Reference

Malaysian Accounting Glossary

Plain-language definitions of the 38 essential Malaysian accounting, tax, and compliance terms every SME finance team encounters. Use this as a quick reference while reading the docs, the blog, or your auditor's report.

Last updated: 2026-06-11

A

2 terms

Agreed-Upon Procedures AUP #: An engagement where an auditor performs specific procedures agreed upon by the engaging party and reports factual findings without expressing an opinion. AUP engagements are common in Malaysia for due diligence reviews, grant compliance checks, and specific account balance verifications. They are governed by ISRS 4400 (Revised).; Also known as: AUP; Related: Audit services
Annual Return #: A statutory filing that every Malaysian company must lodge with SSM within 30 days of the anniversary of its incorporation date. The annual return confirms the company's current registered particulars — directors, shareholders, share capital, registered office address, and financial year-end. Late filing attracts penalties that increase with the length of delay and can eventually trigger striking-off proceedings.; Related: Company secretary services · SSM; Source: ssm.com.my

B

2 terms

Bank Negara Malaysia BNM #: Malaysia's central bank. Bank Negara regulates licensed banks, payment service providers, money changers, and electronic money issuers under the Financial Services Act 2013 and the Islamic Financial Services Act 2013. For accounting software, BNM matters because it sets the rules for foreign exchange reporting, anti-money-laundering (AMLA) compliance, and the connection of business bank accounts via DuitNow and FPX.; Also known as: BNM; Source: bnm.gov.my
Board Resolution #: A formal decision made by the board of directors of a company, recorded in the minutes of a board meeting or passed as a written resolution (circular resolution) under Section 302 of the Companies Act 2016. Common board resolutions include opening bank accounts, appointing auditors, approving financial statements, declaring dividends, and authorizing share allotments. The company secretary typically drafts and maintains board resolutions.; Related: Company secretary services

C

5 terms

Chart of Accounts CoA #: The structured list of every account a business uses to record financial transactions, organized into Assets, Liabilities, Equity, Revenue, and Expenses. Malaysian SMEs typically follow either a MFRS-based CoA (for businesses subject to MFRS reporting) or a MPERS-based CoA (for private entities). IntBooks ships with industry-specific Malaysian default charts of accounts that already include the right tax-coded accounts for SST-02 reporting.; Also known as: CoA, GL accounts; Related: Chart of accounts setup
Companies Commission of Malaysia Suruhanjaya Syarikat Malaysia (SSM) #: The federal regulator that registers and enforces compliance for all Malaysian business entities — Sdn Bhd, Berhad, LLP, Enterprise, sole proprietorships, and partnerships. Every Malaysian company has a 12-digit SSM number that identifies it across all government systems, including LHDN MyInvois. The SSM number is mandatory on every e-invoice issued through MyInvois.; Also known as: SSM; Source: ssm.com.my
Company Secretary #: A statutory officer that every Malaysian company must appoint under Section 235 of the Companies Act 2016 within 30 days of incorporation. The company secretary must be a natural person, at least 18 years old, a Malaysian citizen or permanent resident, and either a member of a prescribed body (MIA, MAICSA, MACS) or licensed by SSM. The secretary is responsible for statutory compliance, register maintenance, and SSM filings.; Related: Company secretary services · SSM
Compilation Report #: A report prepared by a licensed accountant that compiles financial statements from management-provided data without expressing an audit opinion. In Malaysia, exempt private companies (revenue under RM 100,000, no corporate shareholders, 20 or fewer natural-person shareholders) may file a compilation report instead of audited financial statements. The compilation engagement follows the Malaysian equivalent of ISRS 4410.; Related: Audit services
Customs Duties #: Import and export duties imposed by the Royal Malaysian Customs Department (RMCD) on goods entering or leaving Malaysia. Customs duties are separate from SST and are calculated on the CIF value of imported goods at rates set by the Customs Order. Importers must declare every shipment via the uCustoms portal and the duty becomes payable before the goods can be released.; Related: RMCD

D

1 term

DuitNow #: Malaysia's national real-time retail payment system, operated by Payments Network Malaysia (PayNet) under Bank Negara oversight. DuitNow lets businesses receive payments from any Malaysian bank account using a registered ID (mobile, NRIC, or business registration number) instead of a bank account number. Most accounting software in Malaysia, including IntBooks, can issue DuitNow QR codes on invoices so customers can pay in one tap.; Source: duitnow.my

