ENTERTAINMENT EXPENSES IN MALAYSIA (DETAILED GUIDE)

In Malaysia, the tax treatment of business entertainment expenses is strictly regulated under the Income Tax Act 1967 (ITA). Businesses must correctly classify and document these expenses, as deductibility can be either 100%, 50%, or completely non-deductible, depending on the nature of the expense and the recipient.

The primary governing principle is that an expense must be wholly and exclusively incurred in the production of gross income (Section 33(1) of the ITA). Even if this test is met, entertainment expenses are generally restricted, with the exceptions explicitly outlined in Section 39(1)(l) of the ITA.

Entertainment expenses are defined under Section 18 of the Income Tax Act 1967 as:

Any outgoings incurred in connection with entertainment, whether for clients, customers, suppliers, or employees.

LHDN divides entertainment into 3 key categories:

1. Fully deductible (100%)
2. Partially deductible (50%)
3. Non-deductible

Below is the full breakdown:

🟩 1. 100% TAX-DEDUCTIBLE ENTERTAINMENT

These expenses are fully deductible because they directly support business operations or employee welfare.

A. Entertainment for Employees

Allowed 100% because it relates to staff welfare and productivity.

Examples:

• Annual dinner / festival celebrations
• Staff recognition events
• Farewell parties
• Internal team-building activities
• In-office refreshments (coffee, tea, snacks)

Important: It must be for staff only. If clients attend, the expense becomes 50% deductible (partly entertainment).

B. Promotional / Publicity Entertainment for the Public

These are 100% deductible because they directly promote sales.

Examples:

• Free product samples
• Product launch events open to public
• Roadshows with free food/drinks
• “Buy one free one” promotions
• Corporate open houses for the public
• Free gifts with company logo (branding & marketing)

C. Free Services/Food/Drinks Provided in the Normal Course of Business

If entertainment is part of business activity, it is fully deductible.

Examples:

• A hotel offering complimentary drinks to guests
• A café offering free cookies to customers
• A showroom offering refreshments to walk-in customers

🟧 2. 50% TAX-DEDUCTIBLE ENTERTAINMENT

This is the most common category, and applies whenever the entertainment is for clients, suppliers, potential customers, or business associates.

Examples of 50% deductible expenses:

• Client meals in restaurants or hotels
• Business entertainment at golf clubs
• Gifts to clients (not promotional items)
• Company paying for client’s event tickets (concerts, sports events, etc.)
• Refreshments during business discussions with external parties
• Meeting clients at cafés

General Rule:

If the entertainment is intended to maintain relationships with business partners, it is 50% deductible unless it qualifies for 100% treatment.

🟥 3. NON-DEDUCTIBLE ENTERTAINMENT

These expenses are NOT allowed as deductions because they are personal, unrelated to business, or excessive.

Examples:

• Private family events
• Personal celebrations (birthdays, weddings)
• Lavish entertainment without business purpose
• Expenses with no receipts or documentation
• Alcohol for internal staff (unless business-related occasions)

⌂ Conclusion: Entertainment Expenses in Malaysia

The tax treatment of entertainment expenses in Malaysia is highly specific and restrictive, moving away from a general full deduction. Businesses must apply a three-step test to determine deductibility:

√ Is the expense considered 'Entertainment'? (Under Section 18, which is a broad definition and includes promotional expenses.)

√ Is it 'Wholly and Exclusively' incurred for income production? (Under Section 33(1).)

√ If YES to both, which category does it fall into?

 

🧾 CHECKLIST: IS AN EXPENSE ENTERTAINMENT & HOW MUCH IS DEDUCTIBLE?

Expense Type	Is it Entertainment?	Deductible
Staff-only event	Yes	100%
Client lunch	Yes	50%
Product launch for public	Yes	100%
Gifts with company branding	Yes	100%
Gifts without branding	Yes	50%
Alcohol at client dinner	Yes	50%
Personal celebration	No	0%

 

𝐕𝐢𝐬𝐢𝐭 𝐮𝐬

Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

 

𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)

A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients

Website www.thks.com.my

Facebook https://bit.ly/42XKWsk

Instagram https://bit.ly/42Uqf0e

Linkedin https://bit.ly/3EH885M

 

𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)

An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients

Website www.ktp.com.my

Instagram https://bit.ly/3Rko5kN

Linkedin https://bit.ly/3sapf4l

Telegram http://bit.ly/3ptmlpn

 

𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞

An internal community for our colleagues on work and leisure.

Tiktok http://bit.ly/3u9LR6Q

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Facebook http://bit.ly/3ateoMz

Instagram https://bit.ly/3jZpKLo

 

𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫

An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.

Instagram https://bit.ly/3u2PxHg

Facebook http://bit.ly/3rPxz9o

#KTP #Thk

#Myktp

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#ktpcareer

#24years

 

What is the differences between winding up and striking off in Malaysia
 
The key differences between winding up and striking off in Malaysia.
 
Strike Off:

• Governed under Section 550 of the Companies Act 2016.
• Suitable for dormant or inactive companies with no assets or liabilities.
• Process starts with a board resolution (shareholder consent advisable), submission of strike-off application to SSM, and publication in the SSM Gazette with a 60-day objection period.
• Faster and simpler procedure typically taking 6-12 months.
• Lower cost
• Final dissolution occurs upon SSM gazette strike-off notice.
• Risk of false declaration in the application is an offense.
• Company can potentially be reinstated within 7 years.
• Does not involve liquidators.

 
Winding Up:

• Governed under Section 439(1)(b) of the Companies Act 2016.
• Suitable for solvent companies or where assets, liabilities, and creditor claims must be properly handled.
• Requires a special resolution, Declaration of Solvency, and appointment of a liquidator.
• Involves liquidator managing asset disposal, settling creditors, and distributing remaining assets.
• Longer process taking 12-24 months.
• Higher overall costs
• Public notice in both SSM Gazette and local newspapers.
• Final dissolution confirmed by liquidator’s final return to SSM.
• False declaration of solvency is an offense.
• It is an irreversible and formal closure procedure

 
 

Particular	Strike Off	Winding Up
Legal Provision	Section 550 CA 2016	Section 439 CA 2016
Eligibility	Dormant, no assets/liabilities	Solvent, assets and liabilities handled
Process	Application, Gazette notice	Liquidator appointed, multiple notices
Public Notice	SSM Gazette only (60 days)	SSM Gazette + local newspaper
Timeframe	6-12 months	12-24 months
Final Result	SSM strike-off notice dissolution	Liquidator's final return dissolution
Legal Risk	False declaration offense	False solvency declaration offense
Reversibility	Can be reinstated within 7 years	Irreversible

 
 
In conclusion, striking off is suitable for companies that are inactive, have no creditors or assets, and want a straightforward, cost-effective closure. Winding up is a more formal, comprehensive process required for companies with assets, liabilities, or creditors that need proper settlement before dissolution.​
 
 
 
Summary & Topic :
 

• Strike Off is suited for dormant companies with no assets or liabilities. It requires a board resolution, submission of strike-off application to SSM, and publication in the SSM Gazette with a 60-day objection period. The process is faster (6-12 months), simpler, and less costly (~RM 5,600+). It results in company dissolution upon SSM strike-off notice and can be reversed within 7 years. It does not involve liquidators. False declarations in the application are offenses.

