Tax Alerts & Publications

The Ministry of Finance announced updated Service Tax policies on 5 January 2026. 

The principal changes are as follows. 

1. Service tax on rental and leasing services is effective at a reduced rate of 6% from 1 January 2026, down from 8%. 

2. The annual sales or turnover threshold for MSME tenants exempt from paying service tax on rental or leasing services has been increased from RM1.0 million to RM1.5 million, and newly registered MSMEs will be exempt from service tax on rental or leasing services for one year from their registration date. 

3. The service tax exemption for construction work services under non‑reviewable contracts signed before 1 July 2025 has been extended by one year to 30 June 2027, making the total exemption period two years. 

4. Construction work services for religious buildings such as suraus, mosques, temples, churches and shrines are exempt from service tax starting 1 July 2025.

These changes may affect invoicing, contract pricing and tax accounting. Businesses that charge or pay service tax on rental, leasing or construction services should update their billing systems and review tenant classifications to determine whether the new MSME thresholds or the one‑year start‑up exemption apply. 

For construction contractors and project owners, confirm whether contracts fall within the extended exemption window or qualify as religious building works exempt from service tax.

We expect the Royal Malaysian Customs Department to issue updated SST guidance and technical clarifications to reflect the MOF announcement. Until those clarifications are published, businesses should document their commercial position and retain supporting evidence such as MSME registration records, contract signing dates and invoices.

The Inland Revenue Board of Malaysia (LHDN) has published guidance clarifying how income earned by social media influencers is treated for tax purposes. The guidance recognises influencer activity as a legitimate source of income and explains the types of receipts that may arise, how such income is taxed, which expenses may be deductible, and the record‑keeping and instalment obligations influencers must meet. 

The following sections summarise and expand on the guidance, with practical notes and examples to help influencers and their advisers comply with Malaysian tax rules.

1. Activities, categories and types of income of influencers

Activities that constitute influencer work

An individual is considered to be carrying out influencer activities when they regularly produce, publish or display content on social or digital media, or otherwise use their online presence to influence an audience. Typical activities include:-

• Producing and publishing audio, video or written content for social media platforms.  

• Appearing in online programmes, livestreams, webinars or other social media events.  

• Promoting or advertising products, services or brands on social media.  

• Receiving payments, gifts, benefits or other consideration in return for social media activity.

Categories of influencers

The guidance distinguishes two broad categories:-

1. Individual influencers: Natural persons who create content or promote products and services. This group includes a wide range of people such as artists, athletes, professionals, hobbyists, students, homemakers and other individuals who monetise their social media presence. Content creators who build an audience and monetise that audience fall into this category.

2. Object‑based influencers: Non‑human accounts or characters that have been created and managed by a person or company. Examples include animated characters, mascots, fictional characters or branded accounts (for example, a cartoon character’s official social media account). Income generated by an object‑based influencer is taxable to the owner of the account or the entity that receives the income.

Types of receipts and how they arise

Influencers may receive income in many forms. The guidance lists common receipt types and explains that both cash and non‑cash receipts are taxable when they arise from influencer activities:-

• Direct platform payments: Payments from social media platforms for views, clicks, ad revenue shares, subscriptions, tips or other platform monetisation features. These payments are treated as business income when the influencer’s activities constitute a profession or trade.

• Ambassador, sponsorship and paid promotion fees: Payments from companies or marketing agencies for product endorsements, sponsored posts, paid reviews, or ambassador roles. These may be paid in cash or in kind (for example, free products, vouchers or services).

• Sale of goods and digital products: Income from selling physical goods, branded merchandise, digital products (e‑books, courses, music) or services directly through social media channels.

• Sale of social media accounts: Proceeds from selling an influencer account or social media ID to another party.

• Royalties: Payments for the use of an influencer’s character, image or intellectual property by third parties (for example, licensing a character for merchandising or theme‑park use).

• Other receipts: Fees for speaking engagements, training, judging competitions, event appearances, or other services related to the influencer’s expertise. Non‑monetary benefits that have monetary value (gifts, discounts, free services) are also taxable.

Practical note:

All receipts that arise from influencer activities should be recorded and reported. Non‑cash benefits must be valued and included in taxable income where they are received in connection with the influencer’s activities.

2. Scope of taxation

Income tax is charged on income accrued in or derived from Malaysia, or received in Malaysia from outside Malaysia. The guidance clarifies the following points:-

• Resident influencers: Income derived from influencer activities is generally treated as business income and is taxable in Malaysia if the influencer is resident in Malaysia, regardless of whether the payer or platform is based overseas. This includes payments from foreign platforms such as global social media operators when the influencer performs the activities in Malaysia.

