With effect from Year of Assessment 2020, the definition of SMEs has been amended as follow:

SMEs refer to resident companies that have paid up capital of RM2.5 million or less at the beginning of a basis period for a YA.  SMEs enjoy a preferential rate of  17% on the first RM600,000 chargeable income and the balance at 24%.

With effect from YA 2020, the definition of SME include those whose turnover does not exceed RM 50 million.