Demystifying Malaysia’s New Capital Gains Tax

What do business owners, corporate leaders, and finance teams need to know about the newly introduced Capital Gains Tax in Malaysia? We explore with Lim Wai Yin, Corporate Tax Partner at KPMG Malaysia.

We break down the essential guidelines and rules, who this impacts and how, who’s exempted, best practices to ensure compliance, the tax filing details, and much more.

In Budget 2024, it was announced that a capital gains tax (CGT) would be introduced on the sale of shares in unlisted Malaysian companies and the domestic component of this has been in play for 2 months now - it came into effect on March 1st.

This will impact the disposal of unlisted shares in a company incorporated in Malaysia by companies, limited liability partnerships, cooperatives and trust bodies, with capital assets situated in and outside Malaysia in-scope.

Some exemptions were proposed: including gains on disposals in relation to restructuring within the same group, initial public offerings approved by Bursa Malaysia and venture capital companies, however not all proposed exemptions have been gazetted. Individuals have been excluded.

All this was however just the domestic component of the CGT, that will come into effect from March 1, there is also a foreign component impacting foreign assets that came into effect at the start of this year.

We demystify all this and more.