• Non‑resident influencers: Non‑residents who perform influencer activities in Malaysia or who have a permanent establishment in Malaysia may be taxable on income derived from those activities in Malaysia.

• Cross‑border payments: Payments credited from overseas platforms or companies are generally deemed to be derived in Malaysia if the influencer carries out the activities in Malaysia. The guidance therefore treats such receipts as taxable in Malaysia for resident influencers.

• An influencer resident in Malaysia who receives ad revenue from an overseas platform is taxable in Malaysia on that revenue because the influencer’s activities are performed in Malaysia.  
• An influencer who films content overseas but is resident in Malaysia and uses that content to promote products to a Malaysian audience will generally be taxed in Malaysia on the income because the influencer’s profession is carried out from Malaysia.

Practical note: 

Influencers should determine their tax residency status and treat income from both local and foreign sources as potentially taxable in Malaysia. Where activities are performed partly overseas, careful analysis is needed to determine the source of income and any double taxation relief that may apply.

3. Tax treatment of income received

The guidance treats income from influencer activities as income from a profession or business and therefore taxable under the relevant provisions of the Income Tax Act 1967. The key points are:-

• Paragraph 4(a) income (business/professional income): Most receipts from influencer activities, incluidng platform payments, sponsorships, paid promotions, sales of goods, royalties and fees for services, are treated as business or professional income under paragraph 4(a) of the ITA.

• Employment income: If an influencer receives salary or employment remuneration from an employer (for example, a company that employs the influencer), that portion of income is treated as employment income under paragraph 4(b) and subject to scheduled tax deductions where applicable.

Specific treatment of common receipt types

• Platform payments and ad revenue: Treated as business income. Influencers should report platform receipts in their tax returns and may need to account for foreign currency receipts and withholding tax implications where applicable.

• Sponsorships and ambassador fees: Treated as business income. Non‑cash sponsorships (products, services, vouchers) must be valued and included in taxable income.

• Sale of goods and digital products: Income from sales is business income. Cost of goods sold and related expenses may be deductible where they meet the usual tests for allowable deductions.

• Royalties: Royalties for use of characters or intellectual property are taxable as business income to the recipient. If royalties are paid to non‑residents, withholding tax rules may apply.

• Sale of social media accounts: Proceeds from the sale of an account are taxable; the tax treatment depends on whether the sale is part of a business activity or a capital transaction. Frequent trading or sales as part of a business will be treated as business income.

Valuation of non‑cash receipts

Non‑cash benefits received in connection with influencer activities (for example, free products, services, vouchers) must be valued at their market value and included in taxable income. Influencers should keep records to support valuations.

• An influencer receives RM10,000 cash for a sponsored post and a RM2,000 product sample. Both amounts are taxable; the product is valued at RM2,000 and included in income.  
• An influencer sells branded merchandise and reports gross sales less allowable costs to determine taxable profit.

Practical note:

Influencers should separate income that is employment‑related from income that arises from independent influencer activities. Where both types exist, each must be reported under the correct tax classification.

4. Allowable expenses

Expenses that are wholly and exclusively incurred in the production of gross income from influencer activities are generally deductible under subsection 33(1) of the Income Tax Act 1967. Personal or capital expenses are not deductible.

Influencers may claim deductions for expenses that meet the “wholly and exclusively” test. Typical deductible items include:-

• Internet and data costs: Monthly internet subscriptions, mobile data plans and related connectivity costs used for content production and distribution.  

• Content production costs: Costs of filming, editing, graphic design, software subscriptions for editing tools, camera and lighting hire, studio rental and other direct production expenses.  

• Marketing and promotion: Fees paid to marketing agencies, paid advertising to promote content, and costs of running paid campaigns.  

• Professional fees: Fees for accountants, legal advice or consultants engaged to support the influencer’s business activities.  

• Delivery and fulfilment costs: Shipping and handling costs for merchandise sold to followers.  

• Event and travel costs: Travel, accommodation and event fees incurred to produce content or attend paid engagements, where these are directly related to income generation.  

• Office and administrative costs: A proportion of home office expenses, stationery, subscriptions and other administrative costs that are directly attributable to the influencer business.

• Capital allowances and capital expenditure: Expenditure on capital items (for example, cameras, computers, studio equipment) is not deductible as an expense but may qualify for capital allowances under Schedule 3 of the ITA. Influencers should claim capital allowances where eligible and keep invoices and asset records.

