Does new Company need to pay income tax?

Many of our clients has asked us this question after they have successfully registered their new company: Are they required to pay any income tax for new company?

The answer is NO!

You do not need to pay income tax for registering new company! The company will only need to pay income tax if they are making profit from the sales that generated by the company.

The tax requirements for new company are as follows:

  1. A company is required to furnish tax estimation (Form CP204) for the coming year to Inland Revenue Board (Income Tax Department or LHDN) within the first 3 months after the company has generated first sale!
  2. A company with paid-up capital less than RM2.5 Million is required to submit Form CP204 within the first year.
  3. A company will need to pay tax instalment payments to LHDN every month if a company forecast a profit in coming year’s operations.
  4. A company is required to submit Income Tax Return (Form C) to IRB within 7 months from the company’s financial year end.
  5. A company will need to settle all unpaid tax (after calculating & computing the actual tax amount) within 7 months after the company’s year end.

Ultimate tax rules

If your company is making profit, then you will need to pay company’s income tax!

Even your company is suffering loss, you may still need to pay company’s income tax! Check it out with your tax agent for this!

Can directors submit company’s tax themselves?

A very small number of our clients have requested to submit their income tax return by themselves without engaging the service of licensed tax agent (to save tax agent’s fee, ranging from 1k to 2k).

We do normally not encourage them to do so as they will find themselves paying more tax (penalty) for non-compliance of income tax rulings, of which can be easily sum up to thousands, include the following:

  1. Incorrect tax return (Form C) submitted
  2. Incorrect tax computation for calculation of tax payable
  3. Failure to submit CP204 & CP204A (if any)
  4. Failure to make instalment payment timely
  5. Failure to comply Income Tax Public Rulings

Each of the failure and offence can be fined from at least RM200 to RM2,000.

For more information, we welcome you to contact our tax department at 03-7729 7018.

Register New Sdn Bhd Company at RM1,060 only! Call us now!