Capital Gains Tax Guide

Capital Gains Tax (CGT) is a tax on the gain made when a chargeable person disposes of a capital asset. Malaysia's CGT took legislative effect on 1 January 2024, introduced through the Finance (No. 2) Act 2023.

The tax covers gains on the disposal of capital assets by four types of chargeable person defined under the Income Tax Act 1967:

• Companies
• Limited liability partnerships (LLPs)
• Trust bodies
• Co-operative societies

Individuals are not subject to CGT on share disposals. If you personally sell shares, CGT does not apply to you. The regime is built around corporate and similar entities.

Although CGT was legislatively effective from 1 January 2024, tax on disposals of unlisted Malaysian shares was practically deferred to 1 March 2024. An exemption order covered the window from 1 January to 29 February 2024, so the first two months of 2024 carried no charge on unlisted share disposals.

CGT is a separate regime from personal income tax. For personal income tax rates, brackets and e-Filing, see the Tax Guide. This page focuses on how CGT works for the entities that are chargeable to it.

The figures in this section are current as of July 2026.

CGT on unlisted Malaysian shares is charged in one of two ways, and which options are open to you depends on when the shares were acquired.

The 2% gross option is only available for shares acquired before 1 January 2024. For shares acquired on or after that date, the 10% net-gain method is the only method.

Choosing between 10% net and 2% gross (pre-2024 shares):

The break-even point is when the net gain equals 20% of the disposal price. From there:

• The 2% gross option is more favourable when the profit margin is high (a large gain relative to the sale price).
• The 10% net option is more favourable when the gain is relatively low.

A worked check: if you sell for RM 1,000,000 and your net gain is RM 200,000, that gain is exactly 20% of the disposal price, so both methods produce RM 20,000 of tax. Above a 20% margin the 2% gross method costs less; below it the 10% net method costs less.

CGT applies to specific chargeable persons only. The four categories, as defined under the Income Tax Act 1967, are:

• Companies (including Sdn Bhd and Bhd entities)
• Limited liability partnerships (LLPs)
• Trust bodies
• Co-operative societies

Individuals are outside CGT on share disposals. An individual selling shares, listed or unlisted, is not a CGT chargeable person for that disposal.

This is one of the most common points of confusion. CGT does not turn every share sale in Malaysia into a taxable event. It reaches the corporate and similar entities listed above when they dispose of in-scope capital assets, principally unlisted shares and the Section 15C shares described later in this guide.

Gains from the disposal of shares listed on Bursa Malaysia remain completely exempt from CGT. The CGT regime targets unlisted shares.

If you trade or invest in Bursa-listed equities, your capital gains are tax-free. That treatment is unchanged by the CGT regime. For how to invest in listed Malaysian shares, see the Stocks Guide.

The reason this guide exists is the other side of that line: unlisted shares and Section 15C shares are where CGT bites. The listed-share exemption is the contrast point, and everything below concerns the shares that are actually in scope.

CGT covers more than plain unlisted shares. It also reaches Section 15C shares: shares in a controlled company (including a foreign controlled company) that derive their value from real property situated in Malaysia.

The 75% test. Shares in a controlled company are in-scope Section 15C shares where the defined (market) value of Malaysian real property owned, directly or through another controlled company, is not less than 75% of the value of its total tangible assets at the date of acquisition.

Foreign-incorporated companies are caught too. Where a foreign company's shares derive their value from Malaysian real property and the 75% test is met, the gain is deemed to be derived from Malaysia and falls within CGT scope.

Section 15C is how the regime prevents Malaysian property value from being sold indirectly through a company wrapper without any CGT charge. If the underlying asset is substantially Malaysian real property, the share disposal is treated as an in-scope capital asset disposal.

Real property held directly, and shares in Real Property Companies disposed of by individuals and others, continue to sit under the separate Real Property Gains Tax (RPGT) regime, covered later in this guide.

Gains from the disposal of capital assets situated outside Malaysia (foreign capital assets), when received or remitted into Malaysia, are taxed at the taxpayer's prevailing income tax rate. For companies, LLPs and trust bodies this is generally 24%.

There is a substantial exemption running alongside this charge:

• Gains from disposal of foreign capital assets (excluding intellectual property rights) received in Malaysia are exempt from 1 January 2024 to 31 December 2026 for resident companies, LLPs, co-operatives and trust bodies that meet Economic Substance Requirements (ESR).
• Budget 2026 proposed extending this exemption to 31 December 2030, subject to the economic substance conditions.

The practical effect for a resident entity with genuine substance is that foreign capital gains brought into Malaysia can remain exempt through the exemption window, provided the ESR conditions are met. Entities without qualifying substance face the prevailing income tax rate on remitted foreign capital gains.

Several exemptions carve out common transactions from CGT.

IPO exemption. Disposals of unlisted shares in connection with an IPO approved by Bursa Malaysia are exempt under the Income Tax (Exemption) Order gazetted 8 October 2024, covering 1 March 2024 to 31 December 2028.

Group restructuring. Internal group restructuring transactions approved by LHDN are exempt under the Income Tax (Restructuring of Companies Scheme) (Exemption) Order 2024, effective 1 March 2024 to 31 December 2028.

Unit trusts. Resident unit trusts that are not REITs or Property Trust Funds listed on Bursa Malaysia are exempt from CGT on disposals of unlisted shares and Section 15C shares made from 1 January 2024 to 31 December 2028.

CGT is self-assessed and filed electronically.

• Form: the CKM form, filed through LHDN's MyTax portal as e-CKM.
• Deadline: file the return and pay the tax within 60 days from the date of disposal.
• Per event: a separate return is required for each disposal event. There is no single annual roll-up of all disposals into one filing.

Because the clock runs from the disposal date and each disposal stands alone, entities that make several disposals in a year should track each one and its own 60-day deadline. Missing the window on any single disposal is a compliance failure for that disposal.

LHDN issued updated English-language Guidelines on Capital Gains Tax for Unlisted Shares (reference LHDN.AG.600-1/7/3), dated 21 July 2025, which set out the detailed operation of the regime, including how the 75% Section 15C test and the return process apply.

Effective 1 January 2026 (Budget 2026 and the Finance Bill 2025), the definition of disposal for CGT was expanded. It now includes:

• Share redemption
• Conversion
• Winding up
• Dissolution
• Any other event that causes cessation of share ownership

Before this change, disposal was read around a traditional sale. The wider definition means corporate actions that previously sat outside CGT can now trigger a CGT filing and payment obligation, including:

• Share buybacks
• Preference-share redemptions
• Capital reductions

The practical takeaway for boards and finance teams: any corporate action that ends or changes share ownership should be checked against CGT before it is executed, because the same 60-day filing and payment mechanics apply once the action counts as a disposal.

Malaysia now runs two capital-gains-style regimes side by side, and they cover different assets and persons.

Real property and shares in Real Property Companies disposed of by individuals and others continue to be taxed under the separate Real Property Gains Tax (RPGT) regime, which is distinct from CGT.

The overlap point to watch is Section 15C shares. Where a share disposal is really a disposal of Malaysian property value held through a controlled company (the 75% test), CGT is the regime that can apply to the chargeable persons in scope. Direct property sales and RPC shares handled by individuals remain under RPGT.