Capital Gains Tax (Part 1)
What Is Capital Gains Tax (CGT)?
- Malaysia announced the implementation of Capital Gains Tax (CGT) under the 2024 Budget
- CGT came into effect on 1 March 2024
- Prior to this, Malaysia did not impose Capital Gains Tax
Which Assets Are Subject to CGT?
- CGT currently applies mainly to Unlisted Shares
- Capital gains derived from such shares may be subject to tax
Which Transactions Are Exempt?
- Listed Shares
- Initial Public Offerings (IPO)
- Internal Restructuring exercises
- Certain qualifying assets and transactions
Who Is Subject to CGT?
- Companies
- Limited Liability Partnerships (LLPs)
- Co-operatives
- Trusts
Who Is Exempt from CGT?
- Individuals are generally not subject to CGT
CGT Rate for Shares Acquired Before 1 March 2024
- Taxpayers may choose either:
- 10% of Net Gain, or
- 2% of Gross Sales Value
CGT Rate for Shares Acquired On or After 1 March 2024
- No election is available
- CGT is charged at 10% of Net Gain
Summary
- CGT has been effective since 1 March 2024
- It mainly applies to gains from unlisted shares
- Individuals are generally exempt
- Companies, LLPs, co-operatives, and trusts may be subject to CGT depending on the transaction involved