Is Online Selling Income Taxable in Malaysia, Even Part-Time?

Section 4(a) of the Income Tax Act 1967 charges tax on gains or profits from a business. The Inland Revenue Board (LHDN) guidelines on e-commerce and its digital business page state that individuals and companies running online businesses are taxed under the same Act, and they list marketplaces such as Shopee and Lazada among the business models covered.

What is taxed (year of assessment, YA, 2025). Net profit: gross sales less allowable expenses (cost of goods, platform fees, shipping, advertising and so on). It is not the gross sales figure or the bank payout.

Part-time sellers. There is no separate exemption for a side business. Profit is added to any salary and other income, and the total is taxed at resident individual rates after reliefs. A person whose total chargeable income is low may owe no tax but may still be required to file.

Social media and creators. LHDN's January 2026 guideline on influencers treats income from social platforms, including sponsorships and affiliate commissions, as taxable.

Foreign platforms. Income from a Malaysian business is generally treated as derived in Malaysia even where the platform or customer is overseas.

Whether you must file, and which form, depends on the type of income and your status. Sole proprietors with business income file Form B.