On 1 January 2025, Malaysia will officially implement the Global Minimum Tax (GMT) under Part XI of the Income Tax Act 1967 (ITA 1967).

While the primary target of this new tax regulation is large multinational enterprise (MNE) groups, many small and medium-sized enterprises (SMEs) may still be indirectly impacted.

1. Background: What Is the Global Minimum Tax?
   The GMT is a global initiative led by the Organisation for Economic Co-operation and Development (OECD) to combat profit shifting and base erosion by large multinationals.

Its objective is to ensure that MNE groups pay a minimum effective tax rate of 15%, regardless of where they operate.

Malaysia, like many other countries, is aligning with this global effort to create a more equitable tax environment.

The GMT will apply to MNE groups with annual global revenue of at least EUR 750 million, based on their consolidated financial statements.

2. Key Dates and Timeline
   Malaysia’s GMT implementation includes several important milestones:

1 January 2025 – Effective Date
The GMT applies to MNE groups whose financial year begins on or after this date.

31 December 2025 – Closing Date
Marks the end of the first reporting year under the GMT framework for MNEs with a full 12-month financial year.

30 June 2027 – Key Submission Deadline
MNE groups must submit the following within 18 months of the financial year-end:

Top-up Tax Return (TTR) – To declare any additional tax liabilities required to meet the 15% minimum tax rate.

Global Information Return (GIR) – A comprehensive disclosure form detailing compliance with GMT rules.

Top-up Tax Payment – Any shortfall in tax must be paid by this deadline.
January 2028

3. My Personal Experience on GMT

Although I mainly serve SME clients, the Global Minimum Tax (GMT) has become part of my daily conversations — especially when I handle foreign clients or group structures with overseas ties.

Every time a foreign shareholder or foreign board approves a structure or investment in Malaysia, the first question I always ask is : “Is the group subject to GMT?”

Most of the time, this catches them by surprise.

But it’s a necessary question because if the group’s global revenue hits EUR 750 million, the entire group may be affected — including their Malaysian entities.

4. Impact on Malaysian SMEs

Although GMT targets large MNEs, SMEs may still feel the pressure.

If you’re a supplier to MNEs, expect more requests for financial data to support their GMT compliance.

MNEs facing higher taxes might push for lower pricing or cut costs, which could affect your contracts or margins.

Some SME groups nearing the EUR 750 million threshold may need to review their structure and tax planning.

Even if you’re not directly involved, working with MNEs means adopting better compliance practices, including stronger financial reporting and documentation.