Closing the Door Properly: IRB Operational Guideline No. 3/2026 on Tax Clearance Letters

01An Overview of SPC

You built the company. You ran it for years. Now the business has run its course, and you want to close the door.

Most directors assume this is an SSM exercise. File the papers, wait for the gazette, done.

It is not. Before the Registrar lets your company go, HASiL wants to be sure it has collected every ringgit it is owed. That confirmation comes in one document: the Tax Clearance Letter, or Surat Penyelesaian Cukai (SPC).

On 20 October 2026, HASiL issued Garis Panduan Operasi (GPO) Bil. 3/2026, which resets the rules for how companies, LLPs and Labuan entities apply for that letter. If you are winding up, striking off, merging or converting to an LLP in the coming months, this is the guideline that now governs your exit.

02What GPO 3/2026 is, and who it covers

GPO 3/2026 took effect on 20 October 2026 and revokes the previous Operational Guideline No. 1/2022 dated 24 May 2022 (para 10). It sets out how an entity applies for an SPC before it is dissolved by its registrar.

The purpose is stated plainly in para 2.1: the SPC is HASiL's confirmation that all of the entity's tax affairs have been settled before dissolution.

The guideline applies to three groups, collectively called the "Entiti Berkenaan" (para 1.1 to 1.4):

• Companies, including companies limited by guarantee (SBMJ) approved under Section 44(6) ITA 1967 and registered with an F file.
• Limited liability partnerships (LLPs).
• Labuan entities, covering the 12 types defined under the Labuan Business Activity Tax Act 1990, plus Labuan companies taxed as chargeable offshore companies under Sections 2 and 3B ITA 1967.

Individuals are outside this guideline. Individual SPC applications sit under a separate guideline, GPO 2/2024.

03The 14 working day promise has conditions

HASiL's Client Charter commits to issuing an SPC within 14 working days of receiving the application (para 2.2). Many directors stop reading there.

Read on. The 14 days only apply when all five criteria in para 2.3 are met:

1. The application form and supporting documents are complete.
2. Return forms and employer returns (Form E and C.P.8D) are filed up to the latest year of assessment or year of remuneration, even if the entity is dormant.
3. All prior year audit actions are resolved.
4. Any compound, prosecution or civil case is settled.
5. All tax payable up to the latest year of assessment is fully paid.

Miss any one, and para 2.4 states the 14 day timeline no longer applies. In practice, an open tax audit or an unpaid CP204 balance can hold up your dissolution for months.

Para 6 then lists when the SPC will actually be issued: returns received, assessments raised or deemed up to the SPC year, employer returns processed, audits or investigations closed, a zero balance on the income tax, RPGT and Labuan tax ledgers, and no pending criminal or civil action.

04"Dormant" is narrower than you think

The guideline defines a dormant entity in para 2.5.1. It covers an entity that never operated, one that has ceased business, or one with no significant transactions in the financial year before a change of 50% or more in its equity ownership.

The only entries allowed in a dormant entity's books are minimum statutory costs: annual return filing, company secretarial fees for that filing, tax filing fees, statutory audit fees and accounting fees.

Here is the trap. Para 2.5.2 says an entity is not dormant if it holds shares, real property, fixed deposits or similar investments, including any rent, interest or similar income from them.

So the "dormant" holding company that still owns a shophouse or keeps a fixed deposit is, in HASiL's eyes, an active taxpayer. And dormant or not, para 2.5.3 is clear: returns must still be filed until the entity is fully dissolved.

05Which form, and which channel

Since 1 January 2024, SPC applications must go through e-SPC (para 2.6.1). Table 3 of the guideline maps each situation to its form:

A company, including an SBMJ, uses Form CP7(C) for members' or creditors' voluntary winding up, court winding up, a foreign company ceasing business, an amalgamation or a conversion to LLP. A company being struck off uses Form CP7 instead. Both go through e-SPC, with the supporting documents listed in Appendix 3A.

An LLP uses Form CP7(PT) for voluntary or court winding up, or where a foreign LLP ceases or dissolves. It also goes through e-SPC, with documents listed in Appendix 3B.

A Labuan entity, including one taxed under ITA 1967, uses Form CP7(LE). This is still a paper application, sent with the documents in Appendix 3C to the Labuan International Section, HASiL Sabah.

Two channel gaps remain. Labuan entities and SBMJs still file paper applications because e-SPC is not yet available for them (para 2.6.1). And e-SPC for SBMJs, LLPs and Labuan entities through the tax agent e-Filing system (TAeF) is not yet available, so those go manual until HASiL announces otherwise (para 2.6.2 and 2.6.3).