 
 

• Winding Up applies to solvent companies where assets, liabilities, and creditor claims must be properly handled. It requires a special resolution, a Declaration of Solvency, and the appointment of a liquidator who manages asset disposal, creditor settlements, and asset distribution. It takes longer (12-24 months) and costs more. Public notices are published in both the SSM Gazette and local newspapers. Dissolution is finalized upon the liquidator’s final return. False declarations of solvency are offenses. The process is irreversible

 
𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years
 

Declaration of Dividends in a Sdn. Bhd. (Private Limited Company)
 
1. Introduction  
2. What is a Dividend?
 

• Cash Dividend – payment made in cash to shareholders.
• Share Dividend – Issuance of additional shares of the Company instead of cash.
• Any form of dividend or reward that the company deems appropriate and beneficial to both the company and its shareholders

 
Cash dividends are the most common form of dividend declared by Sdn. Bhd. companies.
 
3. Conditions and Criteria for Dividend Declaration
 
A Sdn. Bhd. needs to meet the following requirements before declaring a dividend:
 

• Solvency Test – The company must remain solvent after the distribution. This means the company is able to pay its debts as and when they fall due within 12 months after the dividend is paid.

• Cash Flow Statement – The company’s directors or accountants have to ensure that a cash flow statement is prepared to confirm the company’s ability to remain solvent for the next 12 months.

• Profits Availability – Dividends can only be paid out of profits available for distribution (i.e. retained earnings) and not from share capital.

 
4. Why Do Companies Declare Dividends?
 
Declaring dividends serves several purposes:
 

• Rewarding Shareholders – Demonstrates appreciation for investors’ support and provides them with a tangible return on investment.

• Enhancing Company Reputation – A consistent dividend policy reflects good financial health.

• Building Investor Confidence – Regular dividend payments attract investors and signal that the company is stable and well-managed.

 
5. Steps to Declare a Dividend in a Sdn. Bhd.:
 

• Conduct a Solvency Test
  Ensure the company is solvent — meaning it can pay all its debts within 12 months after the dividend is paid by conducting the Solvency Test and Cash Flow Statement.

• Inform the Company Secretary

• Approve and Declare the Dividend
  The board of directors must approve the dividend amount and declaration date through a resolution.

• Issue Dividend to Shareholders

 
 
7. Conclusion
   
Important Note 𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years
 
 

A GUIDELINE  TO DIRECTOR FEES, SALARIES, AND REMUNERATION

Director compensation is a complex area of financial reporting and corporate governance. Accounting standards applicable to private entities require companies to properly account for and disclose director fees, director salaries, and director remuneration in their financial statements. Understanding the precise distinction between these components is vital for accurate reporting.

1. Director Fees

• Recognition: Director fees are recognized as an expense in the period the services are rendered, regardless of when payment is made
• Disclosure: Fees paid to directors must be disclosed in the financial statements. Different fee amounts received by directors should be clearly itemized.

2. Director Salaries

• Recognition: Director salaries are paid for employment duties and are considered employee benefits, distinct from director fees. These are recognized as expenses in the period the services are rendered.
• Disclosure: Salaries must be disclosed separately from director fees in the financial statements

3. Director Remuneration

• Definition: Director remuneration includes all forms of compensation provided to directors—fees, salaries, bonuses, other benefits, and incentives.
• Recognition: Remuneration is recognized when incurred (earned by the director), irrespective of the payment date. Disclosure: The total remuneration paid to each director must be disclosed, itemized by components such as fees, salaries, bonuses, and benefits
• Disclosure: The total remuneration paid to each director must be disclosed, broken down into components like fees, salaries, bonuses, and benefits.

4. Tax Implications

• Director Fees: Fees are typically subject to income tax (and reported in the director's personal tax returns). Companies must withhold tax at the applicable rate and remit it to tax authorities.
• Director Salaries: Salaries paid under an employment contract are subject to income tax and EPF (Employees Provident Fund) contributions. Employers must comply by deducting tax and making EPF contributions on the director's behalf
• Director Remuneration: The entire package, including bonuses and non-cash benefits (e.g., cars, housing) , may be subject to tax. All such benefits must be evaluated and disclosed in accordance with Malaysian tax laws.

5. Governance & Transparency

• Governance: Director remuneration must be approved in line with good corporate governance practices, typically by shareholders in the Annual General Meeting (AGM) or the board.
• Disclosure: Companies are required to fully disclose the breakdown of director compensation in their financial statements for transparency.

In conclusion, companies are required to accurately report director fees, salaries, and other forms of remuneration in their financial statements, based on the period during which the services are rendered, rather than when the payments are made. Companies must disclose the total compensation, including any bonuses or non-cash benefits, such as housing or vehicles. Additionally, they must comply with tax regulations by withholding the appropriate tax on director fees and salaries, and ensuring the necessary statutory contributions, such as the Employees Provident Fund (EPF), are made. Following these guidelines ensures proper financial reporting and compliance with both accounting standards and tax laws.
 
𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years
 
 
 

Audited vs Unaudited Financial Reports in Malaysia

📌Definition & Key Differences

Aspect	Audited Financial Report	Unaudited Financial Report
Prepared by	Company, reviewed and certified by licensed external auditor	Prepared internally by management; no external audit
Legal status	Mandatory for companies that do not qualify for audit exemption under Companies Act 2016	Allowed only for private companies that meet audit exemption criteria under SSM Practice Directive 10/2024
Audit opinion	Yes — auditor provides opinion on fairness and compliance	No audit opinion — statements not independently verified
Level of assurance	High — provides confidence to stakeholders (investors, banks, regulators)	Low — only internal verification, limited external use
Submission method	MBRS (XBRL format) to SSM within 30 days of circulation	MBRS (XBRL) submission with audit exemption documents
Key documents	Audited FS, auditor’s report, directors’ report, statement by directors, statutory declaration	Unaudited FS, directors’ report, audit exemption certificate, statutory declaration

 
📝 Submission Requirements
🔹Audited Report:

• Appoint a License auditor
• Prepare complete audited financial statements
• Include:

• Auditor’s report
• Directors’ report
• Statement by directors
• Statutory declaration

• Circulate to shareholders within 6 months of financial year end
• Lodge with SSM via MBRS within 30 days after circulation

 
🔹  Unaudited Report (Audit Exempt):
Only applicable if company meets audit exemption criteria under SSM PD 10/2024

• Ensure company qualifies (revenue, assets, and employee thresholds)
• Prepare unaudited financial statements (internally)
• Include:

• Directors’ report
• Audit Exemption Certificate
• Statement by directors
• Statutory declaration 

• Circulate to shareholders within 6 months of financial year end
• Lodge with SSM via MBRS within 30 days after circulation

🎯 Purpose of Audited vs Unaudited Reports

Purpose	Audited Report	Unaudited Report
Legal Compliance	Required by law unless exempt	Valid only if company qualifies under SSM exemption rules
Assurance for Stakeholders	Provides verified information; builds trust	Limited to internal use or simple ownership structures
Bank Loans / Financing	Usually required by banks and investors	Often not accepted for financing
Internal Accountability	Enhances governance and accountability	Sufficient for closely held or dormant companies
Investment / IPO Readiness	Essential for due diligence, valuation, and compliance	Not suitable for companies preparing for listing or M&A
Cost Consideration	Higher cost (audit fees, time)	Lower cost, easier process
Tax Submission Support	Supports accurate and defensible tax reporting	Acceptable for small entities if records are proper
Avoiding Penalties	Ensures full compliance with Companies Act	Requires careful adherence to exemption criteria

 

 
🧾 Documents Typically Required
 

Document	Audited	Unaudited (Audit Exempt)
Financial Statements	✔	✔
Auditor’s Report	✔	✘
Directors’ Report	✔	✔
Statement by Directors	✔	✔
Statutory Declaration (Sumpah)	✔	✔
Audit Exemption Certificate	✘	✔