Non‑allowable expenses

• Personal living expenses and costs not incurred wholly and exclusively for the influencer activity are not deductible.  

• Capital expenditure is not deductible as an expense (but may qualify for capital allowances).  

• Fines, penalties and certain entertainment expenses may be disallowed or restricted.

Record keeping to support deductions

Influencers must keep accurate records and supporting documents for all claimed expenses. Records should show the business purpose of each expense and be retained for seven years from the end of the year of assessment.

Practical note:

When in doubt about whether an expense is wholly and exclusively for the influencer activity, document the business purpose and consult a tax adviser. Reasonable apportionment may be required where expenses have both personal and business elements.

5. Brief summary of tax responsibilities

Influencers should be aware of the following ongoing tax responsibilities:

• Registration and tax filing: Ensure you are registered with LHDN and file the appropriate tax returns for each year of assessment. Income from influencer activities must be declared in the correct tax return category.

• Estimated tax instalments (CP500 / CP204 / CP500 notices): Individuals and non‑company taxpayers with non‑employment income may be required to make estimated tax instalments under section 107B (CP500). Instalment amounts are generally based on prior year tax and must be paid by the due dates.

• Record keeping: Maintain records of all income and expenses, including invoices, receipts, contracts, platform statements and bank records. Records must be kept for seven years.

• Valuation of non‑cash receipts: Record and value non‑cash benefits received from sponsors or platforms and include their market value in taxable income.

• Withholding tax and cross‑border issues: Be aware of withholding tax obligations where payments are made to or from non‑residents. Seek advice on double taxation relief where applicable.

• Compliance with platform and contractual obligations: Ensure contracts with brands, agencies and platforms are documented and that payment terms and responsibilities are clear.

Practical checklist for influencers

• Register with LHDN if you have taxable influencer income.  

• Keep a separate business bank account where possible to simplify record keeping.  

• Track all platform statements and sponsorship agreements.  

• Value and record non‑cash benefits.  

• Estimate tax liabilities and make instalment payments on time.  

• Retain records for seven years.

How HKP Solutions can help

We can support influencers and content creators with practical tax and accounting services tailored to digital‑first businesses. We help you classify and report income correctly, value non‑cash benefits, and meet instalment and record‑keeping obligations. We also provide full accounting and bookkeeping services so your financial records are organised, audit‑ready and easy to use for tax reporting.

In this update, we have summarised the key Malaysian tax and compliance developments that are relevant to businesses and individuals, with practical implications for SMEs and entrepreneurs. 

Read the summary and action points below to prioritise what to do next:-

1. e‑Invoice implementation updates

2. Online extension of time (e‑Lanjutan Masa)

3. Accelerated capital allowance for speed limitation devices

4. Capital gains tax exemption for group restructuring

5. Stamping via e‑Duti Setem (e‑DS / SDSAS)

For more details, refer to the January 2026 update

The Inland Revenue Board (IRB) has replaced the legacy STAMPS portal with a new e‑Duti Setem system. This change affects how companies, law firms and authorised agents interact with stamp duty services online, and it has practical implications for access, document handling and ongoing adjudications. 

What changed and why it matters

The STAMPS portal has been retired and its functions migrated to the e‑Duti Setem system, which is accessed through the national MyTax portal. The new arrangement centralises stamp duty services under the MyTax authentication framework and replaces the older “blanket” user ID and password approach with individualised access tied to personal MyTax credentials. 

For organisations that previously relied on shared credentials, this is a material change: access is now linked to individual user accounts and to any agent roles that have been formally granted by a company or law firm.

This matters because stamp duty administration touches many routine commercial processes, from contract execution, property transactions, employment agreements and other stamped instruments. Any change to how documents are submitted, paid for and retained can create operational friction if it is not anticipated and planned for. The migration also affects how ongoing adjudications and appeals are accessed and managed, and it changes the mechanics of who can act on behalf of an organisation online.

How users access e‑Duti Setem through MyTax

Under the new arrangement, users access e‑Duti Setem via their personal MyTax account. The pathway within MyTax is to navigate to the ezHasil services menu, select the Duti Setem option and then enter the e‑Duti Setem module. This means that every individual who needs to use the stamp duty service must have a MyTax login that is active and linked to the appropriate organisational role.

