TIGER CONSULTING ASIA
HR and Payroll Outsource Services, Employment Services, Manpower Contracting
Decoding Malaysia's New Dividend Tax: What You Need to Know
March 12th, 2025
Malaysia has long been a haven for investors, particularly those attracted by the previously tax-free dividend income. However, the landscape has shifted with the introduction of a new dividend tax, marking a significant change in the country's tax policy. This blog post aims to break down the new regulations and provide clarity on what this means for you.
Okay, let's break down the new dividend tax in Malaysia in simple terms: Imagine you buy a small piece of a big company by owning its shares. If the company makes a profit, they might give you a small portion of that profit as a "thank you" – that's a dividend. Right now, most people in Malaysia don't pay any extra tax on the dividends they receive. But starting in 2025, if you get a LOT of dividends (more than *RM100,000 in a year), you'll have to pay a little extra tax on the extra amount.
Think of it like this: Imagine you have a basket of fruits. If your basket has more than 100 fruits, you have to give away 2 out of every 100 extra fruits you have. That's kind of like the new dividend tax. This new tax will mostly affect people who are already quite wealthy and have a lot of investments. Most people won't need to worry about it. The government wants to make the tax system a bit fairer. They think that people who earn a lot of money should contribute a bit more to the country. This tax only applies to dividends from Malaysian companies.
In conclusion, If you're someone who gets a lot of dividends from Malaysian companies, you might need to pay a little extra tax starting in 2025. But if you're like most people, this new tax probably won't affect you. The introduction of the dividend tax is a significant change in Malaysia's tax landscape. While it primarily affects high-income earners, it's crucial for all investors to understand the implications. By staying informed and seeking professional advice, you can navigate these changes effectively and ensure compliance with the latest regulations. Don't hesitate to consult with us to discuss how this new tax impacts your specific financial situation.
Thanks for choosing Tiger-Consulting as your outsourcing partner for cost- effective HR, Payroll and PEO services.
For questions about our services across Asia and other key markets including Europe, Canada and South America, please email: sales@Tiger-Consulting.net
Sincerely,
Mercy Mildener
Public Relations and Marketing Consultant