 
Summary
If doing Audited Report:

1. Engage a licensed auditor and perform the audit
2. Prepare audited financial statements + auditor’s report + directors’ report etc.
3. Prepare & do the statutory declaration
4. Circulate to shareholders within 6 months of year end
5. Lodge with SSM (via MBRS / in XBRL) within required deadline
6. Ensure all accompanying statutory declarations etc. are signed
7. Submit digitally via MBRS (XBRL) once applicable

If doing Unaudited Report (for exempt company):

1. Confirm that company meets audit exemption criteria under PD 10/2024
2. Prepare financial statements (unaudited) under applicable accounting standards
3. Prepare Audit Exemption Certificate  and do the statutory declaration (confirming eligibility)
4. Prepare directors’ report, statement by directors, statutory declaration
5. Circulate to shareholders within 6 months of year end
6. Lodge / submit all required documents (unaudited FS + reports + exemption certificate + declaration) to SSM within 30 days from distribution
7. Submit digitally via MBRS (XBRL) once applicable

Remark: What is Statutory Declaration
In Malaysian context, under the Companies Act 2016, both audited and unaudited statements must be accompanied by a statutory declaration by a director (or authorized person) verifying that the statements are true and correct, and in compliance with the law. This is required under Section 251 / 252.

𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years
 

Understanding Realized and Unrealized Foreign Exchange
What is Realized FX? Example:

• Invoice issued to a US customer at US$1 = RM4.50.
• Customer pays later when US$1 = RM4.60.
• The 10cent difference per US$ is a realized gain.

Realized FX impacts both profit & loss and cash flow because money actually changes hands.
 
Let’s assume:

• Invoice Amount: US$10,000
•  At invoice time (RM4.50):

RM Amount = 10,000 × 4.50 = RM45,000

• At payment time (RM4.60):

RM Received = 10,000 × 4.60 = RM46,000

•  Forex Gain = RM1,000 (Realised)

 
What is Unrealized FX? Example:

• At month end, a US$ 10,000 receivable is revalued at the new exchange rate.
• If the rate changes from RM4.50 to RM4.55, a paper gain of RM500 is recognized.

Unrealized FX affects profit & loss but not cash flow, since the transaction is not yet settled.
 
Why It’s Important

• Provides a true and fair view of financial performance.
• Helps management and stakeholders understand how currency fluctuations impact profitability.
• Important for risk management in businesses with large foreign currency exposure.

Conclusion 𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years

What Are The Differences Between Memorandum & Articles of Association and the Constitution?
 

• The Memorandum and Articles of Association (M&A) and the Constitution are governing documents used to regulate the formation and internal governance of companies in Malaysia.
• Before the implementation of the Companies Act 2016 (CA 2016), companies were required to adopt two separate documents—the Memorandum of Association, which set out the company’s external powers and objectives, and the Articles of Association, which regulated its internal management.
• With the enforcement of the Companies Act 2016 on 31 January 2017, the requirement for two separate documents was replaced by a single consolidated document known as the Constitution.
• This reform aimed to simplify company incorporation and governance, enhance flexibility, and better align corporate practices with modern business needs.

 
Nature
 

• The Memorandum of Association served to define the company’s relationship with the external parties. It outlined key matters such as:

 

• The Articles of Association set out the internal rules of the company, including:

 

• In contrast, the Constitution under CA 2016 performs the functions of both documents in a single, unified document, offering more flexibility by:

Key Differences

Aspect	Memorandum & Articles of Association (M&A)	Constitution (CA 2016)
Document Format	Two separate documents	One integrated document
Governing Law	Companies Act 1965 (Repealed)	Companies Act 2016
Mandatory?	Yes, for all companies	No, unless voluntarily adopted or required by law
Applicability	Companies incorporated before 31 Jan 2017	Companies incorporated on or after 31 Jan 2017 (or by adoption)

 
Benefits of Sdn. Bhd. Having a Constitution

1. Customisation of Governance

• Enables the company to structure its internal rules according to its specific business model and management preferences.
• Allows the adoption of customized procedures for board meetings, appointment of directors, and transfer of shares.

2. Clarity and Certainty

• Clearly sets out the rights and obligations of shareholders, directors, and officers.
• Minimizes confusion by providing more precise rules than those offered by the default provisions of the Companies Act, 2016.

3. Protection of Shareholder Interests

• Can include provisions to protect minority shareholders’ rights.
• Can restrict share transfers to prevent unwanted parties from becoming shareholders.

4. Flexibility in Operations

• Can modify or replace default rules in Companies Act, 2016 for efficiency (e.g., shorter notice for meetings, specific quorum requirements).

5. Continuity and Stability

• Provides a fixed governance framework that remains in place even if laws change, unless amended by members.
• Useful for family-owned or closely held companies.

6. Enhanced Investor Confidence

• Investors often prefer companies with a clear Constitution as it demonstrates well-structured governance.

 
Conclusion

• The transition from the Memorandum and Articles of Association to the Constitution marks a significant shift in Malaysian corporate governance.
• The M&A regime under the old Companies Act was often viewed as outdated and rigid, while the Constitution under the current Act allows companies greater freedom to structure their internal rules based on their specific needs.
• Understanding the differences between these documents is essential for company officers, shareholders, and professionals involved in corporate compliance.
  
  
  𝐕𝐢𝐬𝐢𝐭 𝐮𝐬

MALAYSIAN PRIVATE ENTITIES REPORTING STANDARD (MPERS): TANGIBLE VS. INTANGIBLE ASSETS

• Recognition and Measurement: A tangible asset is recognized when it's probable that future economic benefits will flow to the entity and its cost can be measured reliably. It is initially measured at cost, which includes the purchase price, directly attributable costs, and an estimate for dismantling and site restoration.
• Measurement After Initial Recognition: After the initial recognition, MPERS allows for a choice between two models for a class of assets:
  • Cost Model: The asset is carried at its cost less any accumulated depreciation and impairment losses.
  • Revaluation Model: The asset is carried at its fair value at the date of revaluation, less subsequent accumulated depreciation and impairment losses.
• Depreciation: The asset's cost is depreciated over its useful life, except for land. The depreciation method should reflect how the entity expects to consume the asset's economic benefits.

 
EXAMPLES OF ASSETS

• Land and Buildings: The physical location of a business, including office buildings, factories, warehouses, and the land they are built on.
• Furniture and Fittings: Physical assets such as desks, chairs, shelves, and cabinets used to furnish an office or commercial space.
• Office Equipment: This includes items like printers, scanners, and telephones that are used for daily business operations.

Intangible assets are non-monetary assets without physical substance, such as patents, copyrights, and software.

• Recognition: An intangible asset must be identifiable, controllable by the entity, and expected to generate future economic benefits. Internally generated intangible assets (like a brand) are generally not recognized.
• Measurement: MPERS requires that all intangible assets (other than goodwill) must be measured using the cost model only. Unlike tangible assets, the revaluation model is not permitted for intangible assets.
• Amortization: All intangible assets under MPERS are considered to have a finite useful life and must be amortized. The useful life of an intangible asset, including goodwill, is capped at a maximum of 10 years if it cannot be reliably estimated. This differs from other standards that may allow for indefinite useful life for certain intangible assets.
• Goodwill: Under MPERS, goodwill is amortized over its useful life. If the useful life cannot be reliably estimated, it must be amortized over a maximum of 10 years.

