Many Singapore owners look at Malaysia for customers, staff or a second company. Start by comparing the taxes you would face. This article covers company income tax, sales taxes and e-invoicing. Cross-border questions sit outside the scope, and I list them at the end.
Company income tax
– Singapore charges 17% (YA2026). The partial exemption removes 75% of the first S$10,000 and 50% of the next S$190,000 from tax. Budget 2026 kept the rate unchanged.
– Malaysia charges 24% on company profit. Malaysia’s budget outlook for 2027, dated 9 October 2026, mentions no change to this rate.
– Malaysia has lower SME tiers. A company qualifies with paid-up capital of RM2.5 million or less and gross business income of RM50 million or less. For YA2023 and YA2024, the first RM150,000 of profit bore 15% and the next RM450,000 bore 17%. Profit above RM600,000 bore 24%. LHDN publishes the tiers for later years, so read the table for your own year.
The numbers
Take chargeable income of 500,000 in each country’s own currency, before any rebate.
– Singapore: exempt amount is 102,500 and taxable amount is 397,500. Tax is 67,575, or 13.5% of profit.
– Malaysia, SME tiers for YA2023-24: tax is 22,500 on the first 150,000 plus 59,500 on the next 350,000. The total is 82,000, or 16.4%.
– Malaysia at 24% with no SME tier: tax is 120,000.
Foreign ownership changes the answer on whether a Malaysian subsidiary of your Singapore company gets the SME tiers. Ask a Malaysian tax adviser before you plan on the lower rates.
Sales taxes
– Singapore charges GST at 9%, and you register once taxable turnover passes S$1 million.
– Malaysia has no GST. The country dropped GST and brought back Sales and Service Tax (SST) on 1 September 2018.
– Sales tax on goods runs at 0%, 5% or 10%, depending on the goods.
– Service tax is 8% on leasing and rental above RM500,000, and on fee-based financial and beauty services. Construction above RM1.5 million, private healthcare and education carry 6%. The rate rose from 6% to 8% on 1 March 2024, and the scope widened on 1 July 2025.
E-invoicing
Malaysia phased in mandatory e-invoicing by company size, starting 1 August 2024 for revenue above RM100 million. Companies with revenue up to RM5 million joined on 1 January 2026. Companies below RM3 million are not required to join. Singapore’s GST InvoiceNow requirement already applies to new voluntary registrants from 1 April 2026 and reaches new compulsory registrants from 1 April 2028.
What this article leaves out
I have not covered how Singapore and Malaysia tax a Singapore company with staff or an office in Malaysia, or withholding tax on payments between the two. Get Malaysian tax advice before you sign a lease or hire anyone there.
Send me your Malaysia plan and your latest profit figure by WhatsApp to +65 9876 3553 or by email to henry@cschow.com.sg.
Henry Chow
Public Accountant, C S Chow & Co