Tax compliance is a major concern among many governments in the world. The issue of tax compliance has long been discussed. Past studies have shown that there has always been a reluctance among taxpayers to pay taxes. From the works of literature, the small-scale sector is known to be a tough party when it comes to paying tax. Though the number of small and medium enterprises is growing, tax collection from this sector is still insignificant. Thus, this paper aims to determine factors affecting tax compliance among Malaysia"s Small and Medium Enterprises (SMEs) engaging in online businesses. The data was collected through interviews with six SMEs" owners that have e-commerce business activities. The results reveal that tax knowledge plays a vital role in influencing tax compliance among online companies in Malaysia. In addition, the respondents claimed that the Malaysian tax rules and regulations are too complex to understand, and the current corporate tax rate is too high and burdensome. This paper contributes to the literature in the area of taxation especially in Malaysia. Contribution/ Originality: This study provides more insights into the area of tax compliance and E-Commerce business. It is hope that this article will help other researchers and policy makers on the implementation of taxation towards online business company in Malaysia.