If my company is audit-exempt, can I file Form C with LHDN using unaudited accounts?
SSM's FAQ says LHDN has announced that if a company is not required to submit audited accounts to SSM, section 77A(4) of the Income Tax Act does not apply. The audit rule for tax sits in a separate law, so confirm LHDN's current practice before filing.
Two laws, two questions. The Companies Act decides whether you need an audit for company law. The Income Tax Act 1967 separately governs what accounts support a tax return. SSM's FAQ stresses that the audited-accounts requirement for LHDN comes from section 77A(4) of the Income Tax Act and is beyond the Companies Act.
What SSM says LHDN announced. SSM's FAQ records that LHDN announced that if a company is not required to submit audited accounts to SSM, section 77A(4) would not apply to it. SSM links to the LHDN announcement (dated 11 April 2014 in its address) and tells readers to contact LHDN for clarification. Read the LHDN announcement itself, or ask LHDN, before relying on it.
Later change to the Act. A January 2019 article by a Malaysian accounting firm reports that after the Income Tax (Amendment) Act 2018 the section refers to financial statements prepared under the Companies Act 2016 rather than audited accounts. It predates the 2025 changes.
Earlier stance. Reports from 2017-2018 show LHDN had said it expected audited accounts even for exempt companies, so older articles may say the opposite.
What to do
- Confirm with LHDN or a tax adviser how your Form C should be supported for the year.
- Keep the unaudited accounts, directors' certificate and working papers ready.
Tax computation and Form C deadlines are covered in the Malaysia tax section.
Legal basis
- Income Tax Act 1967, s.77A(4)
- Companies Act 2016, s.267(2)
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- Does every Sdn Bhd in Malaysia need to be audited?Not every one, but audit is the default. Section 267(1) of the Companies Act 2016 requires a private company to appoint an auditor for each financial year, unless it qualifies for and elects the audit exemption set by SSM's Practice Directive 10/2024.
- What is audit exemption for private companies in Malaysia?Audit exemption lets an eligible private company choose not to appoint an auditor for a financial year. It rests on section 267(2) of the Companies Act 2016 and SSM Practice Directive 10/2024. The company still prepares and lodges unaudited financial statements.
- What are the audit exemption thresholds for a Sdn Bhd in 2026?For financial periods starting 1 January to 31 December 2026 (Phase 2), a private company must meet at least two of three tests: revenue up to RM2,000,000, total assets up to RM2,000,000, and no more than 20 employees. Each test covers the current and past two years.
- How do I check if my Sdn Bhd qualifies for audit exemption?Pass at least two of three tests (revenue, total assets, employees) for the current financial year and the past two, using the limits for the phase your period falls in. Also confirm you are not an excluded company type, such as a subsidiary of a public company.
- Is a dormant company exempt from audit in Malaysia?Yes, if it has been dormant since incorporation or was dormant in both the current and immediately preceding financial year. A company is dormant when it carries on no business and has no accounting transaction, ignoring payments it must legally make.