With the new CGT beginning on March 1, 2024, the lack of clear instructions has left taxpayers and businesses unsure about how to proceed.

On January 15, 2024, the Inland Revenue Board of Malaysia (IRBM) published the filing process for the Capital Gains Tax Return Form (CGTRF) but didn’t provide further guidance.

1. The Exemption Order does not change the start date for a lower 2% tax option on unlisted shares bought before 2024. If bought between January and February 2024, future sales are taxed at 10%, not 2%. There might be a “tax-free” period due to a technicality, but this wasn’t officially announced.

2. Redeemable preference shares’ redemption isn’t clearly defined as a “disposal” for CGT, suggesting future clarification.

3. The term “real property” lacks a clear definition for CGT purposes, and it’s unclear how the 75% test for foreign company disposals applies over time.

4. Exemptions mentioned previously might be added later. For foreign-sourced gains to be tax-exempt, companies must meet certain economic substance requirements in Malaysia.

5. It’s uncertain how losses from domestic and foreign asset disposals are treated for tax purposes, indicating a need for further guidance.

Read more about the unanswered questions on Malaysia’s Capital Gains Tax (CGT) by visiting our blog https://lnkd.in/dkJSXCQB