Individual Investors Are Not Exempt from Dividend Tax
Basic Policy (New Rule from 2025)
- Starting from 1 January 2025, Malaysia will impose a dividend tax
- Prior to this, dividend income was tax-exempt
Applicable Scope
- Applies only to individual investors
- Dividend income received by companies, cooperatives, LLPs, and trust bodies remains tax-exempt
Threshold and Tax Rate
- For individuals, annual dividend income exceeding RM100,000
- The excess amount is subject to a 2% tax
Transitional Arrangement
- Dividends distributed before 31 December 2024
- Remain tax-exempt for both individuals and companies
Planning Consideration
- If there is a plan to distribute dividends, consider doing so before 31 December 2024
- To avoid the 2% dividend tax for individual investors