One client told me:
“Don’t worry, once I get my tax refund from LHDN, I will settle your invoice.”

I smiled, but deep inside… I wanted to say:
“Boss, nowadays, tax refunds are not so fast. Better don’t plan your cash flow like that.”

Many SMEs still believe refunds come within:
30 working days via e-Filing
90 working days for manual submission

But in reality, most refunds don’t follow this timeline.

Lately, we see LHDN pay refunds in stages:
Less than Year 1: Only 5%
Year 1, 2 & 3: Another 10% each
Year 4: The balance 65%

It can take four years to get your full refund.

The reason? Malaysia’s tax system forces businesses to pay based on profit estimates. Even if your business slows down, you still must pay 85% of last year’s tax for the first six months. Overpayments are common, but refunds take time.

My advice?

Don’t overpay just to be “safe.”
Cash stuck with LHDN is not helping your business.

Read the full story in our blog
https://lnkd.in/gGcpQHXm

PS : This article is inspired by insights shared by Thannees Tax Consulting Services Sdn Bhd managing director, SM Thanneermalai. in the Sun Newspaper on 30/6/2025.