Navigating Malaysia's New Capital Gains Tax Landscape: Insights and Compliance Strategies

Malaysia’s New Capital Gains Tax (CGT) Regime
The Malaysian government has recently introduced a Capital Gains Tax (CGT). Here are some key points to note:
- Capital gains tax is applicable to the sale of unlisted shares in Malaysian-incorporated companies or shares of foreign-controlled companies linked to Malaysian real estate, as well as gains from the disposal of foreign assets received in Malaysia by foreign entities.
- Capital Gains Tax (CGT) is applicable to various entities such as companies, Limited Liability Partnerships (LLPs), trusts, and cooperative societies.
- The effective date for the implementation of CGT is January 1, 2024.
Important Compliance Considerations
- Taxpayers must file electronic returns and make payments within 60 days from the disposal of the asset.
- Gains or profits will be ascertained separately for each disposal and treated as a separate source of income.
Considerations for Traders and Investors
- Traders in shares will be subject to prevailing income tax rates if the shares represent stock-in-trade.
- Capital losses on the disposal of capital assets can be utilized to reduce taxable income in subsequent years.
Exemptions and Special Cases
- Exemptions may apply for certain transactions, such as
Initial Public Offerings (IPOs) and internal group restructuring - Unit trusts
- Labuan entities that are taxed under LBATA
Tax Treaty Protection
- Tax treaty protection may be available for disposals if specific conditions are met under relevant tax treaties.
Disclaimer:
This material is for informational purposes only and does not constitute legal, financial, or professional advice. Readers should seek the advice of professionals before taking any action to ensure that your specific circumstances are appropriately considered.
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