025

When your Sdn Bhd rents a house, the tax implications depend on whether the rental expense is for business purposes. Here’s what you need to know:

1. Corporate Tax Treatment

• If the rented house is used exclusively for business purposes (e.g., staff accommodation, office, or storage), the rent is tax-deductible under the Income Tax Act 1967.

• If the rent is for personal use (e.g., director’s private residence), it is not tax-deductible and could be considered a benefit-in-kind (BIK), taxable to the employee or director.

2. Withholding Tax (If Landlord is Non-Resident)

• If your company pays rent to a non-resident landlord, you must deduct 10% withholding tax under Section 4(d) of the Income Tax Act 1967 and remit it to LHDN by the 10th of the following month.

3. Real Property Gains Tax (RPGT) – Not Applicable

• Your company doesn’t pay RPGT unless it sells a property. Renting does not trigger RPGT.

4. Service Tax (SST) on Rent

• Residential property rent is exempt from SST.
• Commercial property rent is subject to 8% SST, but only if the landlord is a registered SST taxpayer (exceeding RM500,000 in taxable services).

When to Pay Tax on Rental Expense?

• Corporate tax is paid annually based on your financial year-end when filing the Form C (Income Tax Return) for Sdn Bhd.

• If withholding tax applies, it must be paid by the 10th of the following month after rent payment.

https://Companyregistrationkualalumpur.wasap.my

马来西亚工商资讯提供 Commerce and Industry of Malaysia

06/08/2025

06/08/2025

05/08/2025

05/08/2025

05/08/2025

05/08/2025

31/07/2025

31/07/2025

30/07/2025

30/07/2025

30/07/2025

29/07/2025

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