KTP & Company PLT

“Boss, my LLP distributed RM150,000 profit to me.
First RM100,000 exempt.
So 2% on RM50,000.
Tax is RM1,000, correct?”

The tax agent opened P.U.(A) 278/2026.
“Boss…not necessarily. We need A, B and C.”

“I asked about tax.
Why suddenly become maths exam?”

😂😂😂

From YA 2026,
an individual partner receiving LLP profit exceeding RM100,000 may fall under the new 2% tax treatment.

The profit can be:

✅ Paid.
✅ Credited.
✅ Distributed.
✅ In cash or in kind.

Boss, notice the word “credited”.
The money does not need to enter your bank account first.

More importantly, RM100,000 is a threshold.
It is not an automatic deduction.

The LLP chargeable income is calculated using:
A ÷ B × C.

Where :
A is your LLP statutory profit income.
B is your total aggregate income.
C is your total chargeable income.

Example:
A: RM150,000.
B: RM250,000.
C: RM220,000.

LLP chargeable income:
RM150,000 ÷ RM250,000 × RM220,000 = RM132,000.
Tax at 2% = RM2,640.
Not RM1,000.

😅😅😅

The 2% rate looks small.
The formula is not.

P.U.(A) 278/2026 applies from YA 2026.
Calculate before you distribute.
Not when LHDN asks.

Read the full content in our blog
https://www.ktp.com.my/blog/llp-subject-to-2-profit-sharing/19aug2026

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I’m Koh Teck Peng

Welcome to my blog, I’m the founder and principal of KTP & Company PLT. My journey in the accounting profession has been driven by a passion for numbers and a dedication to helping businesses succeed. With over 25 years of experience, I’ve had the privilege of working with a wide range of clients, from small startups to large corporations, providing them with the financial insight and strategic guidance they need to thrive.

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