Capital Gains Tax

Capital Gains Tax: Implementation and effects with Income Tax and RPGT

On 29 December 2023, the Finance (No.2) Act 2023 was published, and with it, the tax laws governing Capital Gains Tax (“CGT”) were formally enacted.

Who is affected?

  • Companies
  • Trust Bodies
  • Limited Liability Partnerships (LLP)
  • Co-Operative Societies

Implementation Dates

Effective dateTypes of Capital Assets Affected
1 Jan 2024Foreign Capital Assets
1 Mar 2024*•Local Unlisted Shares
•Shares Deemed Acquired in Malaysia Pursuant to Section 15C of the Income Tax Act

*The effective date has been deferred to 1 March 2024 with the gazette of Income Tax (Exemption) (No.7) Order 2023.

Types of Capital Assets subject to this CGT

  1. Local unlisted shares
  2. Section 15C
    • foreign unlisted company shares deemed acquired in Malaysia
  3. All types of foreign capital assets

CGT Tax Rates

Effective date of acquisitionTypes of Capital Assets
Affected
Malaysian unlisted company shares
acquired before 1 January 2024		10% on gain or 2% on gross
proceeds
Malaysian unlisted company shares
acquired after 1 January 2024		10% on gain
Foreign sourced capital gains i.e capital
gains from disposals of assets held outside
Malaysia and acquired at any time in the
past		Taxpayer’s prevailing tax rate