 
EXAMPLES OF ASSETS

• Patents: Legal rights granted to an inventor that provide exclusive rights to an invention for a set period, preventing others from making or selling it.
• Trademarks: A legally protected symbol, logo, or name that identifies a company's products or services and distinguishes them from competitors.
• Copyrights: A legal right that gives the creator of original works (e.g., books, music, or software) exclusive rights to its use and distribution.
• Goodwill: The value of a company's reputation and brand name, often recognized during the acquisition of another business

 
3. Key Differences Between MPERS and Other Frameworks
 
KEY DIFFERENCES

Feature	Intangible Assets	Tangible Assets (PP&E)
Definition	Non-physical resources that lack a physical form but still hold significant value, often derived from legal rights or a competitive advantage.	Physical, long-term assets that a business owns, can touch, and are used to generate income
Physical Substance	No	Yes
Main MPERS Section	Section 18	Section 17
Measurement After Initial Recognition	Only the Cost Model is allowed.	Both the Cost Model and the Revaluation Model are allowed.
Useful Life	All intangible assets are considered to have a finite useful life.	May have a finite or infinite useful life (e.g., land).
Expense Allocation	Amortization is used.	Depreciation is used

 
𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years

Understanding Self-Billed e-Invoice in Malaysia: What the General Public Needs to Know for 2025

As Malaysia moves into the e-Invoice era, more businesses — including freelancers, small vendors, and gig workers — will encounter a concept called self-billed e-Invoice. This format is part of the Inland Revenue Board’s (LHDN) broader e-Invoicing framework, which will soon become mandatory for all businesses.

If you’re unsure whether you need to issue an invoice or your customer creates one on your behalf, this article breaks it down clearly.

📊 Overview: What is a Self-Billed e-Invoice?

A self-billed e-Invoice is an e-Invoice generated by the buyer (not the seller) and then submitted to LHDN. This happens in cases where:

• The supplier (seller) is not equipped to issue an e-Invoice
• The business arrangement allows the buyer to prepare the invoice instead

For example, large companies dealing with small vendors or independent contractors often use this method to speed up payments and meet compliance.
Scenarios Requiring Self-Billed E-Invoices in Malaysia:

• Payments to Agents, Dealers, and Distributors (ADDs):
  • Required when a buyer pays commissions or compensation to ADDs.
• Purchases from Foreign Sellers:
• Required if the Malaysian buyer buys goods/services from a foreign seller who does not issue an e-invoice.
• Required when profits are distributed by entities that are:
  • Not publicly listed, and
  • Not single-tier companies.
• Required for platforms (e.g., Shopee, Lazada) to issue on behalf of sellers who do not issue their own e-invoices.
• Required for any winnings paid out.
• Required when goods/services are acquired from individuals not conducting business.
• Required unless:
  • Interest is charged by financial institutions to the public.
  • An employee pays interest to their employer.
  • A foreign entity pays interest to a Malaysian taxpayer.
• Required if the insurer does not issue an e-invoice for claim or benefit payments.
• Profit Distribution:
• E-Commerce Transactions:
• Payouts to Betting and Gaming Winners:
• Acquisition from Individual Taxpayers (Non-Business):
• Interest Payments:
• Claims, Compensation, or Benefit Payments from Insurers:

✅ Requirements for Self-Billing

According to LHDN, self-billed e-Invoices are allowed if both parties agree in writing. The buyer must:

• Inform the supplier in advance
• Generate and validate the e-Invoice through MyInvois portal or API
• Provide a copy to the seller after submission

📄 Key Information in a Self-Billed e-Invoice

Even though the buyer prepares the invoice, it still includes:

• Supplier’s name and tax identification number (TIN)
• Description of goods/services
• Amount, tax breakdown, and total
• Date and payment details

📌 What Should You Do Next?

If you’re a small business owner or independent contractor:
✅ Check if your clients are transitioning to e-Invoice
✅ Ask if they’ll self-bill on your behalf
✅ Provide your full details (name, TIN, contact info)
✅ Request a copy of each e-Invoice generated under your name
If you’re a business buying from small vendors:
✅ Get written consent from suppliers
✅ Ensure your system can issue and submit self-billed e-Invoices
✅ Keep proper records for tax and audit purposes
 
🔍 Conclusion

Self-billed e-Invoices are now an essential part of Malaysia’s e-Invoicing framework, especially for businesses dealing with freelancers or small vendors. Understanding how and when to use them helps ensure compliance, reduce delays, and simplify day-to-day operations. Make sure your processes are aligned with current LHDN requirements.

𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years

Why is Sdn. Bhd. the better choice for your business?
- Legal Liability? Tax Benefits? and Incorporation Procedures?
 
Introduction
 
When deciding on the most suitable business structure in Malaysia, understanding the benefits and requirements of incorporating a Private Limited Company (Sdn. Bhd.) compared to operating as a Sole Proprietorship (Enterprise) is crucial. This comparison highlights why many entrepreneurs prefer Sdn. Bhd. for its legal protection, tax advantages, and growth potential.
 

Topic	Sdn Bhd (Private Limited Company)	Enterprise (Sole Proprietorship)
Limited Liability Protection	Shareholders’ liability is limited to their share capital, protecting personal assets from company debts and liabilities.	Owner has unlimited liability; personal assets can be used to settle business debts.
Separate Legal Entity	The company is a distinct legal entity, capable of owning property, entering into contracts, suing, and being sued independently of its shareholders.	No separate legal entity; business and owner are the same.
Perpetual Succession	Company continues to exist regardless of changes in shareholders or directors, ensuring business continuity.	Business ends if the owner dies or withdraws.
Lower Tax Rates and Tax Benefits	Corporate tax rates are generally lower, start from 17% to 24% with eligibility for tax incentives and exemptions.	Income is taxed as personal income, with rates up to 30%, generally higher tax burden.
Stronger Financing Ability	Easier to obtain bank loans and attract investors; can raise capital through share issuance.	Financing mainly depends on personal funds or loans, harder to secure external funding.
Professional Business Image	Higher credibility with customers, suppliers, and investors, enhancing business opportunities.	Lower market credibility.
Flexible Share Transfer	Shares can be transferred to new investors or heirs, allowing flexible ownership changes.	Ownership cannot be transferred.
Hiring Foreign Employees	Can apply for work permits to hire foreign talent.	No such facility is available.
Incorporation Requirements	- Minimum 1 director (aged 18+, resident or non-resident) - Minimum 1 shareholder (individual or corporate, foreigners allowed 100% ownership) - Must appoint a licensed company secretary within 30 days	No director or secretary required; owner manages business directly.
Capital Requirements	No minimum paid-up capital; can start with as low as RM1, with the option to increase later.	No capital requirements.
Incorporation Process	1. Name reservation with SSM 2. Prepare and sign incorporation documents 3. Submit to SSM 4. Appoint a company secretary 5. Open a bank account and obtain licenses Typically completed within 3–10 working days	No formal registration process; a business can start immediately after registration with SSM as a sole proprietorship.
Legal Entity and Liability	Company assets are liable for debts; shareholders’ personal assets are protected.	Owner is personally liable for all business debts and obligations.
Annual Compliance	Mandatory submission of annual returns, audited financial statements, and tax filings to SSM.	Minimal compliance; no audited reports required.
For E-Invocing	Company TIN	Personal TIN

 
 
Key Benefits of Incorporating an Sdn Bhd
 

• Limited liability protection safeguards personal assets from business risks.

