Do I (legally) need a tax agent?
- Chow Ping
- 2 days ago
- 4 min read
Here's the short answer: No, you don't legally need one.
Malaysian companies can file their own taxes through e-Filing. You can do it yourself if you want to.
But here's the longer, more honest answer:
Just because you CAN do something doesn't mean you SHOULD.
You can technically pull out your own tooth with pliers and YouTube tutorials. Legal? Sure. Smart? Probably not.
The same logic applies to filing your company taxes without a tax agent.
So let's talk about what happens when you go solo — and why most businesses don't.
What is a tax agent?
A tax agent in Malaysia is someone LHDN officially trusts to handle your tax matters.
They're licensed professionals approved under Section 153 of the Income Tax Act 1967.
Think of them as your official representative to LHDN who can legally sign and submit tax returns on your behalf.
Here's what they actually do:
Prepare tax computations
File company tax returns (Form C)
Provide tax planning and advisory
Communicate with LHDN on your behalf
Handle tax audits or investigations
Respond to LHDN queries and notices
Your tax agent is basically your go-between with LHDN. They speak the language. They know the rules. And they make sure you don't accidentally step on any landmines.
Is a tax agent an accountant?
Sometimes yes, sometimes no.
Most tax agents in Malaysia ARE accountants by training. BUT not all accountants are tax agents.
To become a tax agent, you need to:
Be registered with the LHDN Tax Agent Licensing Committee
Be approved under Section 153 of the Income Tax Act 1967
Hold relevant qualifications and experience
Think of it this way:
Accountant = The profession (includes audit, bookkeeping, management accounting, and more)
Tax agent = A licensed role with legal authority to represent you in tax matters
Here's an analogy: All doctors went to medical school, but only surgeons can operate on you. Similarly, all tax agents know accounting, but only licensed tax agents can officially represent you to LHDN.
Not sure if you're overpaying taxes right now? Use our Are You Overpaying Taxes checklist to find out now.
Is a tax agent and a tax accountant the same thing?
Not exactly.
Tax Accountant: Someone who understands tax and prepares tax calculations. They might work inside your company or at an accounting firm.
They can give you tax advice and help you understand your numbers. But they cannot legally sign or submit tax returns on your behalf unless they also hold a tax agent license.
Tax Agent: Does everything a tax accountant does, PLUS:
✓ Can sign tax returns
✓ Can represent you during audits
✓ Can communicate with LHDN officially
✓ Can submit tax filings in your name
All tax agents do tax accounting work — but not all tax accountants are tax agents.
How much does it cost to hire a tax agent?
Let's talk money. Will you need to sell a kidney? Answer: No.
Fees vary depending on your company's size, complexity, and how much work is involved.
For SMEs (typical market ranges):
Handling a full tax audit: RM3,000 – RM20,000+
Tax planning advisory: RM300 – RM800 per hour
Tax computation + submission: RM800 – RM2,500
Company annual tax filing (Form C): RM1,200 – RM3,000
Responding to LHDN queries: RM300 – RM1,000 per letter
For micro-businesses / dormant companies:
Dormant company tax submission: RM300 – RM800
So why do most companies still hire a tax agent?
Remember: you're not legally required to hire one. But there's a reason why most businesses do anyway.
1. LHDN holds YOUR company fully liable for mistakes
Even if your internal staff files the tax return, the company is responsible for errors, missing information, late filings, underpayment penalties, interest charges, and non-compliance. A tax agent minimises these risks because they must follow LHDN standards.
When they sign your tax return, they're putting their license on the line.
2. Corporate tax rules change constantly
Malaysia updates tax rules frequently. Every year's Budget brings changes.
Then there are Public Rulings, RPGT adjustments, new incentives, exemptions that expire.
Most business owners don't have the time to keep up with all of this. Your tax agent does. It's literally their job.
3. Only a tax agent can legally represent you to LHDN
Without a licensed tax agent, you have to deal with LHDN yourself.
That means decoding their queries, preparing responses, attending meetings or audits, negotiating penalties, and appealing decisions.
With a tax agent, they handle all of this on your behalf.
4. Incorrect filings can trigger audits
LHDN has systems that flag returns with red flags like mismatched numbers, missing schedules, wrong deductions, errors in capital allowance calculations, and transfer pricing mistakes.
Professional tax agents know how to file returns that minimise red flags. They structure your submissions properly and include the right documentation.
In other words…
✔️ Legally: You can file taxes yourself.
❌ But: You are not protected if something goes wrong.
✔️ Hiring a tax agent is optional but highly recommended, especially for Sdn Bhds.
You started a business to build something, not to become a tax expert. Every hour you spend trying to decode LHDN forms is an hour you're not spending on growing your revenue, serving your customers, or actually enjoying your life.
A good tax agent doesn't just file your forms. They help you structure your business for tax efficiency. They spot opportunities you didn't know existed. They protect you from expensive mistakes.
At Douglas Loh & Associates, we're tax agents. But more importantly, we're your strategic partners in keeping more of what you earn. With 32 years of experience, we've seen (and fixed) every tax mistake imaginable.
Want to tap into our expertise?
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