Capital gains tax (CGT) in Malaysia was introduced through the Finance (No. 2) Act 2023 and is administered by HASiL under the Income Tax Act 1967. According to HASiL's Guidelines on Capital Gains Tax for Unlisted Shares, the CGT regime took effect on 1 January 2024, with the relevant domestic share disposals exempted through 29 February 2024 and implementation for those disposals beginning on 1 March 2024.
Who and what it covers
The guidelines state that the chargeable person is a company, limited liability partnership, trust body or co-operative society, including a Labuan entity, that is subject to tax under the Act. The domestic CGT rules cover shares in unlisted Malaysian-incorporated companies and qualifying shares in foreign controlled companies under section 15C. The section 15C test can include Malaysian real property, qualifying shares in other controlled companies, or both, with a defined value of at least 75% of total tangible assets. Check the statutory definitions and acquisition history before deciding whether a holding is covered. For a reportable disposal, submit Form e-CKM electronically and pay the CGT within 60 days of the disposal date.
The guidelines set the rate at 10% of chargeable income from the disposal. For capital assets acquired before 1 January 2024, the disposer may instead choose a rate of 2% of the gross disposal price.
The wider definition of disposal from 2026
HASiL's response to the joint memorandum on the Budget 2026 tax bills sets out the amended definition of "disposal", effective 1 January 2026. Besides a sale, conveyance or transfer, it covers an extinguishment of rights due to the dissolution or winding up of a company, and a reduction of share capital, conversion of shares, redemption of shares, purchase by a company of its own shares, or the ending of ownership of the capital asset. Corporate events other than a sale therefore need to be reviewed for CGT. HASiL’s guidelines dated 21 September 2026 reflect the wider definition and refer the date and value treatment of these special events to separate guidance. Inclusion in the definition does not by itself establish the tax payable.
For the wider context of a share sale, see our guide for founders selling an SME. Foreign dividends and gains follow separate rules; see our article on foreign dividends received by a Malaysian company.
This article is general information only. Requirements depend on each company's circumstances; please refer to HASiL's official guidance, and see Saifudin & Co's tax advisory and compliance services if you would like assistance.