This article sets out how a Malaysian company is actually taxed when it disposes of assets such as unlisted shares, property or overseas assets, since the rules differ by asset type and are not a flat 24% of the proceeds or book profit. Facts were checked as of October 8, 2026.
A Company Selling Assets Must First Look at What Kind of Asset and Transaction It Is
A company receiving disposal proceeds does not mean the whole amount, or the whole book profit, is simply multiplied by 24%. Selling inventory, investment shares, property it holds, or overseas assets can each fall under a different calculation.
First confirm who the seller is, where the asset is located, when it was acquired, and whether the disposal is an investment disposal or a business activity, before estimating the tax due. Holding an asset through a company can serve a management purpose, but a lower corporate tax rate compared with some individual tax rates does not by itself mean the overall tax burden is lower.
Local Unlisted Shares Have Their Own CGT Calculation
Companies and other specified entities disposing of shares in unlisted Malaysian companies, as well as shares in certain foreign companies that meet the conditions under Section 15C, must first confirm whether the disposal falls within the scope of Capital Gains Tax (CGT). Under this local capital asset framework, the general calculation is:
| Date Asset Was Acquired | Tax Rate Arrangement |
|---|---|
| Before January 1, 2024 | May elect, under the applicable rules, either 10% of the chargeable gain or 2% of the gross sale price |
| On or after January 1, 2024 | 10% of the chargeable gain |
The 2% rate is based on the gross sale price, while the 10% rate is based on the chargeable gain as computed under the applicable rules; the two percentages cannot simply be compared against each other to pick the smaller one. The acquisition cost, deductible expenses and treatment of losses must all be supported by documentation.
This type of disposal generally must be reported and the tax paid via e-CKM within 60 days of the statutory disposal date; this should not be left until the company’s annual Form C filing. The disposal date is also not necessarily the same as the date the final payment is received.
A Company Selling Property Directly Is a Separate Matter From Selling Shares
When a company sells Malaysian property and the disposal is of a capital nature, it is generally treated under Real Property Gains Tax (RPGT):
| Company Type | First 3 Years | Year 4 | Year 5 | Year 6 and Beyond |
|---|---|---|---|---|
| Company incorporated in Malaysia | 30% | 20% | 15% | 10% |
| Company incorporated outside Malaysia | 30% | 30% | 30% | 10% |
The rate applies to the chargeable gain, not the full sale price. A locally incorporated company does not become a “company incorporated outside Malaysia” merely because it is held by foreign shareholders.
If the property is trading stock of a development or trading business, it must instead be handled under income tax rules. Selling shares in a company that holds the property is also not simply read off the table above; where a company or other specified entity disposes of shares in that kind of real-property company (RPC), the disposal must instead be assessed under CGT.
Overseas Asset Gains Depend Separately on Remittance and Exemption Conditions
When a resident company receives gains from disposing of foreign capital assets that are remitted into Malaysia, these must be assessed under the foreign-asset rules; the local share rates of 10% or 2% cannot be applied directly.
As of this review, the exemption for this kind of foreign capital gain has been extended to December 31, 2030. The company must meet the applicable scope and economic substance requirements, including having adequate qualified personnel and operating expenditure in Malaysia; simply setting up a shell company does not automatically qualify it for the exemption.
Conditions differ between types of entities, and the options available to unit trusts cannot be applied directly to an ordinary company. This exemption is also separate from the arrangement for individuals’ foreign income running to 2036, and it should not be assumed that overseas dividends fall under the same deadline.
General Corporate Tax and Shareholder Dividends Are Calculated in Two Separate Layers
The standard rate for ordinary chargeable company income is 24%, with separate eligibility for tiered SME incentives. From the 2024 assessment year, one of the conditions restricting eligibility for those incentives is that a foreign company or non-citizen holds, directly or indirectly, more than 20% of the paid-up ordinary share capital.
After a company sells an asset, the funds still belong to the company. When that money is subsequently paid out as dividends to individual shareholders, it must also be assessed separately under the rules on the individual 2% dividend tax and the RM100,000 annual threshold that apply from the 2025 assessment year; a company’s after-tax funds should not be treated as money the shareholder can withdraw entirely tax-free.
Commonly Misunderstood Situations
“CGT Has a 2% Option, So It Must Always Be Cheaper Than 10%”
The two rates are calculated on different bases, and not every acquisition date even has the option of choosing between them.
“Overseas Asset Gains Are Exempt Until 2030, So the Company Doesn’t Need Real Activity”
The company exemption still carries conditions such as economic substance, and supporting evidence must be kept.
What Should You Check Next?
Break the transaction into three steps: the company’s sale, the company’s tax liability, and the shareholder’s withdrawal of funds, and list the amounts, dates and documents for each step separately. Anyone who already has an overseas company should also confirm where its actual management and control is located, rather than relying only on the country named on its certificate of incorporation.
Frequently Asked Questions
Does a company pay a flat 24% tax on every asset it sells?
No. Share CGT, property RPGT, business income and overseas asset gains each follow different rules.
Is a company’s property sale exempt from RPGT from the sixth year onward?
No. A Malaysian-incorporated company generally still pays 10% from the sixth year onward; it cannot apply the zero rate that applies to individual citizens or permanent residents.
Is the exemption on a company’s overseas capital gains until 2030 unconditional?
No. An ordinary company must still meet economic substance and other applicable conditions, and different income types cannot be mixed together under this exemption.
Notes on the Data
This article is based on information available as of October 8, 2026, for general information purposes only and does not constitute tax, legal or investment advice. The nature of the income, tax residency status, exemptions and reporting requirements must be confirmed against the actual transaction and the applicable law.
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Sources
- LHDN – Guidelines on Capital Gains Tax for Unlisted Shares, version dated September 21, 2026
- LHDN – Guidelines: Tax Treatment on Gains from the Disposal of Foreign Capital Assets Received in Malaysia from Outside Malaysia (Amendment), revised September 29, 2026
- LHDN – Real Property Gains Tax Rates
- LHDN – Public Ruling 8/2025: Tax Treatment for Micro, Small and Medium Companies
- LHDN – Compiled Q&A, National Tax Seminar for Budget 2025, October 23, 2024, on individual dividend tax
- LHDN – Public Ruling 9/2019: Residence Status of Companies (residence-status section)
Important Notice
This article is a general information summary based on information available as of October 8, 2026, and does not constitute tax, legal or investment advice for any individual case. The nature of the income, tax residency status, exemptions and reporting requirements must be confirmed against the actual transaction and the law that applies to it; consult a qualified tax professional for your own situation.