Organisations that require third‑party or delegated access can continue to operate through an agent model, but the agent relationship must be established within the MyTax framework. Where a company or law firm has registered a person as an authorised agent, that person will be able to select an Ejen role after logging in and will then see the e‑Duti Setem functions available to agents. The agent model preserves the ability for authorised representatives to act on behalf of clients, but it does so within the MyTax authentication and role management system rather than through a shared credential.

Ongoing adjudications and appeals

A key operational concern for many users is whether existing adjudications, appeals and in‑progress matters will be affected by the migration. The transition preserves access to ongoing matters: adjudications and appeals that were filed under the STAMPS portal remain available in the new e‑Duti Setem environment. This continuity means that users can continue to view and manage existing cases without needing to re‑file or re‑register those matters solely because of the system change.

That continuity reduces the immediate administrative burden, but it does not remove the need to confirm access rights and to ensure that the correct individuals within an organisation have the appropriate MyTax roles. Organisations should verify that the people who need to work on outstanding adjudications can log in and see the relevant case records in e‑Duti Setem.

Access model changes and practical implications

The most significant procedural change is the removal of the previous “blanket” user ID and password approach. Under the new model, access is personal and role‑based. This has several practical implications for organisations:-

1. User management: Companies and law firms must manage MyTax user assignments and agent authorisations centrally so that the right people have access when they need it.  

2. Audit trail and accountability: Personalised access improves traceability because actions are linked to individual MyTax accounts rather than to a shared credential. This is beneficial for governance but requires organisations to maintain accurate user records and to promptly update access when staff change roles.  

3. Onboarding and delegation: Where external advisers or in‑house staff act as agents, the agent registration process must be completed so those individuals can select the Ejen role and access e‑Duti Setem. Organisations should confirm who is registered as an agent and whether any additional registrations are required.  

4. Operational timing: Standard registrations for agent access are typically quick, but some cases may require additional verification and can take longer. Organisations should therefore allow for a short lead time when assigning new users or agents.

System performance and transactional considerations

During the initial migration period, users may experience slower loading times or intermittent performance issues in the e‑Duti Setem system. Slower response times can affect the speed at which adjudications are filed, payments are processed and documents are stamped. For transactions that are time‑sensitive, this can create operational pressure.

Because of potential performance variability, organisations should plan for slightly longer processing times when interacting with the system and avoid last‑minute filings where possible. Where there are outstanding adjudication requests or stamp duty payments, it is prudent to allow extra time for completion and to retain proof of submission and payment receipts in case follow‑up is required.

Practical checklist for organisations

To reduce disruption and maintain continuity of operations, organisations should consider the following practical checklist:-

1. Confirm MyTax coverage: Ensure that all relevant staff and authorised agents who need access to stamp duty services have active MyTax accounts and that those accounts are linked to the appropriate organisational roles.  

2. Verify agent registrations: For companies that use authorised agents, confirm that the agent registrations are in place and that agents can select the Ejen role after login.  

3. Inventory stamped instruments: Maintain a register of stamped documents and reconcile it to executed contracts so that any unstamped instruments are identified and addressed.  

4. Retain evidence: Keep copies of submission confirmations, payment receipts and any validation responses from e‑Duti Setem as part of your contract and tax records.  

5. Allow processing time: Build a buffer into timelines for adjudications and payments to allow for slower system performance during the transition period.  

6. Review internal controls: Update SOPs to reflect the new access model and to ensure that user assignments, agent authorisations and stamping responsibilities are clearly documented and periodically reviewed.

2026 represents a clear shift from policy announcements to active enforcement across multiple areas that directly affect accounting, tax reporting and business controls. For small and medium enterprises (SMEs) and entrepreneurs, this means routine processes such as invoicing, contract stamping, SST reporting, payroll forecasting and record retention must be accurate, auditable and supported by reliable system logs. 

The remainder of this post explains each material change in practical terms, why it matters to an SME, the accounting and cashflow implications, the controls and documentation you should have in place, and immediate actions you can take to reduce risk.

E‑Invoicing Expansion (Phase 4): What it Requires and Why it Matters

From 1 January 2026, the e‑invoicing programme expands to include many more SMEs. 

An “e‑invoice” is not a PDF or an image of an invoice; it is a structured, machine‑readable record that contains standardised fields such as seller and buyer identifiers, invoice number, invoice date and time, line‑level descriptions, quantities, unit prices, tax classification codes and totals. Tax authorities will use these structured fields to perform automated validation and cross‑checks.

