Borang B vs Borang BE Malaysia 2026 — Which Form Do You File?
Not sure whether to file Form B or Form BE for YA 2025? This guide explains exactly who files which form, the different deadlines (April 30 vs July 15), what expenses Form B allows you to deduct, and how to avoid costly mistakes.
Quick Answer: Which Form Do You File?
Who Files Form B vs Form BE — Complete Guide
| Your Situation | Form to File | Key Reason |
|---|---|---|
| Salaried employee, no side income | Form BE | Employment income only |
| Salaried employee + freelance income | Form B | Any business income = Form B, full stop |
| Full-time freelancer (no employment) | Form B | All income is business income |
| Registered sole proprietor (SSM EJM/EIP) | Form B | Business income regardless of amount |
| Grab / AirAsia Ride / Lalamove driver | Form B | LHDN classifies e-hailing as business income |
| Freelance tutor, online teacher | Form B | Professional income = business income |
| Director of Sdn Bhd receiving director fees | Form B | Director fees are Section 4(b) income |
| Commission-based insurance agent | Form B | Commissions = business income |
| Landlord with rental income | Form BE* | *Rental = Section 4(d), declared in Form BE unless run as a business |
| Investor with dividend income only | Form BE | Dividends are exempt income (single-tier); declared but not taxed |
*Exception: If you provide hotel-like services (serviced apartment, frequent Airbnb with services), LHDN may reclassify rental income as business income — in which case you need Form B.
Filing Deadline: Form B vs Form BE (YA 2025)
Form B filers get 2.5 extra months compared to Form BE. If you realise after May 15 that you should be filing Form B instead of Form BE, you still have until July 15 to file correctly.
Form B vs Form BE: 6 Key Differences
| Feature | Form BE | Form B |
|---|---|---|
| e-Filing deadline | 15 May 2026 | 15 July 2026 |
| Income types covered | Employment only | Employment + Business/Professional |
| Business expense deductions | ✗ Not available | ✓ Home office, equipment, software, travel |
| Capital allowances | ✗ Not available | ✓ For business assets (laptop, camera, tools) |
| CP500 instalments | ✗ Not applicable | Applies from 2nd year of business income |
| Complexity | Simpler — most fields auto-fill from EA Form | More complex — requires business income and expense calculation |
The added complexity of Form B is offset by its advantages: you can legally reduce your taxable income through business expense deductions that Form BE does not allow. A freelancer earning RM 60,000/year who deducts RM 10,000 in legitimate business expenses only pays tax on RM 50,000 — a significant saving.
What Business Expenses Can Form B Filers Deduct?
Under Section 33 ITA 1967, Form B filers can deduct expenses "wholly and exclusively incurred in the production of income." Key qualifying expenses:
| Expense | Deductible? | Notes |
|---|---|---|
| Laptop / computer | ✓ Capital allowance | 20% initial + 40% first-year allowance + 20%/year subsequent |
| Home office | ✓ Proportional | Room area ÷ total home area × rent/utilities |
| Internet subscription | ✓ Work portion | If used partly for work, claim proportional amount |
| Software subscriptions | ✓ Yes | Adobe, Notion, Slack, AWS, Figma, etc. |
| Accounting / tax agent fees | ✓ Yes | Cost of having your Form B prepared |
| Co-working space | ✓ Yes | Full monthly membership fees |
| Business travel | ✓ Client meetings | Not daily commute; client visits and business trips |
| Professional development | ✓ Yes | Courses, books, conferences relevant to your work |
| Personal meals | ✗ No | Not deductible — even if you work while eating |
| Car (personal use) | ✗ Mostly no | Pure business-use vehicles only; mixed-use not deductible |
3-Step Test: Which Form Do YOU Need?
- 1Did you receive ANY income from self-employment, freelancing, or running a business in 2025? This includes: one-off freelance projects, selling handmade goods, Grab/GrabFood driving, tutoring students, commission from insurance sales, Airbnb rentals run as a service. If YES → File Form B.
- 2Are you a registered sole proprietor (EJM or EIP at SSM) or a partner in a business partnership? If YES → File Form B. Even if you made no profit this year, having an active sole proprietorship means you have a business income section to declare (RM 0 if necessary).
- 3Did you receive director's fees from a company where you are a shareholder-director? If YES → File Form B. Director's fees paid by an Sdn Bhd to its director are Section 4(b) income (business/professional income), not employment income — even if you also draw a salary from the company.
If you answered NO to all three: file Form BE. If you answered YES to any one: file Form B.
What Is CP500 and Does It Apply to You?
CP500 is LHDN's instalment payment scheme for self-employed individuals and business owners. Once you file Form B for the first time and pay tax, LHDN issues a CP500 notice for the following year requiring 6 bi-monthly tax instalments:
| Instalment | Due Date | Amount |
|---|---|---|
| 1st | 31 January | Prior year's tax ÷ 6 (equal instalments) |
| 2nd | 31 March | |
| 3rd | 31 May | |
| 4th | 31 July | |
| 5th | 30 September | |
| 6th | 30 November |
If your income dropped significantly, apply to reduce CP500 using Form CP502 before the 2nd instalment. If you underpay by more than 30% of actual tax, a 10% late payment surcharge applies. First-time Form B filers have no CP500 in year 1 — you pay all tax when you file by July 15.
Malaysia Tax Planner 2026 — Built for Form B Filers
Track all 24 reliefs + business expenses + calculate your Form B tax liability across 6 tabs. Self-employed income, CP500 estimation, freelancer deductions. One Excel, all years.