 

• Separate legal entity and perpetual succession ensure business stability and continuity。

 

• Lower corporate tax rates and available tax incentives improve profitability.

 

• Better access to financing and investment opportunities supports business growth and expansion.

 

• Enhanced professional image and credibility attract more customers and partners.

 

• Flexible share transferability facilitates investment and succession planning.

 

• Relatively simple and fast incorporation process with low minimum capital requirements.

 
As a comparison, we can know that the Sdn. Bhd. is the preferred business structure for entrepreneurs seeking growth, legal protection, and credibility in Malaysia, compared to Enterprise, which suits smaller, lower-risk, and simpler operations.
 
 
Conclusion
 
In summary, establishing an Sdn. Bhd. offers significant advantages, including limited liability, separate legal status, favorable tax treatment, and stronger financing opportunities, making it an ideal choice for businesses aiming for sustainable growth and credibility. While Enterprises may suit smaller or simpler operations, the benefits of Sdn. Bhd. provide a solid foundation for long-term success and expansion in Malaysia’s competitive market.

𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years
 

SSM 2025 Compound Reduction Incentive: Strategic Opportunity for Companies and Directors to Settle Outstanding Compounds
 
In 2025, Companies Commission of Malaysia (SSM) introduced new initiative offering a 95% compound reduction incentive to help companies and their directors to settle outstanding compounds. This move is in line with the government's effort to promote corporate compliance, ease the financial burden on businesses, and facilitate the closure of inactive companies through a streamlined process.
 
Compound Reduction and Striking Off Initiative
This incentive is part of a campaign introduced under the Moratorium Period from 16 April 2025 to 30 September 2025. Companies that are no longer in operation and wish to strike off their names with SSM under Section 550 of the Companies Act 2016 can now do so with up to 95% reduction in compound fines. This initiative is designed to encourage corporate responsibility while enabling companies to formalize closure without being hindered by high compound amounts that may have accumulated over time.
 
Who can Apply for the incentive?
To qualify for the incentive, companies must meet the following conditions:
* Have ceased business operations and do not intend to operate business.
* No assets, liabilities, or outstanding charges.
* No outstanding tax or other liabilities with any Government Department or Agency.
* Must not be a holding company.
* Is not a housing developer.
* Is not a Guarantor Corporation
 
Applications must be submitted with a fee of RM100, along with supporting documents such as the latest management accounts, directors’ resolution, and consent letters from shareholders where required.
 
Appeal for Compound Reduction
Companies with outstanding compound fines must submit a formal written appeal to SSM.
 
Encouragement to Directors
SSM strongly encourages company directors to take advantage of this limited-time to settle outstanding compounds and ensure full regulatory compliance. This will help them to avoid potential legal consequences and make it easier to close down companies that are no longer in use with SSM. It’s important to act quickly, as the moratorium period ends on 30 September 2025.
 
Conclusion
SSM compound reduction initiative offers a valuable opportunity for companies and their directors to resolve past non-compliance regulation at a significant lower cost. This initiative reflects SSM’s commitment to supporting businesses and maintaining high standards of corporate governance.Directors are encouraged to act promptly to take advantage of this incentive before the deadline.

𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years

• 1 July 2025: Construction, Rental, Education, Financial (Phase 1), and Health-related services become subject to SST.
• 1 August 2025: Health-related services – transitional period begins.
• 1 September 2025: Financial Services Phase 2 expansion.

Sector	SST Rate	Registration Threshold
Construction	6%	RM1.5 million/year
Rental/Leasing	8%	RM500,000/year
Education	6%	RM60,000 per student/year
Private Health Services	6%	RM1.5 million/year
Financial Services	8%	RM500,000/year (except card fees)

• Commercial buildings, infrastructure, ports, mixed-use developments
• Facility management during construction

• Pure residential construction
• Federal/State government and local authority projects

• Retention sums: taxable when released
• Liquidated damages (LAD): not taxable
• B2B exemption if subcontractor and contractor are registered
• Transitional rules for ongoing projects

• Commercial property rental, machinery, vehicles
• Import of lease services

• Residential property
• Financial leases, hire-purchase
• Offshore leasing

• B2B exemption (subleasing use)
• Fixed-term or low-value contracts (< RM500k/year)

• Private institutions charging > RM60,000/year per student
• Higher education and language centres serving non-Malaysians

• Malaysian citizens, OKU holders
• Preschool and special needs education
• Short courses (under 3 months/20 hours)

• Services to non-Malaysians in:
  • Private hospitals and clinics (medical, dental, ambulance, etc.)
  • Traditional/complementary medicine (e.g., Malay, Chinese, Indian, chiropractic)
  • Allied health (e.g., physiotherapy, radiography, psychology)

• Services to Malaysian citizens
• Services by public hospitals and exempt university medical centres

• Service tax applies where service is rendered to foreigners
• Location rules: services within/between Designated or Special Areas may be exempt
• Transitional guidance applies for services crossing 1 August 2025

• Loan/credit facilities, Islamic financing
• Insurance and takaful (certain policies)
• Investment advice, fund management, brokerage, underwriting

• Fee-based financial services not explicitly listed

• Interest/profit from loans
• Late payment charges
• Basic banking (ATM, account maintenance)
• Services linked to exports, offshore assets
• Intra-group transactions
• Services to the Government

• Malaysian businesses receiving services from overseas must self-account for tax

1. Review all services provided against SST thresholds
2. Register via MySST if thresholds are exceeded
3. Issue tax invoices with correct tax codes
4. Apply for exemptions (B2B, government, residential, special areas)
5. Comply with transitional rules and maintain proper accounting

📘 Understanding Malaysia’s Dividend Tax: What You Need to Know for 2025
As Malaysia modernizes its tax framework, a new rule has been introduced that will impact investors and shareholders across the board. Starting from the Year of Assessment (YA) 2025, a 2% tax will be imposed on chargeable dividend income that exceeds RM100,000 per individual annually.
While this change represents a shift in tax policy, it’s important to note that not all dividend income will be taxed. In fact, the Inland Revenue Board of Malaysia (IRBM) has outlined a range of exemptions that could significantly reduce — or even eliminate — your liability.
In this article, we break down the new rules, the exemptions, and what you should do to prepare.
📊 Overview: The New Dividend Tax
Effective from YA 2025, individuals (residents and non-residents alike) will be taxed at 2% on dividend income above RM100,000 annually, after deductions and allowances.
This tax is part of Malaysia’s efforts to broaden its revenue base while still encouraging investment through targeted exemptions.
✅ Exemptions from Dividend Tax
The IRBM has made it clear that the following types of dividend income are not subject to the 2% tax:
1. Foreign-Sourced Dividends
Dividends received from foreign sources are exempt, as long as:

• The income has been taxed in the foreign jurisdiction; or
• The receiving entity in Malaysia meets certain economic substance requirements.

