Malaysia Tax Rates
Malaysia operates a progressive income tax system with rates from 0% to 30%, administered by the Inland Revenue Board (LHDN). The corporate tax rate is 24%, and Malaysia levies a Sales and Services Tax (SST) at 6-10% instead of a VAT/GST. Malaysia does not impose capital gains tax on most assets (except real property), has no inheritance tax, and offers various incentives through the Malaysian Investment Development Authority (MIDA). The country introduced a capital gains tax on shares from 2024.
Top Income Tax Rate
30%
Corporate Tax Rate
24%
VAT / Sales Tax
8%
Capital Gains Tax
10%
Detailed Tax Information
Income Tax Brackets
Malaysia's personal income tax applies progressive rates from 0% to 30% across multiple brackets. Tax residents are taxed on Malaysian-sourced income only (territorial basis), though foreign-sourced income remitted to Malaysia has been taxable from 2022 for companies, with individual exemption extended. Non-residents are taxed at a flat 30% on Malaysian-sourced income. Various tax reliefs are available including personal relief (RM 9,000), medical insurance (RM 3,000), education (RM 7,000), EPF contributions (RM 4,000), and lifestyle relief (RM 2,500).
| Income Range | Tax Rate |
|---|---|
| RM 0 – RM 5K | 0% |
| RM 5K – RM 20K | 1% |
| RM 20K – RM 35K | 3% |
| RM 35K – RM 50K | 6% |
| RM 50K – RM 70K | 11% |
| RM 70K – RM 100K | 19% |
| RM 100K – RM 400K | 25% |
| RM 400K – RM 600K | 26% |
| RM 600K – RM 2.0M | 28% |
| RM 2.0M+ | 30% |
Corporate Tax
Malaysia's standard corporate income tax rate is 24%. Small and medium enterprises (SMEs) with paid-up capital of RM 2.5 million or less (and not part of a group with a member exceeding this threshold) benefit from a 15% rate on the first RM 150,000 of chargeable income, 17% on RM 150,001-600,000, and 24% on the remainder. Various incentives are available through MIDA, including Pioneer Status (5-10 year tax exemption), Investment Tax Allowance, and sector-specific incentives.
Standard Rate
24%
Small Business Rate
15%
Capital Gains Tax
Malaysia introduced a capital gains tax on disposals of unlisted shares by companies from March 2024, at a rate of 10% on net gains (or 2% on gross proceeds for shares acquired before March 2024). Real property is subject to Real Property Gains Tax (RPGT) at rates of 30% (years 1-3), 20% (year 4), 15% (year 5), and 0-10% thereafter depending on citizenship. Listed shares remain exempt from capital gains tax.
Rate
10%
VAT / Sales Tax
Malaysia replaced GST with a Sales and Services Tax (SST) in September 2018. The SST has two components: a sales tax on manufactured and imported goods at 5-10% (most at 10%), and a services tax at 6-8% on prescribed taxable services. The services tax rate was increased from 6% to 8% for most services from March 2024. Essential goods, exported goods, and many basic services are exempt. The SST is a single-stage tax, unlike the multi-stage GST/VAT.
Standard Rate
8%
Cryptocurrency Tax
Malaysia does not impose a specific cryptocurrency tax. The Inland Revenue Board has clarified that cryptocurrency is not legal tender and that profits from crypto trading by individuals are generally not subject to income tax as they are capital gains (which were historically not taxed). However, individuals actively trading crypto as a business may be subject to income tax on profits. Companies including crypto gains in assessable income would pay the standard 24% rate.
Tax Treaties
Malaysia has approximately 75 double taxation agreements in force. These treaties provide reduced withholding rates on dividends, interest, and royalties. Malaysia generally follows the OECD Model Convention with certain modifications. The country is also a party to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and participates in the OECD BEPS framework.
Treaty Network
75
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Malaysia
See how much you could save by moving here from your current country.
+$4K
Tax in United States
$24K
24.4% effective
Tax in Malaysia
$20K
20.4% effective
You Save
16.3%
less tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