Every CP7 form carries a declaration. A false statement can lead to prosecution under Paragraph 113(1)(b) ITA 1967, with a fine of RM1,000 to RM10,000 and a special penalty of double the tax undercharged. Whoever signs, whether director, liquidator or tax agent, should check the facts before signing.

06Timing matters in three special situations

Winding up (para 4.1.1). Apply for the SPC before the final Liquidator's Account of Receipts and Payments and Statement of the Position in the Winding Up under Section 514(1) Companies Act 2016 is prepared. If a new liquidator is appointed and assets remain unrealised, no SPC application is needed yet. And under Section 75(2) ITA 1967, the liquidator cannot distribute assets to shareholders until the tax is paid.

Amalgamation under Section 370 Companies Act 2016 (para 4.1.2). On the vesting date, assets, liabilities, rights and obligations pass to the transferee company. The transferor must apply for its SPC before the vesting date stated in the court's vesting order. Example 1 in the guideline shows a transferor with a 31 May year end and a 1 June 2026 vesting date filing Form C up to YA 2026.

Converting a company to an LLP (para 4.1.3). Apply for the SPC before the conversion is registered with SSM, submit the SPC to SSM for the conversion, then apply to close the company's tax file once conversion is complete. Example 2 shows the company filing Form C for a short final basis period ending the day before conversion, with the new LLP filing Form PT from the next year of assessment.

The common thread: the SPC comes first. Leave it to the end, and the corporate timetable stalls.

07Every return, up to the SPC year

Returns must be filed for every year of assessment and year of remuneration up to the SPC year (para 5.1). The employer return for the SPC year is required even if the remuneration period is under 12 months (para 5.8).

The guideline also brings MITRS into the exit process. From YA 2025, under Section 82B ITA 1967 (or Section 22EB LBATA 1990 for Labuan entities), the entity must submit the information and documents used to determine chargeable income through MITRS within 30 days after the return's due date (para 5.2).

What if e-Filing for the SPC year is not yet open? Para 5.9 to 5.11 allow a paper Form C, PT, LE, TF or E marked "for SPC purposes only", made by amending the prior year's form. Once the e-Form is available, it must be used instead.

Ideally, final year income is reported on audited financial statements. Where those cannot be prepared for the year of dissolution, para 5.6 allows substitutes. Winding up cases use the Section 514(1) liquidator's account, which is still required even if the winding up took less than six months. Striking off, foreign company cessation, amalgamation and conversion cases use the last financial statements prepared under any written law.

08Your payroll obligations follow you out

If the entity has employees, para 3.2 adds employer duties that must be clean before an SPC is processed:

• Remit MTD under Rule 3 or Rule 4 of the Income Tax (Deduction from Remuneration) Rules 1994 [P.U.(A) 507/1994], and clear any MTD arrears.
• File Form E up to the SPC year.
• Notify the DGIR of employees ceasing employment or who have died, under Section 83(3) ITA 1967 (Form CP22A or CP22B).
• Notify the DGIR of employees leaving Malaysia for more than three months, under Section 83(4) ITA 1967 (Form CP21).
• Withhold monies payable to those employees for 90 days from HASiL's receipt of the notification, or until the employee's tax clearance is received, under Section 83(5) ITA 1967.

This is where closures often stumble. A company lays off its staff, pays final salaries and compensation in full, and only later remembers CP22A. The withholding window has passed, and the company has a compliance gap on file just as it applies for clearance.

09The SPC is not the finish line

Getting the letter feels like the end. It is not.

Under para 3.3, the entity must keep filing returns until it is fully dissolved and its tax file status is closed. The one exception is dissolution by striking off.

Once dissolution is complete, someone must apply to the handling HASiL branch to update the file status (para 3.4 and para 8), with registrar documents listed in Appendix 4. For an SSM company that means items such as the company status confirmation letter, the latest company profile, or the Section 308/550 status. For an LLP, it includes the Notice of Completion of Distribution (VW107).

Skip this step, and the dissolved company's file can sit open, with filing obligations still showing against an entity that no longer exists.

10Sources

• Garis Panduan Operasi Bil. 3/2026: Permohonan Surat Penyelesaian Cukai Bagi Syarikat, Perkongsian Liabiliti Terhad dan Entiti Labuan, LHDNM, 20 October 2026
• LHDNM Operational Guidelines listing, HASiL official portal

11Disclaimer

This article is general information on Malaysian tax administration as at the date of publication. It is not tax or legal advice for any specific person or entity. Seek professional advice on your own facts before acting.