For accounting teams, the practical implication is that billing and accounting systems must be able to produce or accept structured invoice data. If your business currently issues invoices as free‑format PDFs, you will need to adopt one of the accepted issuance routes: the tax authority’s portal for low volumes, direct API integration from your ERP or accounting software, or an accredited middleware provider that converts your existing invoice format into the required schema. Implementing e‑invoicing therefore requires mapping your invoice fields to the official schema, capturing validation responses (success, warnings, errors) and storing those responses with the invoice record for audit purposes.

Operationally, e‑invoicing changes the timing and control points of the revenue cycle. You must ensure invoices are issued at the correct invoicing event, that tax codes are applied consistently at source, and that any cancelled or amended invoices are handled according to the validation rules. From a cashflow perspective, e‑invoicing can improve receivable visibility and speed reconciliation, but it also introduces implementation costs and potential short‑term disruption while mappings and exception handling are refined.

To reduce risk, maintain a clear audit trail for each invoice: the original invoice data, the validation response, any corrected or cancelled invoice records, and proof of transmission. Reconcile e‑invoice outputs to your sales ledger and indirect tax returns monthly so mismatches are detected early and corrected before they escalate into enquiries or adjustments.

Stamp Duty Self‑Assessment: New Responsibilities and Retrospective Risk

The stamp duty regime is moving further toward taxpayer self‑assessment. Under self‑assessment, the taxpayer is responsible for determining whether stamp duty applies to a document, calculating the duty, paying it within the prescribed period and retaining stamped evidence. This change places primary responsibility on businesses to get stamping right at the time of contract execution.

For accounting and legal teams, the practical consequence is that many commercial documents that were previously handled informally now require a stamping workflow. Unstamped or incorrectly stamped documents can be subject to retrospective assessments and penalties, and in some cases may be less readily enforceable in court. From an accounting perspective, unstamped instruments create a contingent liability: if a retrospective assessment is raised, the business may face an unexpected cash outflow and penalties that should be considered in cashflow forecasts and provisions.

To manage this risk, implement a stamping checklist as part of contract execution. The checklist should identify stampable instruments (for example, certain sale and purchase agreements, leases and employment contracts), calculate duty under the self‑assessment rules, ensure duty is paid promptly and retain stamped copies indexed by contract number and date. Maintain a register of stamped instruments and reconcile executed contracts to stamped records periodically. Where historical contracts exist that were not stamped, perform a retrospective review and remediate as appropriate to reduce exposure to future assessments.

SST Enforcement and Cross‑Checks with E‑Invoices: Higher Audit Exposure

Tax authorities are increasingly using validated e‑invoice data to cross‑check sales and indirect tax returns. Where e‑invoice records do not reconcile to SST returns or to the general ledger, automated flags can trigger enquiries and audits. This means that tax coding at the point of invoicing and the retention of supporting documentation are now central to indirect tax compliance.

For accounting teams, the implication is that SST reporting must be reconciled to source invoice data and to the sales ledger on a regular basis. This requires consistent tax coding at the point of sale, retention of supporting documents such as delivery notes and contracts, and a monthly reconciliation routine that compares e‑invoice outputs, SST returns and ledger postings. Any differences should be explained, documented and corrected promptly.

To reduce audit risk, maintain a reconciliation file that documents differences, the reason for each variance and the corrective action taken. Keep supporting evidence for zero‑rated or exempt supplies and for any adjustments claimed. Where systemic issues are identified, correct the source process so that errors do not repeat in subsequent periods.

Payroll and Labour Cost Changes: Multi‑Tier Foreign Worker Levy and Related Impacts

A phased rollout of a multi‑tier foreign worker levy increases the cost of employing foreign labour and changes the economics of labour‑intensive operations. For SMEs that rely on foreign workers, this increases recurring payroll costs and affects pricing, margins and cashflow.

From an accounting and cashflow perspective, you should update payroll models and rolling cashflow forecasts to reflect higher levy costs. Where levies are phased in, model the timing of each tranche and the cumulative cash impact. Consider the effect on unit costs and whether pricing, staffing levels or automation investments are required to maintain margins.

Operationally, ensure payroll systems capture levy amounts separately from wages and statutory contributions, and reconcile levy payments to payroll journals and bank statements. Retain levy payment receipts and any correspondence with immigration or labour authorities. If your business is labour‑intensive, consider scenario planning that includes automation, process redesign or a shift toward local hiring where feasible.

