Capital Gain Tax (“CGT”) on Disposal of Unlisted Shares
Malaysia’s Budget 2024 provides more details on the implementation of Capital Gain Tax (CGT) which was first tabled in Budget 2023. CGT will be imposed on the disposal of unlisted shares in Malaysian Companies with effect from 1 March 2024.
Currently, under the Real Property Gains Tax Act 1976, tax gains from the disposal of real property and shares in real property companies are rated at 10% to 30% depending on the holding period.
CGT will be imposed with differing rates depending on the date the shares were acquired. The proposed rates are as follows:
Shares Acquisition Date
Capital Gains Tax Rate
Before 1 March 2024
The taxpayers may choose:
Ø 10% on the net gain of the disposal of shares: or
Ø 2% on the gross sales value
From 1 March 2024
10% on the net gain of the disposal of shares
The Government proposed that there will be an exemption for the disposal of shares in connection with initial public offerings (IPO) or internal group structure.