Understanding Certificate Of Residence (COR)

A Certificate of Residence (COR) is a document issued by the Inland Revenue Board of Malaysia (LHDN) that certifies a company as a tax resident in Malaysia. This certification helps businesses access tax relief and benefits under Malaysia’s Double Taxation Agreements (DTAs) with other countries. DTAs are agreements designed to prevent businesses and individuals from being taxed twice on the same income in different countries. Depending on the terms of a specific DTA, benefits can include reduced withholding tax rates, tax exemptions, or tax credits.

To qualify for a COR in Malaysia, a company must meet certain conditions. These generally include being managed and controlled in Malaysia and having the income in question derived or accrued in Malaysia. The company must also be the beneficial owner of the income, which means it has the right to use and enjoy that income. Holding companies may need to provide additional evidence to demonstrate effective management within Malaysia.

The application process for a COR in Malaysia is straightforward and carried out through the LHDN’s e-Resident platform. Companies can apply for the current assessment year or previous years retrospectively, typically up to three years. Once the application is submitted, processing usually takes around 14 working days. After approval, the COR can be downloaded directly from the LHDN portal or obtained in hard copy.

This document is essential for international businesses, as it helps minimize tax liabilities and foster smoother international transactions. If you’re conducting business in Malaysia, understanding the COR and its benefits is vital for optimising your tax obligations and compliance.