E

4 terms

e-Invoice #: An invoice that has been submitted to LHDN's MyInvois platform and assigned a Unique Identification Number (UIN). From 2024 onwards, e-invoices are mandatory for Malaysian businesses above certain turnover thresholds. A valid e-invoice contains 55 mandatory fields, is issued in UBL 2.1 XML format, and is digitally signed by the issuer. The e-invoice is the only legally recognized form of invoice for tax purposes once a business is in scope.; Related: MyInvois explained · MyInvois integration
Employees Provident Fund Kumpulan Wang Simpanan Pekerja (KWSP) #: Malaysia's mandatory retirement savings fund. Employers contribute 12 to 13% of an employee's monthly wages and employees contribute 11%, with both portions remitted to KWSP each month. Every payroll run in IntBooks automatically calculates EPF deductions, generates the i-Akaun submission file, and posts the contribution as a payroll liability in the General Ledger.; Also known as: EPF, KWSP; Source: kwsp.gov.my
Employment Insurance System Sistem Insurans Pekerjaan #: A mandatory unemployment insurance scheme administered by SOCSO. Both employers and employees contribute 0.2% of monthly wages, capped at RM 9.90 each. EIS provides cash benefits, training, and job placement to retrenched workers. Every Malaysian payroll run includes an EIS line, and IntBooks generates the monthly Borang 8A submission file alongside SOCSO and EPF.; Also known as: EIS; Source: perkeso.gov.my
Engagement Letter #: A written agreement between a professional services firm and its client that sets out the scope, responsibilities, fees, and timeline of the engagement. In Malaysia, auditors are required by ISA 210 to issue an engagement letter before commencing any audit, and tax agents typically issue one before preparing tax returns. The letter protects both parties by clearly defining what is and is not included in the scope of work.; Related: Audit services · Tax filing services

F

3 terms

Form C #: The annual corporate income tax return that every Sdn Bhd company in Malaysia must file with LHDN within seven months of the end of its financial year. Form C reports the company's chargeable income, tax computation, and final tax payable for the year of assessment. Once MyInvois adoption is complete, LHDN expects to auto-populate Form C from the e-invoice ledger, removing most of the manual data entry that exists today.; Related: LHDN
Form C (Corporate Tax Return) #: The annual corporate income tax return that every Malaysian Sdn Bhd must file with LHDN within seven months of its financial year-end. Form C reports the company's statutory income, adjusted income, chargeable income, and tax payable for the year of assessment. The return must be signed by a director and, for companies using a tax agent, countersigned by the licensed agent. Late filing attracts penalties of up to RM 20,000 or imprisonment.; Related: Tax filing services · Form C · LHDN
FPX Financial Process Exchange #: Malaysia's online interbank payment gateway operated by PayNet, used to debit a payer's bank account in real time. FPX is the dominant retail B2C payment rail in Malaysia and is the underlying mechanism behind most billing and e-commerce checkouts. IntBooks integrates with FPX via BillPlz so customers and subscribers can pay invoices and subscriptions directly from their bank account without entering card details.; Related: BillPlz integration

H

1 term

Human Resource Development Fund HRD Corp Levy #: A mandatory training levy collected by HRD Corp from employers in approximately 80 industry sectors. Liable employers contribute 0.5 to 1% of each employee's monthly wages and the funds can be reclaimed for approved training programs. Companies with at least 10 employees in a covered MSIC sector must register and remit monthly. IntBooks calculates the HRDF levy automatically based on each employee's MSIC code and prepares the e-Disbursement file.; Also known as: HRDF, HRD Corp; Source: hrdcorp.gov.my

I

1 term

Inland Revenue Board of Malaysia Lembaga Hasil Dalam Negeri Malaysia (LHDN / IRBM) #: The federal agency that administers direct taxes in Malaysia — corporate income tax, individual income tax, real property gains tax, withholding tax, and the MyInvois e-invoicing platform. LHDN is the equivalent of HMRC in the UK or the IRS in the US. Every Malaysian taxpayer (individual or business) is identified by a Tax Identification Number (TIN) issued by LHDN.; Also known as: LHDN, IRBM; Source: hasil.gov.my