LLP (i.e. PLT) Profit Distribution Tax: Partner Planning and Provisioning

From the 2026 year of assessment, a targeted rule introduces a tax on limited liability partnership (LLP) profit distributions above a specified threshold. This change affects partner cashflow planning and requires LLPs to revisit distribution policies.

Practically, LLPs must track distributions and calculate the tax on amounts exceeding the threshold. This requires clear records of profit allocation, distribution dates and partner entitlements. LLPs should consider whether to retain profits within the LLP to defer distributions, to adjust distribution timing, or to provision for the tax when distributions are planned. Accounting teams should maintain a distribution register, document partner resolutions authorising distributions, and record tax provisioning entries in the accounting system so that the financial statements reflect the expected tax cost.

Stronger Tax Enforcement and Cross‑Agency Analytics: The New Normal

Across tax and regulatory agencies, enforcement is shifting toward data‑driven analytics that cross‑reference e‑invoices, SST filings, payroll records and stamping registers. This increases the probability that mismatches or omissions will be detected and investigated, and it raises the bar for data integrity and reconciled records.

The primary defence against data‑driven audits is data integrity: consistent master data (customer and supplier identifiers), reconciled ledgers, retained validation logs and indexed supporting documents. Manual workarounds and ad‑hoc spreadsheets are high‑risk because they break the audit trail and make it difficult to demonstrate the origin and accuracy of reported figures.

To prepare, implement monthly internal audits that reconcile tax filings to source data, centralise document storage with indexed metadata, and document exception handling and remediation steps. These routines will materially reduce the time and cost of responding to regulator enquiries and will demonstrate a proactive control environment.

Practical Cashflow and Budgeting Implications for SMEs

The combined effect of higher levies, potential carbon tax exposure, stamp duty self‑assessment liabilities and the costs of e‑invoicing implementation can be material to an SME’s cashflow. These are not theoretical risks; they translate into real cash outflows, higher operating costs and potential retrospective liabilities.

To manage cashflow, update your rolling cashflow forecast to include implementation costs for e‑invoicing and middleware, potential stamp duty liabilities for recent contracts, higher payroll levies for foreign workers, and a carbon tax contingency for high‑emission activities. Maintain a contingency buffer and identify short‑term financing options in advance rather than reacting to a cash shortfall. Scenario planning—modelling best, likely and worst cases—will help you understand the timing and magnitude of potential cash needs and will support timely decisions about financing, pricing and cost control.

Controls, Reconciliations and Record Retention: A Practical Checklist

To reduce audit exposure and operational risk, implement the following controls and routines and document them in simple standard operating procedures (SOPs):

1. E‑invoice retention: store the original invoice data, the validation response and any amendment or cancellation records together with the sales ledger entry so that each invoice can be traced from source to tax filing.  

2. Stamping register: maintain a contract register that records stamping status, duty paid, payment reference and a scanned stamped copy so that every executed contract can be verified quickly.  

3. Monthly tax reconciliations: reconcile e‑invoices to SST returns, sales ledger and bank receipts; reconcile payroll journals to EPF, SOCSO and PCB remittances to ensure statutory filings match ledger balances.  

4. Document indexing: store supporting documents (delivery notes, contracts, vendor invoices) with searchable metadata such as date, supplier, invoice number and tax identifier to speed retrieval during audits.  

5. Segregation of duties: separate invoice creation, approval and payment responsibilities where practical and implement two‑person sign‑off for payroll and large payments to reduce fraud risk.  

Immediate Action Plan for SMEs and Entrepreneurs

1. Run a rapid readiness assessment of your invoicing, stamping and payroll systems to identify gaps and quick wins that reduce immediate exposure.  

2. Update cashflow forecasts to include implementation costs, levy increases and potential retrospective stamp duty liabilities so financing needs are visible.  

3. Implement or confirm stamping workflows and a contract register to capture and retain stamped instruments and to reduce retrospective risk.  

4. Start monthly reconciliations that compare e‑invoice outputs to SST returns and ledger postings and resolve variances promptly.  

5. Document SOPs for invoicing, stamping, payroll remittances and record retention and assign clear owners for each task.  

6. Pilot e‑invoicing with a small customer set to validate mappings and exception handling before full rollout to avoid large‑scale disruption.  

Taking these steps now will materially reduce the risk of enforcement action, unexpected cash outflows and operational disruption.

Summary

This Alert summarises the key filing deadlines for individuals, employers and businesses for the 2025 tax year. Missing or late submissions can attract penalties, interest and administrative follow‑up. Use this guide to confirm which forms apply to you, who is responsible for each filing, and the practical steps to meet the deadlines.

