Taxation for Limited Liability Partnership

Income generated from LLP will be taxed at LLP level only.  A LLP needs to provide estimate of tax payable and payment by instalments as provided in section 107C ITA.

Form PT refers to return form for a limited liability partnerships (LLP).

Form PT submission deadline:

All LLP must file the tax returns (Form PT) within seven (7) months from the date of closing of its basis period (i.e. accounting period).

Tax Rate for Limited Liability Partnership

Income tax shall be imposed on the chargeable income of a LLP for a year of assessment at the rate provided in Part 1 Schedule 1 of the ITA. However, the taxation of an LLP resident in Malaysia with a total capital contribution (whether in cash or in kind) of RM2.5 million and less at the beginning of the basis period for a year of assessment shall be at the rate as provided in paragraph 2D, Part 1 Schedule 1 of the ITA.

The above rate does not apply to the LLP if more than –

• 50% of the capital contribution (whether in cash or in kind) of the LLP is directly or indirectly contributed by a company;
• 50% of the paid-up capital in respect of ordinary shares of the company is directly or indirectly owned by the LLP; or
• 50% of the capital contribution (whether in cash or in kind) of the LLP and fifty percent of the paid-up capital in respect of ordinary shares of the company is directly or indirectly owned by another company.