Taking Care of Compliance

A Sdn Bhd company structure provides a number of advantages including limited liability, tax benefits, and transferability of shares. Nevertheless, operating a company in Malaysia is only possible if you adhere fully to the business compliance requirements set by the Malaysian authorities. We have put together a handy compilation of monthly and annual compliance checklists to help you stay compliant. These checklists cover the main requirements for the submission of financial reports, tax information and tax payments and other related matters. By all means, you are free to appoint professionals to assist you in meeting these requirements, but as a business owner, it is also your responsibility to ensure that you are well-informed.

Annual Compliance Checklist for Sdn Bhd

 

1: Submission of corporate tax estimates

Due date: Within 3 months of operation/30 days before the start of the following assessment year The estimated tax payable will be calculated based on the estimated annual profit of your company. Then, you will need to make monthly instalments based on the estimated tax payable. The best practice is to engage an accountant or tax agent to help you with it, to ensure that you are doing it correctly. The tax estimates can be revised if necessary. For more information, you may visit LHDN Malaysia.

2: Submission of corporate tax return

Due date: Within 7 months after the assessment year ends The initial estimated tax payable and the actual tax payable might be different. Depending on the difference between the actual tax liability and the taxes paid, companies will either pay the balance or receive a refund. This can be done through the submission of a tax return via the e-filing portal. You can either get this done yourself or engage a tax accountant.

3: Submission of payroll-related statements (PCB)

Due date: By 31st March of the following year As an employer, you will need to submit Form E (Employer Return Form) and the monthly tax deductions to LHDN. In turn, your employees will receive the Form EA/(C.P. 8A), which is the Statement of Remuneration from Employment, before March every year prior to their personal income tax submission. You can find the forms here.

4: Lodgement of financial statements and directors’ report

Due date: To be circulated to shareholders within 6 months after the FYE and lodged within 30 days after circulation Financial statements are prepared by accountants and audited by your appointed auditor. For SSM submission, your auditor will need to prepare the audited report, while the directors will need to prepare the directors’ report. A directors’ report provides the following information:

• Details of company and any dividends
• Activities of the company
• Business reviews

Following approval by the board and circulation to the shareholders, the company secretary then lodges financial statements to SSM along with the directors’ report.

5: Annual return lodgement

Due date: Submitted every year within 30 days from the anniversary of its date of incorporation Every company needs to lodge an annual return on a yearly basis. The annual return is the summary of your company information that includes:

• Business nature
• Registered address
• Directors and shareholders

The purpose of submitting the annual return is to notify the changes in any of the above information. Even if there are no changes, it is still mandatory to lodge the annual return.

Monthly Compliance Checklist for Sdn Bhd

 

1: Corporate tax payment

Due date: Instalment payments based on estimated tax payable are required before the 15th of the second month of the basis period of every assessment year. Payment is required by the 15th of each following month for a total of twelve months. Eg. if the Company’s basis period is 1.1.2023-31.12.2023, the first instalment would be due by 15.2.2023. Estimated tax payable can be submitted not less than 30 days before every basis period, and can be revised every 6th and 9th month. Eg. if the Company’s basis period is 1.1.2023-31.12.2023, the estimated tax payable submission is due by 30.11.2022. You can make the submissions or payments by yourself or by engaging a tax accountant.

2: EPF, SOCSO, and EIS payments

Due date: By 15th of each following month It is a requirement for every employer and employee to contribute EPF, SOCSO, and EIS on a monthly basis in accordance with the statutory rates, with the company being responsible for remitting to EPF, EIS and SOCSO respectively. You can make payments either offline or online via EPF and SOCSO portals. EIS & SOCSO contributions are for Malaysians and permanent residents only.

3: Employee payroll tax (PCB) payment

Due date: The payments for the preceding month must be made by the 15th of each following month The Employee’s Payroll Tax is commonly referred to as PCB. All employers need to retain a required percentage of the employee’s remuneration such as salary, incentives, bonus, and commission to be paid as Monthly Tax Deduction (MTD) to LHDN. To calculate the amount of PCB, you can refer to the MTD schedule or use the Computerized Calculation Method available on e-CP39 portal. However, the final tax payment is dependent on the actual earnings of the employee for the year and also the employee’s personal tax reliefs as updated in the payroll system. (e.g. spouse working, spouse not working, number of children etc).

4. Sales & Service Tax (SST) submission and payment

Due date: SST payments must be made within 30 days from the end of the taxable period. The taxable period for SST return is every two months. Even if there is no tax to be paid, the return must be filed. SST can be filed online through the CJP system or by downloading the Form SST-02 from the MySST portal and submit it to the Customs Processing Centre (CPC) by post.

Conclusion

Taking steps to meet your legal obligations is crucial to ensure your business operates smoothly. If you are unsure of the compliance requirements for your business, you should consult a professional company secretary and corporate services provider. Let Quadrant Biz assist you in staying compliant with the key compliance requirements while you focus on growing your business.