This aligns with the latest IRBM guideline titled “Tax Treatment in Relation to Income Received from Abroad” (Amendment, Dec 2022).
2. Pioneer Status or Reinvestment Allowance Companies
Dividends paid out from companies that enjoy pioneer status or are granted reinvestment allowances under the Investment Incentives Act are tax-exempt.
This encourages ongoing investment and industrial development in key sectors.
3. Tax-Exempt Shipping Companies
Dividends from profits of shipping companies that are exempted from income tax will not attract the 2% dividend tax.
4. Cooperative Societies
Dividends distributed by registered cooperatives are fully exempt, consistent with Malaysia’s policy to support cooperative movements.
5. Closed-End Funds
Income declared in the form of dividends by closed-end funds falls outside the scope of the dividend tax.
6. Labuan Entities
Dividends received by Malaysian residents from Labuan entities — governed under the Labuan Business Activity Tax Act — are not taxed.
7. Exemptions at Shareholder Level
Where any specific exemption is granted to a shareholder by the IRBM, that exemption will prevail.
🏦 Institutions Not Subject to Dividend Tax
In addition to the above, dividend tax does not apply to distributions made to contributors and depositors of:

• Kumpulan Wang Simpanan Pekerja (KWSP) – Employees Provident Fund
• Lembaga Tabung Angkatan Tentera (LTAT) – Armed Forces Fund
• Amanah Saham Nasional Bumiputera (ASNB)
• Any approved Unit Trust Fund

This ensures that retirement and savings-focused institutions continue to enjoy tax efficiency.
🕒 When Does This Take Effect?
These changes are effective from the Year of Assessment 2025. If you're an investor or managing dividends, it’s vital to review your investment portfolio and tax planning strategy ahead of time.
📌 What Should You Do Next?
Tax rules are becoming more nuanced — and the difference between being taxed and being exempt could lie in how your income is structured or where it originates from.
Here’s how you can prepare:

• ✅ Identify which dividend sources fall under the exempt categories.
• ✅ Review your investments in shipping, cooperatives, and Labuan-based entities.
• ✅ If you receive foreign dividends, ensure proper documentation and compliance with economic substance rules.

🔍 Conclusion
As the 2025 assessment year approaches, it is crucial for individuals and investors to proactively assess the impact of the new dividend tax. While the 2% levy may seem modest, the cumulative effect could be significant for high-income dividend earners — especially those unaware of potential exemptions.
The good news? With proper planning and a clear understanding of the available exemptions, you can minimize your tax exposure and ensure compliance with confidence.
Whether you're receiving dividends locally or from abroad, taking action now can help preserve your returns and avoid unexpected liabilities.

𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years

AUDIT EXEMPTION
 
Effective from 01^st January 2025 to the Companies Commission of Malaysia (SSM) allows certain private companies to be exempted from the mandatory requirement to have their financial statements audited annually under the Companies Act 2016. This exemption aims to reduce the regulatory burden and compliance costs, especially for small and medium-sized enterprises (SMEs) that may find audits costly and time-consuming relative to their size.
 
What is Audit Exemption?
Audit exemption means eligible private companies do not have to appoint an auditor or conduct an audit of their financial statements for a financial year.
 
However, these companies still need to prepare and lodge their unaudited financial statements with SSM, along with other required documents such as directors’ reports and audit exemption certificates confirming compliance with accounting standards and legal requirements.
 
Eligibility Criteria for Audit Exemption in 2025.
To qualify for audit exemption starting from financial years beginning on or after 01^st January 2025, a private company must meet any two of the following three conditions for the current and preceding two financial years:
 

Criteria	Threshold for Audit Exemption
Annual Turnover	≤ RM3,000,000
Total Assets	≤ RM3,000,000
Number of Employees	Number of Employees   ≤ 30
Dormant Status	Dormant since incorporation or current + prior year

 
Additionally, companies that are dormant since incorporation or dormant throughout the current and preceding financial year also qualify for exemption.
 
Phased Implementation to Facilitate Transition
 
To facilitate the revised framework, SSM has adopted a phased implementation approach over a period of three years, thus allowing companies to adapt gradually to the new requirements.
 
Phase 1 will apply to financial periods commencing on or after 1 January 2025, with submissions starting from 1 January 2026. During this phase, the thresholds are set at annual revenue of RM1,000,000, total assets of RM1,000,000, and a maximum of 10 employees.
 
Phase 2 will follow for financial periods commencing on or after 1 January 2026, with submissions starting from 1 January 2027. In this phase, the thresholds are increased to an annual revenue of RM2,000,000, total assets of RM2,000,000, and a maximum of 20 employees.
 
Finally, Phase 3 will be fully implemented for financial periods commencing on or after 1 January 2027, with submissions starting from 1 January 2028, where the thresholds are fully implemented at a turnover of RM3,000,000, total assets of RM3,000,000, with a maximum of 30 employees.
 
The annual revenue, total assets, and number of employees for the immediate past two financial years must not exceed the maximum threshold specified for the respective corresponding phase.
 
In conclusion, the Audit exemption reduces compliance costs and administrative burden, enabling SMEs to focus resources on growth while maintaining financial accountability through submission of unaudited but compliant financial statements.

 
𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/42XKWsk
Instagram https://bit.ly/42Uqf0e
Linkedin https://bit.ly/3EH885M
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years

Mandatory Requirement for the Company to Display the Company Name and Registration Number
 
In Malaysia, Companies are required by law to display their Company registration number on all official documents. This is enforced by the Companies Commission of Malaysia (SSM) under the Companies Act 2016. Failure to comply with this requirement can result in penalties being imposed by SSM.
 
Legal Requirement Under the Companies Act 2016
According to Section 30(2) of the Companies Act 2016, a Company must include its Company name and registration number on:
* Company’s signboard and all panel displays.
* Business letters, notices, and other official publications, including in electronic form;
* Websites and online communications (eg, Facebook, Instagram, etc);
* Bills of exchange, promissory notes, endorsements, and order form;
* Cheques purporting to be signed by or on behalf of the Company;
* Order invoices, receipts, and letters;
* All other forms of its business correspondence and documentation.
 
The purpose of this rule is to ensure transparency and accountability, allowing customers, partners, and authorities to verify the legitimacy of a business.
 
Penalties for Non-Compliance
If a company fails to include its registration number as required, SSM may impose penalties, which can include:
* Fines: The Company and its officers (directors) can be fined up to RM50,000 under the Companies Act 2016.
* Legal Action: Continued non-compliance may lead to further enforcement actions, including potential legal proceedings.
 
SSM actively monitors compliance and may conduct audits or inspections to ensure that businesses adhere to these regulations.
 
How to Ensure Compliance
To avoid penalties, the Company should:

1. Review Business Documents

Ensure that all business letters, invoices, and statements contain the company name and registration number

2. Update Online Platforms

If your company has a website, social media pages, or online business presence, the registration number should be visible.

3. Train Employees

Staff handling correspondence and document preparation should be aware of this requirement to prevent accidental omissions.

4. Regularly Check Compliance

Conduct periodic internal reviews to ensure all materials remain compliant with SSM regulations.
 
Conclusion
 
Displaying the company registration number is a simple yet essential requirement for all Companies in Malaysia. It reinforces business credibility and ensures compliance with legal obligations under the Companies Act 2016. Companies should take proactive steps to ensure all official communications include this information to avoid unnecessary fines or legal consequences.

𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs
Instagram http://bit.ly/3Rkw6hP
Linkedin http://bit.ly/3sapf5l
 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years

Starting 1 December 2024, a new chapter in corporate reporting begins in Malaysia with the mandatory implementation of MBRS 2.0. The enhanced system by the Companies Commission of Malaysia (SSM) requires all companies to file their annual financial statements digitally using the eXtensible Business Reporting Language (XBRL) format.
 
What is MBRS 2.0?
MBRS 2.0 is a digital platform designed to streamline the submission of financial statements, annual returns, and exemption applications. The XBRL format facilitates the structured tagging of financial data, making data analysis and comparison more efficient.
 
