HASiL has replaced its operational guideline on tax clearance letters for companies, limited liability partnerships (LLPs) and Labuan entities. The new guideline, Garis Panduan Operasi 3/2026, took effect on 20 October 2026 and was announced on HASiL’s portal on 27 October. It revokes the previous guideline, GPO 1/2022, dated 24 May 2022.
A tax clearance letter, or Surat Penyelesaian Cukai (SPC), is HASiL’s confirmation that an entity’s tax affairs have been settled before the registry dissolves it. If you are winding up a company, striking one off, or converting a Sdn Bhd into an LLP, this guideline now sets the order of steps on the tax side.
What is new, and what is not
The 2022 guideline listed six dissolution routes for a company: members’ voluntary winding up, creditors’ voluntary winding up, winding up by court order, cessation of business by a foreign company, striking off, and cancellation of a dormant company. It did not mention conversion to an LLP or a restructuring and amalgamation under section 370 of the Companies Act 2016.
The 2026 guideline adds both, each with its own steps. It also:
- defines when an entity counts as dormant
- states that applications through e-SPC have been mandatory since 1 January 2024
- reminds entities of the duty, from year of assessment 2025, to provide information and documents through the Malaysian Income Tax Reporting System (MITRS) within 30 days after the return deadline
Some things have not changed. The 14 working day service charter, the conditions attached to it, the application forms CP7(C) and CP7, and the declaration on the form were all in the 2022 version.
Converting a Sdn Bhd to an LLP
Paragraph 4.1.3 sets three steps:
- Apply for the SPC before the conversion is made at SSM.
- Give the SPC to SSM for the conversion.
- After the conversion is complete, apply to close the company’s tax file.
SSM has its own conditions for converting a private company. Its conversion page says the application must state that, at the application date, the company appears able to pay its debts as they fall due, and that “all outstanding statutory fees or any amount owing to any government agency has been settled”. The company must also have advertised its intention to convert in at least one widely circulated newspaper and published a notification in the Gazette, and all creditors and all shareholders must agree to the conversion. SSM’s fee for the conversion is RM500.
On the tax side, the company files Form C up to the last year of assessment before the conversion, subject to the SPC application date and the date the conversion is registered (paragraph 5.5). The guideline’s own example: Syarikat Maju Sdn. Bhd., with a 31 August year end, registered its conversion to Maju Jaya PLT on 3 July 2025 and applied for its SPC before that date. The company filed Form C up to year of assessment 2025, with a basis period of 1 September 2024 to 2 July 2025. The LLP files Form PT from year of assessment 2026, with a basis period of 3 July 2025 to 31 August 2026.
Where audited financial statements cannot be prepared for the year of dissolution, a converting company reports its income using its last financial statements prepared under any written law (Table 5).
When the company applies to close its tax file, the list of registry documents HASiL accepts includes SSM’s Certificate of Registration on Conversion (Appendix 4). SSM’s page says it issues only a notice of conversion, and a certificate of registration of LLP only on request with the prescribed fee.
Before any SPC application
Paragraph 2.3 sets five conditions for the 14 working day charter:
- The application form and supporting documents are complete.
- Tax returns and employer returns (Form E and Form CP8D) have been filed up to the latest year, even if the entity is dormant.
- Any audit for earlier years has been concluded.
- Any compound, prosecution or civil case has been settled.
- Tax payable up to the latest year of assessment has been paid in full.
If any one is not met, the 14 working day charter does not apply (paragraph 2.4).
Paragraph 2.5 defines a dormant entity. An entity is dormant if it has never operated, if it has stopped operating, or if it had no significant account transactions in the financial year before a change of 50% or more in its shareholding, other than minimum statutory costs such as the annual return, secretarial, tax filing, audit and accounting fees. An entity that holds shares, property, fixed deposits or similar investments, including any rent or interest from them, is not dormant (paragraph 2.5.2). A dormant entity must still file its tax returns until it is fully dissolved (paragraph 2.5.3).
Paragraph 3.2 requires the entity, as employer, to:
- remit monthly tax deductions (PCB) and clear any arrears
- file Form E up to the year of the SPC application
- notify HASiL when employment ceases or an employee dies (Form CP22A or CP22B)
- notify HASiL of any employee leaving Malaysia for more than three months (Form CP21)
- withhold money due to the employee for 90 days from HASiL’s receipt of the notification, or until the employee’s SPC is received, under section 83(5) of the Income Tax Act 1967
Winding up
A company in liquidation applies for its SPC before the liquidator’s final account of receipts and payments and statement of the position in the winding up under section 514(1) of the Companies Act 2016 are prepared. The liquidator may not distribute any of the company’s assets to shareholders until the tax is paid, under section 75(2) of the Income Tax Act 1967 (paragraph 4.1.1).
After the SPC is issued
The SPC does not close the tax file. The entity must keep filing tax returns until it is fully dissolved and its tax file has been closed, unless it is dissolved by striking off (paragraph 3.3). Once it is dissolved, it applies to the HASiL state or branch office handling its file to update the file status, with the registry documents listed in Appendix 4 (paragraph 3.4 and section 8).
How to apply
Companies apply through e-SPC on MyTax. Form CP7(C) covers winding up, cessation of business by a foreign company, restructuring and amalgamation, and conversion to an LLP. Form CP7 covers striking off. Labuan entities still apply on paper, because e-SPC is not yet available for them.
The form carries a declaration. A person who gives incorrect information may be prosecuted under paragraph 113(1)(b) of the Income Tax Act 1967 and, on conviction, fined RM1,000 to RM10,000 and required to pay a special penalty of twice the tax undercharged.
What to do now
If you plan to convert a Sdn Bhd to an LLP: apply for the SPC before you lodge the conversion with SSM. In HASiL’s example, the company’s last basis period ends the day before the conversion date, and the LLP’s first begins on it.
If you are closing a dormant company: check it against the definition in paragraph 2.5. A company that holds shares or property is not dormant for this purpose, and its returns must be up to date before it applies.
If the company has staff: settle PCB, file Form E, and lodge CP22A or CP21 for each departing employee before you apply.
If the company is in liquidation: apply before the liquidator’s final accounts are prepared, and make no distribution to shareholders until the tax is paid.
After clearance: keep filing until the company is dissolved, then apply to close the tax file.
If you are planning to close or convert a company and want the tax and SSM steps lined up, we can work through the sequence with you.
Sources: HASiL, Garis Panduan Operasi Permohonan Surat Penyelesaian Cukai Bagi Syarikat, Perkongsian Liabiliti Terhad dan Entiti Labuan, GPO 3/2026, effective 20 October 2026; HASiL, GPO 1/2022, 24 May 2022; HASiL announcement of 27 October 2026; HASiL e-Perkhidmatan page; SSM, Conversion of Limited Liability Partnership page. This article is general information current as at 3 November 2026 and is not tax or legal advice.