Download Malaysia Tax Planner — RM 42 →How to File Form B via MyTax e-Filing
- 1Log in at mytax.hasil.gov.my using your MyTax ID (previously e-Daftar ID) and password.
- 2Select e-Filing → Borang BE/B. If you have business income, the system should prompt you to select Form B. If it defaults to Form BE, select the correct form before proceeding.
- 3Complete Part B (Business Income): enter gross receipts, total allowable expenses, and net business income. Keep receipts for 7 years — LHDN can audit any return within 5 years of filing.
- 4Complete Part C (Employment Income) if you also have a salaried job. Use your Form EA from your employer to fill in the employment income and PCB deducted.
- 5Claim all applicable reliefs in Part G: EPF (up to RM 4,000), lifestyle (RM 2,500), spouse, children, medical, education, and others. The Tax Planner above pre-calculates your optimal relief combination.
- 6Review the tax computation: chargeable income, tax payable, rebates (RM 400 if income ≤ RM 35,000), and any CP500 instalments already paid.
- 7Pay any balance owing via ByrHASiL (JomPAY biller code 04000), FPX, or credit card (0.5% fee). Deadline: 15 July 2026.
5 Common Mistakes When Filing Form B
| Mistake | Consequence | How to Avoid |
|---|---|---|
| Filing Form BE when you have business income | Section 113 penalty (100–300% of undercharged tax) | Any side income = use Form B, no exceptions |
| Not deducting eligible business expenses | Overpaying tax by thousands of RM annually | Track every business expense; use the Tax Planner above |
| Ignoring CP500 instalments | 10% surcharge on underpaid amount | Pay all 6 instalments on time; apply CP502 if income dropped |
| Mixing personal and business bank accounts | Cannot substantiate expense claims during audit | Open a separate bank account for all business transactions |
| Not declaring overseas freelance income | Risk of audit; exemption is under review post-2026 | Declare under "exempt income" — don't omit entirely |
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What is the difference between Borang B and Borang BE in Malaysia?
Borang BE (Form BE) is for individuals with employment income ONLY — salaried employees who have no business, freelance, or professional income whatsoever. Borang B (Form B) is for individuals who have any business income, including freelancers, sole proprietors, Grab drivers, tutors, commission-based agents, and directors of their own Sdn Bhd receiving director's fees. The key rule: if even RM 1 of your income comes from self-employment or running a business, you file Form B — not Form BE. If you file the wrong form, LHDN can treat it as a non-submission and apply penalties under Section 112 ITA 1967.
What is the Form B deadline in Malaysia 2026?
For YA 2025 (tax year 2025), the Borang B (Form B) deadlines are: 30 June 2026 for manual submission by post, and 15 July 2026 for online e-Filing via MyTax. This gives Form B filers 2.5 months more than Form BE filers (whose deadline is April 30 / May 15). If you realise after April 30 that you should have filed Form B instead of Form BE, you can still file on time as a first-time Form B filer — contact LHDN to clarify your situation before filing.
If I have both a salary and freelance income, which form do I use?
You file Form B — not Form BE. The rule is absolute: any business or professional income triggers Form B, regardless of how small it is compared to your salary. For example, if you earn RM 8,000/month from your job and RM 500/month from tutoring on weekends, you file Form B and declare BOTH your employment income (under Part C) and your tutoring income (under Part B, Business Income). You cannot separate the incomes across two different forms — all income is declared together in Form B.
Do I need to register SSM (ROB/ROC) to file Form B?
No — SSM registration is not a prerequisite for filing Form B. Unregistered freelancers (e.g., a freelance designer invoicing clients without a registered business) still have 'business income' for tax purposes and must file Form B. SSM registration becomes legally required when your business name is branded (e.g., 'XYZ Design Studio') or when you hire employees. For tax purposes, LHDN treats any self-employment income as business income under Section 4(b) of the ITA, regardless of whether you have a registered business.
Can I deduct business expenses on Form B?
Yes — this is the main financial advantage of Form B over Form BE. Under Section 33 ITA, you can deduct expenses 'wholly and exclusively incurred in the production of income.' Common deductible expenses: home office (proportional utilities and rent — e.g., 1 room out of 4 = 25%), laptop and equipment (capital allowance: 20% initial + 40% first year + 20%/year subsequent), internet subscription (work-use portion), software subscriptions, co-working space, professional courses, accounting and tax agent fees, and business travel. Form BE has no equivalent business expense deduction — salaried employees can only claim tax reliefs (EPF, lifestyle, etc.) but not operating expenses.
What is CP500 and does it apply to Form B filers?
CP500 is LHDN's instalment payment system for self-employed individuals. If you earned business income in the prior year, LHDN sends a CP500 notice requiring you to pay estimated tax in 6 bi-monthly instalments (January, March, May, July, September, November). The instalment amount is calculated as last year's estimated tax ÷ 6. If your income dropped, you can apply to revise it downward using Form CP502. If your actual tax liability exceeds your CP500 payments by more than 30%, a 10% penalty applies on the underpaid portion. First-time Form B filers with no prior history pay their full tax liability when filing in July — no CP500 in year 1.
I accidentally filed Form BE when I should have filed Form B — what do I do?
You must file an amended return (Borang Pindaan) through MyTax. Log in to mytax.hasil.gov.my → e-Kemaskini → select the year → amend to Form B and add your business income and expenses. If you filed Form BE and omitted business income, this is technically an incorrect return — LHDN can penalise you under Section 113 ITA (incorrect return) with penalties of 100–300% of the undercharged tax. Act quickly: if you self-correct before LHDN raises an assessment, the penalty is typically waived or reduced significantly. Do not wait for LHDN to discover the error.