Types of Submissions under MBRS 2.0
MBRS 2.0 mandates the submission of the following documents in XBRL format:

1. Annual Returns (AR):
   • Effective Date: 25 September 2024
   • Description: Companies are required to file their annual returns electronically through the MBRS platform.
2. Financial Statements and Reports (FS):
3. Phase 1:
   • Effective Date: 1 December 2024
   • Description: Unaudited financial statements under Companies Act, 2016; Financial Statement for Exempt Private Company (FS-EPC) under Companies Act, 2016; Application for extension of time (EOT) Application & Submission of Court Order Rectification for Unaudited Financial Statement under Companies Act, 2016.
4. Phase 2:
5. Effective Date: 1 March 2025
6. Description: Financial Statements under Companies Act, 1965; Certificate for Exempt Private Company (Section 260) under Companies Act, 1965; Financial Statement regulated by Bank Negara Malaysia under Companies Act, 1965 & 2016. Application & Submission of Court Order Rectification for Audited Financial Statement under Companies Act, 1965.
7. Effective Date: 1 June 2025
8. Description: Audited financial statements for all companies under the Companies Act 2016; Application & Submission of Court Order Rectification for Audited Financial Statement under Companies Act, 2016.
9. Phase 3:

 
Important Points to Note:

• Digital Submission: All submissions must be made electronically through the MBRS platform.
• XBRL Format: Financial statements require conversion into XBRL format using the MBRS Preparation Tool (mTool).
• Compliance is Crucial: Compliance with all MBRS 2.0 regulations is essential, as penalties may be imposed for any non-compliance.''

Embrace the Future of Corporate Reporting
MBRS 2.0 represents a significant step towards modernizing corporate reporting in Malaysia. By embracing this new system, businesses can streamline their reporting processes, enhance data accuracy, and improve transparency.

𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs
Instagram http://bit.ly/3Rkw6hP
Linkedin http://bit.ly/3sapf5l

 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o

What is CP58?
CP58 is a tax form issued by Lembaga Hasil Dalam Negeri (LHDN), Malaysia’s Inland Revenue Board. It is used by businesses to declare commission payments made to agents, dealers, or distributors.

Who Needs to Issue CP58?
Any company that pays commissions exceeding RM5,000 annually to an agent, dealer, or distributor is required to issue a CP58 form. Even if the amount is below RM5,000, businesses may choose to issue it voluntarily.

Why is CP58 Important?

1. Tax Compliance – Ensures LHDN can track commission income.
2. Income Declaration – Helps recipients report income in their tax returns.

What Information Does CP58 Contain?

• Payer details – Company name, tax reference, and address.
• Recipient details – Name, NRIC/Company No., and address.
• Commission details – Amount paid, including incentives, bonuses, or rewards.

When Should CP58 Be Issued?
Companies must issue CP58 by 31st March of the following year for commissions paid in the previous year.

Are Recipients Required to Pay Tax on CP58?
Yes, recipients must report the commission income in their personal or business tax filings.

Consequences of Not Issuing CP58
While there is no direct penalty for failing to issue CP58, businesses may face compliance risks under the Income Tax Act 1967, including:

• Failure to Report Commission Payments – May result in additional taxes, penalties, or an audit.
• Failure to Maintain Proper Records – Businesses must retain records for 7 years under Section 82A. Incomplete records may lead to fines.
• Recipient’s Non-Declaration of Income – Agents, dealers, or distributors who fail to declare CP58 income may face penalties for under-reporting.

By ensuring proper issuance of CP58, businesses can remain compliant with tax regulations and avoid unnecessary risks. For any further assistance, feel free to contact us!

𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs
Instagram http://bit.ly/3Rkw6hP
Linkedin http://bit.ly/3sapf5l

 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o

Aligned with the strategy and support for the reform agenda to strengthen government governance and the corporate sector ecosystem, the Companies Commission of Malaysia (SSM), has begun phased enforcement of the Limited Liability Partnerships (Amendment) Act 2024 effective from 31 January 2025.

The Act will be enforced in stages starting from 31/01/2025, by the SSM. It will be carried out in 3 phases.
What will be the Key Changes with the Amendment Act 2024?

Key Changes:

1. Beneficial Ownership: The Act sets out new requirements for reporting and disclosing information about the beneficial owners of Limited Liability Partnerships (LLPs). According to Sections 2, 3, 4, 5, Sub-Section 11(a), and Section 13, LLPs are required to identify and record their true owners.
2. Corporate Rescue Mechanisms: New frameworks and provisions related to procedures to support the implementation of sustainable LLP governance under Sections 8, 9, 10 and Sub-Section 11 (b).
3. Sustainable Governance: The amendment strengthens procedures to ensure better governance and sustainability within LLPs as stated in Sections 6, 7, and 12.

3 Phases Implementation:
Phase 1 – Following the implementation of the Limited Liability Partnerships (Amendment) Act 2024, all LLPs are granted a 3-month grace period from 01 February 2025 to 30 April 2025 to identify their beneficial owners and record the beneficiary ownership details at the LLP's registered office. From 01 May 2025 to 31 October 2025, LLPs must submit the beneficial ownership information to SSM. During this period, SSM will waive any late fees and correction charges, and no enforcement action will be taken.
Phase 2 – Aim to establish procedures that support sustainable LLP governance, with implementation expected by 31 March 2025.
Phase 3 - It involves provisions related to the corporate rescue mechanism, which is expected to be enforced by 31 December 2025
The implementation of the Limited Liability Partnerships (Amendment) Act 2024 aims to reduce liability for partners in traditional partnerships, while also enhancing transparency, governance, and support for businesses, and minimizing risks and liabilities for LLPs partners.
 
LLPs are required to identify and obtain information on beneficial owners, and if an individual is aware that they are a beneficial owner, they have the obligation to inform the LLP, and vice versa.

𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs
Instagram http://bit.ly/3Rkw6hP
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𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
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𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
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(Tax Update) Unlocking the Johor-Singapore Special Economic Zone (JS-SEZ): Tax Incentives Package from MIDA

What is JS-SEZ?

Johor is set to become a thriving economic hub with the newly established Johor-Singapore Special Economic Zone (JS-SEZ). This initiative, born out of a collaboration between Malaysia and Singapore, aims to attract businesses and investors by offering an attractive package of tax incentives and business-friendly policies.

With the Malaysian Government officially announcing the JS-SEZ tax incentive package on 8 January 2025, many businesses are keen to understand how they can benefit from these incentives. If you’re planning to invest in Johor, this is the perfect time to explore what JS-SEZ has to offer.

Who Can Apply?

The application period for tax incentives runs from 1 January 2025 to 31 December 2034, and companies must submit their applications to the Malaysian Investment Development Authority (MIDA) via MIDA's online platform.

But what exactly are these incentives? Let’s break them down into key categories.

Manufacturing Tax Incentives

Manufacturing companies investing in JS-SEZ will enjoy significant tax advantages, particularly in sectors like AI and Quantum Computing, Medical Devices, Pharmaceuticals, and Aerospace Manufacturing.

Here’s what’s in store for investors:

• New Companies

  • Companies investing more than RM1 billion: 5% tax rate for 15 years

  • Companies investing between RM500 million to RM1 billion: 5% tax rate for 10 years

• Existing Companies

  • Companies investing above RM500 million in a new business segment (not an expansion) will receive an Investment Tax Allowance (ITA) of 100% on qualifying capital investment for 5 years, offset against 100% of statutory income.

Key Investment Zones:

• Kulai-Sedenak (AI & Quantum Computing, Medical Devices, Pharmaceuticals)

• Senai-Skudai (Aerospace Manufacturing & MRO Services)

Global Services Hub: A Tax-Friendly Base for Regional Expansion

Businesses engaged in strategic business planning, corporate development, regional P&L, and global treasury operations can benefit from a 5% special tax rate for up to 15 years.

