Closing a Company Does Not End With the Tax Clearance Letter

A Tax Clearance Letter is LHDN's confirmation that a company's tax matters have been settled before the company is dissolved. Many business owners treat it as the final step in closing a company. Under LHDN's latest operational guideline, effective 20 October 2026, two more things still need to be done.

The first is to keep filing tax returns. Getting the Tax Clearance Letter does not mean the company has been dissolved. Until the company is fully dissolved and its LHDN tax file has been closed, it must continue to submit its tax returns. So if a winding up takes another year or two, the tax returns for those years are still due. The only exception is a company dissolved by being struck off.

The second is to apply to update or close the tax file. Once the company is fully dissolved, an application must be made to the LHDN office or branch that handles the company's income tax file. Supporting documents from the registrar must be attached. For a company registered with SSM, these can include the company status confirmation letter from SSM and the latest company profile, depending on how the company was dissolved. The same applies to LLPs and Labuan entities, although the documents and registrar are different.

Neither step is complicated, but both are easy to miss when the Tax Clearance Letter is seen as the finish line.

If you wish to focus on running and growing your business, our CFO advisory team can take care of your accounting, payroll, tax planning, e-stamping, corporate secretarial and compliance matters for you. Feel free to WhatsApp us at 010-246 2151.