Malaysia
Corporate - Significant developments
Last reviewed - 06 December 2023Global minimum tax
It has been announced that Malaysia will be implementing the global minimum tax based on the Organisation for Economic Co-operation and Development (OECD) Pillar 2, as well as the qualified domestic minimum top-up tax (QDMTT), in the year 2025. The Global Minimum Tax Rules will come into effect from financial years commencing on or after 1 January 2025.
Capital gains tax (CGT)
CGT will be imposed on companies, limited liability partnerships (LLPs), co-operatives, and trust bodies from 1 January 2024 on:
- Gains from disposal of capital assets situated in Malaysia:
- Shares in unlisted companies incorporated in Malaysia.
- Shares in a foreign incorporated company deriving value from real property in Malaysia.
- Gains from disposal of all types of capital assets situated outside Malaysia, remitted into Malaysia.
However, exemption is given for:
- Gains from disposal of shares in unlisted companies incorporated in Malaysia or shares in foreign incorporated company deriving value from real property in Malaysia, made on or after 1 January 2024 to 29 February 2024. The exemption does not apply where the gains are treated as business income.
- Gains from disposal of all types of capital assets situated outside Malaysia, which is received in Malaysia from 1 January 2024 to 31 December 2026, by companies, LLPs, co-operatives and trust bodies resident in Malaysia which meet economic substance requirements.
See the Income determination section for more information.
High value goods tax
A high value goods tax is expected to be introduced at the rate of 5% to 10% on certain high-value items such as jewellery and watches, based on the threshold of price. The implementation date was proposed to be on 1 May 2024.
Increase in service tax rate from 6% to 8%
Effective from 1 March 2024, the service tax rate has increased from 6% to 8% for all taxable services previously subject to tax at 6%, except for:
- Provision of food & beverage services
- Telecommunication services
- Parking services
- Logistics services
e-Invoicing
The Government is in the process of implementing e-Invoicing. The implementation will be carried out in stages as follows:
- 1 August 2024 - Mandatory implementation for taxpayers with an annual turnover or income in excess of RM100 million
- 1 January 2025 - Mandatory implementation for taxpayers with an annual turnover or income in excess of RM25 million to RM100 million
- 1 July 2025 - Mandatory implementation for all other categories of taxpayers