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Malaysia Tax Guide

Asia
Updated January 2025
Sources + last updated

This page includes citations to the sources used for this entry. Always verify with official sources before making decisions.

Personal Tax Score
78/100
Tax Friendly
Business Tax Score
75/100
Tax Friendly

Personal Income Tax

Tax Residency

Day Threshold
182 days
Note
182 days in a calendar year

Income Tax Rates

Top Marginal Rate
30%
Structure
Progressive 0-30%

Foreign Income Treatment

System
Territorial
Details
Foreign-sourced income generally exempt unless remitted and from specific activities

Investment Income

Capital Gains
0%
Dividends
0%
Interest
0%

No capital gains tax except on real estate (RPGT)


Wealth & Inheritance

Wealth Tax
No - No wealth tax
Inheritance Tax
No - No inheritance tax

Special Regimes

Malaysia My Second Home (MM2H)
Long-term residency program for foreigners

Practical Notes

Dividends tax-exempt as company profits already taxed. Various personal reliefs available.

Business & Corporate Tax

Corporate Income Tax

Headline Rate
24%
Effective Rate Note
24% for resident companies; lower rates for SMEs on first RM600,000
Free Zone / Incentives
Free zones and various incentives available

Withholding Taxes

Dividends
0%
Interest
0-15%%
Royalties
0-10%%

VAT / GST

Rate
8%
Note
8% SST (Sales and Service Tax) - not a full VAT system

Compliance & Substance

Substance Requirements
Moderate
Compliance Friction
Moderate

Notable Regimes

  • Pioneer status incentives
  • Investment tax allowances
  • Free zones

Data Sources

Last updated: January 2025. Always verify with official sources before making decisions.

FAQ

What is the personal income tax rate in Malaysia?

Malaysia has a top personal income tax rate of 30%. The tax structure is: Progressive 0-30%. See the detailed breakdown above and verify with official sources.

Do I need to pay tax on foreign income in Malaysia?

Malaysia uses a territorial system for foreign income. Foreign-sourced income generally exempt unless remitted and from specific activities

What are the residency requirements for Malaysia?

Tax residency in Malaysia generally requires 182 days of physical presence. 182 days in a calendar year. Always verify current rules with official sources.

Is there a wealth tax in Malaysia?

No, Malaysia does not have a wealth tax. No wealth tax

What is the corporate tax rate in Malaysia?

The corporate tax rate in Malaysia is 24%. 24% for resident companies; lower rates for SMEs on first RM600,000