M

5 terms

Management Letter #: A letter issued by the external auditor to the management and board of directors at the conclusion of the statutory audit. The management letter highlights internal control weaknesses, accounting policy issues, and operational recommendations identified during the audit fieldwork. It is not a public document — unlike the auditor's report, the management letter is shared only with the company's management and directors.; Related: Audit services
MFRS Malaysian Financial Reporting Standards #: The full IFRS-equivalent accounting standards adopted by the Malaysian Accounting Standards Board (MASB) for companies that have public accountability — listed companies, banks, insurers, and large groups. MFRS is converged with IFRS as issued by the IASB. Smaller private entities typically use the simpler MPERS framework instead. IntBooks supports both MFRS and MPERS chart of accounts templates.; Related: MPERS
MPERS Malaysian Private Entities Reporting Standard #: A simplified accounting framework derived from the IFRS for SMEs, intended for Malaysian private entities that are not subject to the full MFRS. MPERS reduces the number of mandatory disclosures and uses cost-based measurement for many items where MFRS would require fair value. Most Malaysian SMEs use MPERS rather than full MFRS because the compliance burden is significantly lower.; Related: MFRS
MSIC Malaysia Standard Industrial Classification #: The 5-digit industry classification code that DOSM (the Department of Statistics Malaysia) uses to categorize every business activity in Malaysia. The MSIC code is mandatory on every e-invoice submitted to MyInvois because LHDN uses it to validate the invoice classification against the issuer's registered business activities. SSM also uses MSIC codes when registering new companies.; Source: DOSM MSIC
MyInvois #: LHDN's centralized e-invoicing platform, launched in 2024 and rolled out in phases through 2026. Every in-scope Malaysian business must submit each invoice, credit note, debit note, and refund note to MyInvois within 72 hours of issue. The platform validates the document, assigns a Unique Identification Number, and returns a QR code that must appear on every printed copy. MyInvois is the single most disruptive change to Malaysian tax administration in a generation.; Related: MyInvois explained · MyInvois integration · Submit an e-invoice; Source: myinvois.hasil.gov.my

P

3 terms

PCB (Monthly Tax Deduction) Potongan Cukai Bulanan #: The monthly tax deduction that Malaysian employers must withhold from employee salaries and remit to LHDN. PCB is calculated using the Computerised Calculation Method or the Scheduler Tax Deduction tables published by LHDN. Employers must remit the deducted amount to LHDN by the 15th of the following month using Form CP39. IntBooks calculates PCB automatically and generates the CP39 submission file.; Also known as: PCB, MTD, Potongan Cukai Bulanan; Related: Payroll services · LHDN; Source: hasil.gov.my
PERS Private Entity Reporting Standards #: The legacy private-entity reporting framework that preceded MPERS. PERS was withdrawn for periods beginning on or after 1 January 2016 and replaced with MPERS. The term still appears in some older accounting documents and audit reports, but new businesses should use MPERS instead.; Related: MPERS
Personal Data Protection Act PDPA 2010 #: Malaysia's primary data privacy law, enforced by the Personal Data Protection Commissioner. PDPA applies to any business that processes personal data in commercial transactions in Malaysia. The 2024 amendments significantly expanded the law to include mandatory breach notification within 72 hours, a Data Protection Officer requirement for large data controllers, and Data Subject Access Requests. IntBooks is PDPA-compliant by design — see our security and privacy documentation.; Also known as: PDPA; Source: pdp.gov.my

R

2 terms

Registered Office #: The official address of a Malaysian company as registered with SSM under Section 46 of the Companies Act 2016. All statutory documents, notices, and legal correspondence are served at this address. The registered office must be in Malaysia, open and accessible to the public during ordinary business hours, and the company must display its name at the entrance. Many SMEs use their company secretary's address as their registered office.; Related: Company secretary services · SSM
Royal Malaysian Customs Department Jabatan Kastam Diraja Malaysia #: The federal agency responsible for indirect taxes in Malaysia — Sales and Service Tax (SST), customs duties, excise duties, and the Departure Levy. RMCD operates the MyTAX portal where businesses register for SST and submit the bi-monthly SST-02 return. RMCD is the equivalent of HM Customs in the UK.; Also known as: RMCD, Customs, Kastam; Source: customs.gov.my

