What is the Year of Assessment and how does it relate to my financial year?
The Year of Assessment (YA) is the calendar year in which your company's accounting year (the basis period) ends. A company with a financial year ending 30 June 2025 reports that income in YA 2025.
Malaysian tax uses two terms that owners often mix up.
- Basis period: the accounting period whose profit is taxed. For most companies this is its financial year.
- Year of Assessment (YA): the calendar year in which that basis period ends. The tax rates and rules in force for that YA apply to the profit.
Examples:
- Financial year 1 Jan 2025 to 31 Dec 2025: YA 2025.
- Financial year 1 Jul 2024 to 30 Jun 2025: YA 2025.
- Financial year 1 Apr 2025 to 31 Mar 2026: YA 2026.
The YA matters because it fixes the tax rate scale, the SME tests, capital allowance rules and filing dates. Deadlines run from the financial year end, not from 31 December. A June year-end company files Form C by 31 January of the following year, which is seven months after its year end.
A company can change its financial year end, but if it does so the basis periods for the affected years may be shorter or longer than 12 months, and LHDN approval or notification rules apply. Individuals with employment income use the calendar year as their basis period.
Legal basis
- Income Tax Act 1967, s.21 (basis period)
- Income Tax Act 1967, s.2 (year of assessment)
Sources
Applies to YA 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
- What is the corporate tax rate for a small company in Malaysia?A Malaysian resident company normally pays 24% income tax. A company that meets the SME conditions pays 15% on the first RM150,000 of chargeable income, 17% on the next RM450,000 (up to RM600,000), and 24% on anything above that.
- What conditions must my company meet to get the SME tax rates in Malaysia?To use the lower 15%/17% rates, the company must be resident, have ordinary paid-up capital of RM2.5 million or less, and gross business income of RM50 million or less. It must also pass the related-company test and, from YA 2024, a foreign-ownership test.
- Does a dormant company with no income still have to file a tax return in Malaysia?Yes. LHDN says companies that are dormant or have not started business must still register a tax file and file returns. A nil return tells LHDN there is no taxable income, and failing to file can be an offence even when no tax is due.
- How do I file Form C through MyTax e-Filing?Form C is filed online through LHDN's MyTax portal using the company's tax number and login. You complete the company return, attach no paper, submit, and keep the confirmation. Manual paper submission is no longer accepted for companies.
- What is CP204 and why does my company have to pay tax in instalments?CP204 is the estimate of the tax a company expects to owe for the year, submitted before the year starts. The estimated tax is paid in equal monthly instalments, due on the 15th of each month from the second month, instead of one lump sum after Form C.