Overview

Tax filing obligations in Malaysia vary by taxpayer type and entity structure. 

• Employers must issue employee statements and submit employer declarations; 

• Businesses and individuals must file the appropriate income tax returns; and 

• Non‑residents have separate filing timelines depending on whether they have business income.

Confirm the correct form for your circumstances, prepare supporting documentation in advance, and submit via the e‑filing portal or the relevant submission channel before the stated deadlines.

Filing Deadlines and Responsibilities

1. Form EA: Employee Annual Income Statement

2. Form E: Employer Declaration of Employees’ Annual Remuneration

3. CP 58: Declaration of Payments to Agents / Dealers / Distributors

4. Form BE: Salaried Individuals with no business income

5. Form B: Individuals with Business Income (including freelancers and self‑employed)

6. Form P: Partnership

7. Form C: Private Limited Company (i.e. Sdn Bhd)

8. Form PT: Limited Liability Partnership (i.e. LLP)

9. Form M: Non‑Resident without business income

10. Form M: Non‑Resident with business income

Practical Steps to Meet Deadlines

• Assign ownership

• Prepare documentation early

• Use e‑filing where available

• Calendar and reminders

• Estimate and plan payments

• Contact us

Penalties and Consequences

Late filing or incorrect submissions can result in administrative penalties, interest on unpaid tax, and additional compliance enquiries. Employers who fail to issue Form EA or submit Form E on time may face penalties under employer reporting rules. Businesses and individuals should treat these deadlines as compliance priorities to avoid unnecessary costs and enforcement action.

Next Steps and Support

Review the list above and confirm which forms apply to your situation. Prepare and reconcile supporting documents now, set internal deadlines, and complete submissions through the appropriate e‑filing channels. 

For tailored guidance on complex filings, cross‑border issues, or corporate year‑end timing, contact HKP Solutions for practical assistance and review.

Summary

This Alert explains the practical, high‑priority actions individual taxpayers should take before the end of the 2025 tax year to reduce risk, preserve reliefs, and prepare for accurate e‑filing under Malaysia’s Self‑Assessment System. It covers residency checks, income reconciliation, relief documentation, property disposals (RPGT/CGT), foreign income and withholding tax, provisional tax estimation, and a documentation checklist you can use immediately.

Filing deadline

The filing deadline for individual taxpayers for Year of Assessment (YA) 2025 is as follows:-

• Form BE for salaried individuals with no business income: 15 May 2026 via e-filing (30 April 2026 if manual hardcopy submission)

• Form B for individuals with business income: 15 July 2026 via e-filing (30 June 2026 if manual hardcopy submission)

• Form P for partnership: 15 July 2026 via e-filing (30 June 2026 if manual hardcopy submission).
  Note: The Form P should be finalised early in order for each partner to subsequently submit their Form B within the prescribed deadline.

Overview

Confirming your tax position and organising records before year‑end reduces the chance of errors, penalties, and missed reliefs. Key drivers of year‑end work are residency status, timing of income and deductible payments, property disposals, and foreign income. Start by gathering payslips, bank statements, receipts for reliefs, and any documents relating to disposals or cross‑border income. Where matters are complex, obtain specialist advice before 31 December to limit retrospective exposure.

Action Checklist

1. Confirm tax residency

2. Reconcile income

3. Gather relief documentation

4. Review property disposals

5. Verify withholding tax and foreign tax credits

6. Prepare for e‑filing

7. Estimate provisional tax

8. Document one‑off items

9. Seek specialist review

Timeline and Action Plan

Now

• Gather payslips, EA forms, bank statements, and receipts for reliefs.
• Reconcile payroll and bank records.
• Run a provisional tax estimate and identify any actions you can take before year‑end. This step is particularly important if you have significant other sources of income or if you run a business (e.g. as an entrepreneur) to minimise cash-flow surprises when tax returns are due.

By 31 December

• Finalise actions you control, such as prepaying deductible items if appropriate.
• Confirm disposal dates for assets and secure all transaction documents.

January to April 2026 (filing window)

• Complete e‑filing, attach supporting schedules and reconciliations, and pay any balance due or instalments. 
• Do not wait to the last-minute!

Documentation checklist

• Payslips and EA forms; bonus confirmations.
• Bank statements and reconciliations.
• EPF, insurance, medical, education and donation receipts.
• Sale/purchase agreements, legal invoices and agent fees for disposals.
• Foreign tax certificates and withholding documentation.
• Reconciliations, variance analyses and supporting schedules.

