Does capital gains tax apply when a company sells unlisted shares in Malaysia?
Yes, for disposals from 1 March 2024. Companies, LLPs, trust bodies and co-operatives pay capital gains tax on gains from unlisted shares in Malaysian companies. Individuals are not covered. The return and payment are due within 60 days of disposal.
Malaysia introduced capital gains tax (CGT) on 1 January 2024. For unlisted shares in Malaysian companies it effectively bites from 1 March 2024, because disposals from 1 January to 29 February 2024 were exempted by order.
Who pays: companies, limited liability partnerships, trust bodies and co-operative societies. The capital gains rules apply only to these entities (s.65D), so a disposal by an individual is outside this tax. Shares held as trading stock are taxed as ordinary business income instead.
Rate: 10% of the chargeable gain for shares acquired on or after 1 January 2024. For shares acquired before that date, the disposer can choose 10% of the gain or 2% of the gross disposal price (see the next answer).
How the gain is worked out: disposal price, less acquisition cost, incidental costs of buying and selling, and certain enhancement costs. Capital losses are tracked separately and offset against later capital gains.
Filing: an electronic return (e-CKM) on MyTax and payment within 60 days of the disposal. Keep records for seven years.
Scope. The tax covers shares in unlisted companies incorporated in Malaysia, and shares in foreign-incorporated controlled companies that hold Malaysian real property or shares in other controlled companies (s.15C). LHDN's filing programme lists the same scope.
Exemptions: certain disposals are exempt by ministerial order, for example some IPO-related and group restructuring transfers. Read the order that applies before relying on one.
Legal basis
- Income Tax Act 1967, s.4(aa) and s.15C
- Income Tax Act 1967, ss.65C to 65F (Chapter 9)
- Income Tax Act 1967, s.77A(1B)
- Income Tax Act 1967, Schedule 1, Part XXI
Sources
Applies to YA 2024 onwards · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- Can a company with foreign shareholders still get the SME tax rate in Malaysia?Only if foreign ownership stays at 20% or below. The SME rates also need paid-up ordinary capital of RM2.5 million or less and gross business income of RM50 million or less. If more than 20% of the ordinary capital is held, directly or indirectly, by foreign companies or non-citizen individuals at the start of the basis period, all income is taxed at 24%.
- For unlisted shares, which capital gains tax rate applies: 10% of the gain or 2% of the price?Shares acquired before 1 January 2024 can be taxed at the disposer's choice of 10% of the chargeable gain or 2% of the gross disposal price. Shares acquired on or after 1 January 2024 are taxed only at 10% of the gain.
- What is the corporate tax rate for a small company in Malaysia?A Malaysian resident company normally pays 24% income tax. A company that meets the SME conditions pays 15% on the first RM150,000 of chargeable income, 17% on the next RM450,000 (up to RM600,000), and 24% on anything above that.
- What conditions must my company meet to get the SME tax rates in Malaysia?To use the lower 15%/17% rates, the company must be resident, have ordinary paid-up capital of RM2.5 million or less, and gross business income of RM50 million or less. It must also pass the related-company test and, from YA 2024, a foreign-ownership test.
- Does a dormant company with no income still have to file a tax return in Malaysia?Yes. LHDN says companies that are dormant or have not started business must still register a tax file and file returns. A nil return tells LHDN there is no taxable income, and failing to file can be an offence even when no tax is due.