Eligibility Criteria:

• Annual operating expenditure of at least RM50 million

• Business control over at least 10 network companies

• Minimum annual sales turnover of RM500 million, with foreign exchange inflows into the Malaysian banking system

• At least 50% of high-value positions (minimum RM10,000 salary) must be filled by Malaysians

Key Investment Zones:

• Johor Bahru Waterfront (Flagship A)

• Iskandar Puteri (Flagship B)

Integrated Tourism Projects: A Boost for Johor’s Hospitality & Attractions

For those venturing into tourism, the JS-SEZ provides an Investment Tax Allowance (ITA) of 100% for qualifying capital expenditure incurred within five years, which can be offset against 70% of statutory income each year.

Additionally, companies making cash or in-kind contributions to hallmark events within JS-SEZ can enjoy a tax deduction of up to RM1 million per year.

Eligibility Criteria:

• The company must not have an existing tourism-related entity in Malaysia

• Minimum RM2.5 million paid-up capital

• Minimum RM500 million investment (excluding land)

• Development must include a hotel with at least 80 rooms and one major tourist attraction (e.g., water park, convention centre, outdoor sports facility)

Key Investment Zones:

• Desaru-Penawar (Flagship G)

Smart Logistics: Investing in the Future of Supply Chains

Businesses investing in smart logistics—such as regional distribution hubs, integrated logistics services, cold chain facilities, and dangerous goods storage—will benefit from Investment Tax Allowance (ITA) of 100% on qualifying capital investment within five years, offset against 100% of statutory income.

Eligibility Criteria:

• Minimum RM500 million investment (excluding land)

• Smart warehouse complex of at least 50,000 m²

• Compliance with Industrial Building System (IBS) standards set by CIDB

• 80% of the workforce must be Malaysians

• 30% of high-value positions (earning RM10,000+) must be filled by Malaysians

Key Investment Zones:

• Tanjung Pelepas (Flagship C)

Downstream Specialty Chemicals: Special Tax Rates for High Capital Investments

Companies investing in specialty chemicals, polymers, fertilizers, and oleochemicals can benefit from a 5% or 10% tax rate for up to 10 years, depending on investment size.

Alternatively, they may opt for an ITA of 100% on qualifying capital investment within five years, offset against 100% of statutory income.

Eligibility Criteria:

• Investment of at least RM500 million (excluding land)

• Companies must be either new or diversifying into eligible activities

• Minimum RM2.5 million paid-up capital

Key Investment Zones:

• Tanjung Langsat-Kong Kong (Flagship D)

Expanded Renovation Cost Incentive

Qualifying businesses operating within JS-SEZ can claim Accelerated Capital Allowance (ACA) for renovation costs, covering:

• Electrical, gas, and water systems

• Kitchen and sanitary fittings

• Flooring, partitions, and ceilings

• Air-conditioning systems

• Employee facilities (e.g., daycare centres, recreation rooms, surau)

• Smart solutions and green elements

This incentive is applicable once throughout the business operation in JS-SEZ.

Conclusion: A Golden Opportunity for Investors

The Johor-Singapore Special Economic Zone (JS-SEZ) is an unprecedented opportunity for businesses looking to expand in Malaysia. With tax incentives spanning manufacturing, logistics, tourism, and global services, the region is set to become a premier investment hub.

Companies looking to capitalize on these incentives should act quickly and submit applications before the 31 December 2034 deadline.

For further assistance, visit MIDA’s website or contact Invest Malaysia Facilitation Centre Johor (IMFC-J) at IMFC-J’s website.

Stay tuned for more updates from KTP as we continue to guide businesses in navigating Malaysia’s tax landscape!

A bonus share, also known as a scrip issue or capitalization issue, is a free additional share given to existing shareholders in proportion to their current holdings. Instead of paying dividends in cash, the company issues additional shares. This process does not involve any new capital from shareholders; it merely capitalizes a portion of the company's retained earnings or reserves, converting them into share capital.
 
Key Characteristics of Bonus Shares:

1. Proportional Allocation:
   • Bonus shares are allotted to existing shareholders based on a specific ratio (e.g., 1 bonus share for every 2 existing shares).
2. No Additional Cost:
3. Shareholders do not pay any extra money for the bonus shares. They receive them for free, proportionate to their current shareholding.
4. The issuance of bonus shares involves converting the company's reserves (such as retained earnings, share premium account, or capital redemption reserve) into share capital.
5. The total share capital of the company increases, but the overall value of the shareholders' investment remains the same because the market price of the shares typically adjusts downward to reflect the increased number of shares.
6. The increase in the number of shares can improve the liquidity of the company's shares in the stock market, making it easier for shareholders to buy and sell.
7. Capitalization of Reserves:
8. Increase in Share Capital:
9. Enhanced Liquidity:

Example
If a shareholder owns 100 shares of a company, and the company declares a 1:1 bonus issue, the shareholder will receive an additional 100 shares, resulting in a total holding of 200 shares. However, the market price of each share may be adjusted accordingly to reflect the increased number of shares in circulation.
 
Purpose of Issuing Bonus Shares

1. Reward Shareholders:
   • Bonus shares serve as a reward to shareholders by giving them additional shares without cost, effectively increasing their investment.
2. Signal of Confidence:
3. Issuing bonus shares can signal the company's confidence in its future profitability and financial stability.
4. By increasing the number of shares outstanding, the company can enhance the marketability and trading volume of its shares.
5. For shareholders, receiving bonus shares can be more tax-efficient compared to receiving cash dividends, depending on the tax regulations in their jurisdiction.
6. Improving Market Liquidity:
7. Tax Efficiency:

In summary, bonus shares are an effective way for companies to reward shareholders, increase the equity base, and improve stock liquidity without affecting the shareholders' proportionate ownership.

𝐕𝐢𝐬𝐢𝐭 𝐮𝐬
Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru
 
𝐓𝐇𝐊 (𝐒𝐞𝐜𝐫𝐞𝐭𝐚𝐫𝐢𝐚𝐥, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭/𝐏𝐚𝐲𝐫𝐨𝐥𝐥, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
A licensed secretarial firm in Johor Bahru providing fast reliable incorporation, secretarial services, corporate compliance services, outsource booking, accounting and payroll services to clients
Website www.thks.com.my
Facebook https://bit.ly/3nQ98rs
Instagram http://bit.ly/3Rkw6hP
Linkedin http://bit.ly/3sapf5l

 
𝐊𝐓𝐏 (𝐀𝐮𝐝𝐢𝐭,𝐓𝐚𝐱, 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲)
An approved audit firm and licensed tax firm operating under the KTP group based in Johor Bahru providing audit, tax planning, advisory and compliance services to clients
Website www.ktp.com.my
Instagram https://bit.ly/3Rko5kN
Linkedin https://bit.ly/3sapf4l
Telegram http://bit.ly/3ptmlpn
 
𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞
An internal community for our colleagues on work and leisure.
Tiktok http://bit.ly/3u9LR6Q
Youtube http://bit.ly/3ppmjyE
Facebook http://bit.ly/3ateoMz
Instagram https://bit.ly/3jZpKLo
 
𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫
An external job community on vacancy in Johor Bahru for interns, graduates & experienced candidates.
Instagram https://bit.ly/3u2PxHg
Facebook http://bit.ly/3rPxz9o
 
#KTP #Thk
#Myktp
#ktplifestyle
#ktpcareer
#24years