Summary

This update summarises the YA 2025 personal income tax rates and reliefs for Malaysian resident individuals and links to the full supporting PDF (refer to link below). It has been written for individuals who want a clear, practical reference and not legalese. 

Use this as a quick guide to estimate tax, check filing deadlines and identify reliefs you may be able to claim.

How to use this guide

1. Estimate chargeable income

2. Apply the tax bands

3. Check eligibility

4. File on time

5. Get help for complex cases

For more details, refer to our handy guide.

Summary

This Alert outlines the year‑end and filing actions corporate taxpayers, especially SMEs, should prioritise to remain compliant, manage cashflow, and reduce the risk of penalties or retrospective adjustments. It covers closing the accounting period, preparing statutory and management reporting, provisional tax planning, SST and withholding tax checks, documentation for audits and incentives, and practical timelines tailored to small and medium enterprises.

Filing deadline

The filing deadline for corporate taxpayers for Year of Assessment (YA) 2025 is as follows:-

• Form BE for salaried individuals with no business income: 15 May 2026 via e-filing (30 April 2026 if manual hardcopy submission)

• Form B for individuals with business income: 15 July 2026 via e-filing (30 June 2026 if manual hardcopy submission)

• Form P for partnership: 15 July 2026 via e-filing (30 June 2026 if manual hardcopy submission).
  Note: The Form P should be finalised early in order for each partner to subsequently submit their Form B within the prescribed deadline.

Overview

Corporate tax and compliance obligations for SMEs are driven by the company’s financial year‑end, the nature of taxable transactions, and whether the business has cross‑border activities or related‑party arrangements. Early preparation reduces last‑minute errors, improves cashflow forecasting, and strengthens audit readiness. SMEs should treat year‑end close as both a compliance exercise and an opportunity to tighten controls, document key judgments, and identify tax‑efficient operational changes.

Action Checklist

1. Finalise accounting close and reconciliations

2. Prepare statutory financial statements and management packs

3. Compute tax provisions and provisional tax

4. Review SST and indirect tax positions

5. Check withholding tax and cross‑border payments

6. Document related‑party transactions and transfer pricing

7. Confirm eligibility and documentation for incentives

8. Prepare audit schedules and supporting packs

9. Review corporate governance and statutory filings

10. Engage advisers for complex matters

Timeline 

• Now (pre‑year‑end / within 1–2 months of FY‑end)

• At year‑end

• Within 1–2 months after year‑end

• Within 3–4 months after year‑end

Documentation checklist (minimum)

• General ledger and trial balance; reconciliations for bank, AR, AP and intercompany.
• Fixed asset register, purchase invoices and disposal documentation.
• Contracts, invoices and payment evidence for cross‑border transactions.
• SST returns and supporting invoices; withholding tax certificates.
• Tax computations, provisional tax worksheets and working papers.
• Transfer pricing summary or contemporaneous file (if applicable).
• Incentive approvals, utilisation reports and compliance evidence (if applicable).

Risks, mitigations and next steps

• Common risks

• Mitigations

• Next steps

Summary

In this update, we have summarised the key Malaysian tax and compliance developments that are relevant to businesses and individuals, with practical implications for SMEs and entrepreneurs. 

Highlights include new stamp duty and late‑stamping penalty guidance, a 10‑year cap on certain institutional approvals, revised e‑Invoice rules and MyInvois e‑POS guidance, and several public rulings affecting accounting period changes, construction contracts and seagoing employment income. 

Read the action points to prioritise what to do next.

Overview of material changes and why they matter

1. Approval period for Section 44(6) status

2. e‑Invoice updates

3. Public ruling updates

4. Stamp duty on movable property instruments

5. Late stamping penalties

For more details, refer to the December 2025 update

This consolidated briefing covers three priority areas from the Finance Bill 2025.

1. Capital Gains Tax: Expanded definition of disposal (effective 1 Jan 2026)

2. RPGT loss carry-forward: Proposed 10‑year limit and transitional rules (effective YA 2026)

3. Tax administration and instalment timing (Transitional YA 2027 and effective YA 2028)

Note: The Finance Act 2025 and the Measures for the Collection, Administration and Enforcement of Tax Act 2025 have been gazetted on 31 December 2025. Following the gazettement, the Act will be effective on 1 January 2026. No significant difference was noted between the gazetted legislation and the Bills covered in this update.

For more details, refer to the November 2025 update