S

5 terms

Sales and Service Tax #: Malaysia's indirect tax regime, reintroduced in September 2018 to replace the short-lived GST. SST is split into Sales Tax (5 to 10%, charged on manufactured and imported goods) and Service Tax (6 to 8%, charged on prescribed taxable services). Service Tax is the more relevant of the two for most service businesses and is reported bi-monthly via the SST-02 return. The 2024 SST expansion brought significantly more services into scope.; Also known as: SST; Related: SST-02 · SST-02 reporting · SST-02 step-by-step guide
Service Tax #: The 6% or 8% tax imposed on prescribed taxable services under the Service Tax Act 2018, administered by RMCD. Professional services including accounting, auditing, legal, consulting, IT, and management services are generally subject to 6% service tax once the provider's annual turnover exceeds the registration threshold (RM 500,000 for most services). The service tax is reported bi-monthly via the SST-02 return.; Also known as: Service Tax; Related: SST-02 · RMCD
SOCSO Pertubuhan Keselamatan Sosial (PERKESO) #: Malaysia's social security organization. SOCSO administers the Employment Injury Scheme and the Invalidity Pension Scheme, providing benefits to workers who are injured at work or who become permanently disabled. Both employers and employees contribute monthly based on a graduated wage scale. The same agency also administers EIS. IntBooks generates the SOCSO Borang 2 / Borang 3 submission file as part of every payroll run.; Also known as: SOCSO, PERKESO; Source: perkeso.gov.my
SST-02 #: The bi-monthly Service Tax return that every SST-registered Malaysian business must file with RMCD via the MyTAX portal. The return covers two consecutive months of taxable supplies and is due by the last day of the month following the taxable period (e.g., the Jan-Feb return is due 31 March). SST-02 has 14 sections covering taxable supplies, exempt supplies, imported services tax, and adjustments. IntBooks generates the entire return in under two seconds.; Related: SST · SST-02 reporting · SST-02 step-by-step guide
Statutory Audit #: An annual audit of a company's financial statements required by law under the Companies Act 2016. Every Malaysian Sdn Bhd must undergo a statutory audit unless it qualifies as an exempt private company. The audit must be conducted by a firm registered with the Audit Oversight Board (AOB) and results in an independent auditor's report that accompanies the financial statements filed with SSM.; Related: Audit services · Choosing an audit firm

T

3 terms

Tax Agent #: A person licensed by LHDN under Section 153 of the Income Tax Act 1967 to prepare and submit tax returns on behalf of taxpayers. In Malaysia, only approved tax agents, members of the Malaysian Institute of Accountants (MIA), or members of the Malaysian Institute of Certified Public Accountants (MICPA) may sign and file corporate tax returns (Form C). Using an unauthorized person to file is an offence.; Related: Tax filing services · LHDN; Source: hasil.gov.my
Tax Identification Number TIN #: The unique number that LHDN assigns to every Malaysian taxpayer — individuals, sole proprietorships, companies, partnerships, and trusts. The TIN is mandatory on every e-invoice (both issuer and recipient sides) and is the primary key LHDN uses to match invoices to taxpayer records. Companies are typically issued a TIN that begins with C and is 10-12 digits long; individuals receive a SG-prefixed TIN.; Also known as: TIN; Related: MyInvois
Transfer Pricing #: The pricing of transactions between related parties — for example, between a Malaysian subsidiary and its foreign parent company. LHDN requires that related-party transactions be conducted at arm's length (the same price that unrelated parties would agree on) and that companies maintain contemporaneous transfer pricing documentation. Non-compliance can result in transfer pricing adjustments, penalties, and surcharges.; Related: Tax filing services · LHDN; Source: hasil.gov.my

W

1 term

Withholding Tax #: Tax that a Malaysian payer must deduct at source when making certain payments to non-residents — royalties, technical service fees, contract payments, interest, rental of movable property, and special classes of income. The rates range from 8 to 15% depending on the income type. The payer must remit the withheld amount to LHDN within one month and file a CP37 form. IntBooks tracks withholding tax obligations on supplier bills and surfaces them in the AP module.; Related: LHDN