The Inland Revenue Board of Malaysia has issued the Guidelines on Capital Gains Tax for Unlisted Shares dated 1 March 2024 on its website.

Key Summaries of the Exemption Order
1. Introduction of CGT under the Income Tax Act 1967 (ITA) effective from January 1, 2024, with implementation starting March 1, 2024.

2. CGT applies to profits from the disposal of capital assets, including unlisted shares of companies incorporated in Malaysia and foreign-controlled companies owning property in Malaysia or shares in other controlled companies.

3. The guideline provides explanations for terms such as ”capital asset,” ”consideration,” ”disposal,” ”stock exchange,” and ”shares.”

4. Entities liable for CGT include limited liability partnerships, trusts, cooperatives, including Labuan entities subject to tax under ITA.

5. CGT imposition based on the year of assessment in which the disposal transaction occurs.

6. Methodology for determining the disposal and acquisition dates and values of capital assets.

7. Calculation of profits or gains from the disposal of capital assets and the handling of unabsorbed losses.

8. Transfer of capital assets to stock in trade and disposal of shares in relevant companies as per Section 15C of the ITA.

9. Claiming foreign tax credits, the CGT rate, and reporting requirements.

10. Exemptions and conditions under which CGT may not apply or be calculated differently.

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