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 filing that every Malaysian company must lodge with SSM for each calendar year, within 30 days of the anniversary of its incorporation date (section 68 of the Companies Act 2016). The annual return confirms the company's current particulars, such as its registered office address and the nature of its business. Late lodgement is an offence for the company and its officers, and the Registrar can strike off a company that has contravened the Act (section 549).; 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 foreign exchange rules, oversees payment systems such as DuitNow and FPX, and publishes reference exchange rates. IntBooks uses BNM reference rates when converting foreign-currency amounts on e-invoices.; Also known as: BNM; Source: bnm.gov.my
Board Resolution #: A formal decision of a company's board of directors, either recorded in the minutes of a board meeting or passed as a written (circular) resolution signed by the directors. Common board resolutions include opening bank accounts, approving financial statements, declaring dividends and authorising share allotments. The company secretary usually drafts board resolutions and keeps them with the company's records.; 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 Malaysian business entities: Sdn Bhd and Berhad companies, LLPs, sole proprietorships and partnerships. Each registered business has an SSM registration number. On every e-invoice submitted to MyInvois, the supplier's registration number (the business registration number, or BRN, for a registered business) is a mandatory field alongside its TIN.; Also known as: SSM; Source: ssm.com.my
Company Secretary #: An officer every Malaysian company must have under section 235 of the Companies Act 2016; the board must appoint the first secretary within 30 days of incorporation (section 236). The secretary must be a natural person aged 18 or above, a Malaysian citizen or permanent resident whose principal place of residence is in Malaysia, and either a member of a body in the Act's Fourth Schedule (such as MAICSA, MIA, MACS or MICPA) or licensed by SSM. The secretary looks after statutory compliance, the registers and SSM filings.; Related: Company secretary services · SSM
Compilation Report #: A report by an accountant who compiles financial statements from information provided by management, without giving an audit opinion or any assurance. Compilation engagements follow ISRS 4410 (Revised). In Malaysia, a private company that qualifies for audit exemption under SSM Practice Directive 10/2024 lodges unaudited financial statements with SSM, with the certificate the Companies Act 2016 requires, and some such companies have an accountant compile those statements.; 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. They are charged on the customs value of the goods at the rates set in the customs duties orders, and importers declare each shipment to RMCD. Check the current duty rate for your goods' tariff code with RMCD before you import.; 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, and DuitNow QR lets customers pay by scanning a code. The IntBooks point of sale records DuitNow QR as a payment method.; Source: duitnow.my

E

4 terms

e-Invoice #: An invoice that has been validated by LHDN's MyInvois system and given a unique identifier. E-invoices use the UBL 2.1 structure, can be submitted as XML or JSON, and are digitally signed by the issuer. E-invoicing was phased in by annual turnover, from businesses above RM100 million on 1 August 2024 to those at RM5 million and below on 1 January 2026. From 1 September 2026, businesses with annual revenue below RM3 million are not required to implement e-invoicing (LHDN statement, 30 August 2026).; Related: MyInvois explained · MyInvois integration
Employees Provident Fund Kumpulan Wang Simpanan Pekerja (KWSP) #: Malaysia's mandatory retirement savings fund. For most Malaysian employees under 60, the employee contributes 11% of monthly wages and the employer 12% or 13%, depending on the wage level, and both shares are paid to KWSP each month. Different rates apply to older employees and non-Malaysian employees; KWSP's contribution schedule is the reference. IntBooks calculates EPF in every payroll run and exports the Borang A file for upload to i-Akaun.; Also known as: EPF, KWSP; Source: kwsp.gov.my
Employment Insurance System Sistem Insurans Pekerjaan #: A mandatory employment insurance scheme administered by PERKESO (SOCSO) under the Employment Insurance System Act 2017. Employers and employees each contribute 0.2% of monthly wages, on wages up to the RM6,000 ceiling in force since 1 October 2024; the exact ringgit amount comes from PERKESO's contribution table. EIS supports people who lose their jobs with benefits, training and job-search help. IntBooks calculates EIS in every payroll run and exports the contribution file for PERKESO's ASSIST portal.; Also known as: EIS; Source: PERKESO contribution rates
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. Under ISA 210, an auditor must agree the terms of the audit engagement in writing before starting, usually in an engagement letter. Tax agents and bookkeepers typically issue one too. The letter protects both parties by defining what is and is not included in the work.; Related: Audit services · Tax filing services

