How long must a Malaysian company keep its accounting records?

Companies Act 2016: Section 245 says records must be kept for seven years after the completion of the transactions or operations they record. The clock starts when the transaction is complete, not at the financial year end.

Income tax: section 82A of the Income Tax Act requires anyone who must file a return to keep sufficient documents for seven years from the end of that year of assessment. LHDN's Public Ruling 4/2000 gives the same seven years for companies; its example is a financial year ending 30 June 2002, kept until 31 December 2009. If a return is filed late, the seven years run from the end of the year in which it was filed. Where there is an appeal against an assessment, keep the records until the appeal is finally determined.

Practical points:

• Use whichever period ends later, so you satisfy both rules
• Keep records of long-lived items (property, loans, share capital, contracts) for longer than seven years in practice, as you will need them to prove ownership or cost
• Do not discard records while an LHDN query, audit or dispute is open
• A company that is closed down still has to retain records; see the question on records after striking off

Destroying records early can be an offence, so adopt a written retention schedule and review it each year.