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Tax Credit Set-Off in Malaysia

Net operating losses

The current year’s business losses can be offset against all sources of income in the current year. It is only possible to utilize carried-forward losses on business income. The use of capital allowances is also limited to income derived from the same underlying business.
An unutilized loss in a given year of assessment can only be carried forward for a maximum period of ten consecutive years, while an unabsorbed capital allowance may be carried forward indefinitely.

Carryforwards of business losses and capital allowances are not available for deduction in subsequent years of assessment if the company is dormant.

It is currently not possible to carry back losses to prior years of assessment.

If a person is making a taxable supply in Malaysia and meets the following criteria, he or she may be entitled to an input tax refund:

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