F

3 terms

Form C #: The annual income tax return that a company resident in Malaysia files with LHDN. It is due within seven months after the close of the company's accounting period and is filed electronically (e-C) through MyTax. Form C reports the company's chargeable income, tax computation and tax payable for the year of assessment, based on its financial statements.; Related: LHDN
Form C (Corporate Tax Return) #: The annual income tax return a Malaysian company files with LHDN, due within seven months after the close of its accounting period and filed electronically (e-C) through MyTax. Form C reports the company's statutory income, adjusted income, chargeable income and tax payable for the year of assessment. A company that fails to file on time can face action under section 112 of the Income Tax Act 1967. It can file the return itself or through a tax agent.; 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 widely used for online bill payments and e-commerce checkouts in Malaysia. IntBooks uses the BillPlz payment gateway so customers can pay for their IntBooks subscription by FPX directly from their bank account, without entering card details.; Related: BillPlz integration

H

1 term

Human Resource Development Fund HRD Corp Levy #: A training levy collected by HRD Corp. Employers with 10 or more Malaysian employees in a covered industry must register and pay a monthly levy of 1% of those employees' wages (basic salary plus fixed allowances). Employers with 5 to 9 Malaysian employees may register voluntarily at 0.5%. Levies paid can fund approved training. The Act covers employers across most sectors, with listed exceptions. IntBooks calculates the levy for registered employers.; Also known as: HRDF, HRD Corp; Source: HRD Corp employers FAQ

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 categorise business activities in Malaysia. The supplier's MSIC code, describing its business nature and activity, is a mandatory field on every e-invoice submitted to MyInvois, so it pays to confirm your code before you start issuing e-invoices.; Source: DOSM MSIC
MyInvois #: LHDN's e-invoicing system. Businesses in scope submit invoices, credit notes, debit notes, refund notes and self-billed documents to MyInvois, which validates each one and assigns a unique identifier and a validation link, usually shown as a QR code. A document's issue date can't be more than 72 hours before it is submitted. After validation, the supplier can cancel, or the buyer reject, the document within 72 hours; after that, corrections are made with credit, debit or refund notes. From 1 September 2026, businesses with annual revenue below RM3 million are not required to implement e-invoicing.; Related: MyInvois explained · MyInvois integration · Submit an e-invoice; Source: MyInvois SDK (LHDN)

P

3 terms

PCB (Monthly Tax Deduction) Potongan Cukai Bulanan #: The monthly tax deduction that Malaysian employers withhold from employees' pay and remit to LHDN. PCB is worked out using LHDN's computerised calculation method or its PCB schedule. Employers must remit it to LHDN on or before the 15th of the following month, using e-CP39 or LHDN's other e-PCB services. IntBooks calculates PCB in each payroll run and exports the e-CP39 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 main data privacy law, enforced by the Personal Data Protection Commissioner. PDPA applies to businesses that process personal data in commercial transactions in Malaysia. The Personal Data Protection (Amendment) Act 2024 added a duty to appoint a data protection officer, mandatory data breach notification and a right to data portability. Under the Commissioner's guideline, a notifiable breach must be reported to the Commissioner within 72 hours and to affected individuals within 7 days after that.; Also known as: PDPA; Source: Personal Data Protection (Amendment) Act 2024 (pdp.gov.my)

R

2 terms

Registered Office #: The official address of a Malaysian company, required by section 46 of the Companies Act 2016. Communications and notices to the company may be sent there. The registered office must be in Malaysia and open and accessible to the public during ordinary business hours, and SSM must be told of a change of address within 14 days. The company's registers and records are generally kept there (section 47). Many SMEs use their company secretary's address.; Related: Company secretary services · SSM
Royal Malaysian Customs Department Jabatan Kastam Diraja Malaysia #: The federal agency responsible for indirect taxes in Malaysia, including Sales and Service Tax (SST), customs duties and excise duties. RMCD runs MySST, the portal where businesses register for SST and file the SST-02 return. MySST is separate from LHDN's MyTax, which handles income tax.; Also known as: RMCD, Customs, Kastam; Source: customs.gov.my

S

5 terms

Sales and Service Tax #: Malaysia's indirect tax regime, introduced in 2018 to replace GST. Sales Tax is charged on taxable goods manufactured in or imported into Malaysia, mainly at 5% or 10%. Service Tax is charged on prescribed taxable services at 8%, or 6% for food and beverage, telecommunications, parking and logistics services. From 1 July 2025 the service tax scope was expanded to rental and leasing, construction, financial services, private healthcare, education and beauty services. Service tax is reported every two months on the SST-02 return.; Also known as: SST; Related: SST-02 · SST-02 reporting · SST-02 step-by-step guide; Source: MySST service tax FAQ (RMCD)
Service Tax #: The tax charged on prescribed taxable services under the Service Tax Act 2018, administered by RMCD. The standard rate is 8%; food and beverage, telecommunications, parking and logistics services are taxed at 6%. Professional services such as accounting, auditing, legal, consultancy and engineering are Group G taxable services, and a provider must register once the value of its Group G services exceeds RM500,000 over 12 months. Service tax is reported every two months on the SST-02 return, filed on MySST.; Also known as: Service Tax; Related: SST-02 · RMCD; Source: MySST: registering a business (RMCD)
SOCSO Pertubuhan Keselamatan Sosial (PERKESO) #: Malaysia's social security organisation. SOCSO runs the Employment Injury Scheme and the Invalidity Scheme under the Employees' Social Security Act 1969, and also administers EIS. For most employees, the employer contributes 1.75% and the employee 0.5% of monthly wages, based on PERKESO's contribution table and a wage ceiling of RM6,000 since 1 October 2024. IntBooks calculates SOCSO in every payroll run and exports the contribution file for PERKESO's ASSIST portal.; Also known as: SOCSO, PERKESO; Source: PERKESO contribution rates
SST-02 #: The service tax return that every business registered for service tax files with RMCD on MySST. Each return covers a two-month taxable period and is due by the last day of the following month (for example, the January–February return is due by 31 March). It must be filed even when no tax is payable. IntBooks prepares the SST-02 figures from your posted transactions for you to file on MySST.; Related: SST · SST-02 reporting · SST-02 step-by-step guide; Source: MySST (RMCD)
Statutory Audit #: An audit of a company's annual financial statements required by the Companies Act 2016: section 267 requires every private company to appoint an auditor for each financial year. Under SSM Practice Directive 10/2024, a private company is exempt if it meets at least two of three tests (revenue, total assets, employees) in the current and previous two financial years; the thresholds rise to RM3 million, RM3 million and 30 employees for financial periods from 1 January 2027. Dormant companies are also exempt. The audit is done by an approved company auditor (section 263), whose report accompanies the financial statements lodged with SSM.; Related: Audit services · Choosing an audit firm; Source: SSM Practice Directive 10/2024

T

3 terms

Tax Agent #: A person recognised under section 153 of the Income Tax Act 1967 to act for taxpayers in their tax affairs, such as preparing and submitting returns and dealing with LHDN. Under section 153(3), tax agents are professional accountants authorised to audit companies, or other people approved by the Minister of Finance. A company can also submit its own Form C electronically; it does not have to use a tax agent.; Related: Tax filing services · LHDN; Source: hasil.gov.my
Tax Identification Number TIN #: The number LHDN assigns to each taxpayer, including individuals, companies, partnerships and trusts. Both the supplier's and the buyer's TIN are mandatory on every e-invoice. Individual TINs now start with IG, replacing the older OG and SG prefixes. Non-individual TINs start with a letter prefix such as C for companies. LHDN uses the TIN to match each e-invoice to the right taxpayer record.; Also known as: TIN; Related: MyInvois; Source: MyInvois SDK FAQ (LHDN)
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, such as royalties, interest, contract payments, technical and other service fees, and rental of movable property. The rate and the payment deadline depend on the type of payment and any applicable tax treaty, so check LHDN's withholding tax pages before you pay. IntBooks records withholding tax entries against supplier bills in the accounts payable module.; Related: LHDN