Malaysia · Enacted legislation
Malaysia extends foreign-dividend exemption through 2030
On 22 October 2026, Malaysia's Attorney General's Chambers published P.U. (A) 367/2026, providing a foreign-dividend income-tax exemption for qualifying Malaysian residents from 1 January 2027 to 31 December 2030.
- Official document:
- P.U. (A) 367/2026
- Development date:
- 2026-10-22
A successor exemption for remitted dividends
The Order exempts gross dividend income arising outside Malaysia and brought into Malaysia during the basis period. It is made under paragraph 127(3)(b) of the Income Tax Act 1967 and applies from 1 January 2027 to 31 December 2030. It succeeds the current exemption period, which Inland Revenue Board guidance records as ending on 31 December 2026.[1][2]
Foreign-tax or Malaysian-substance conditions
A qualifying person must comply with conditions in guidelines issued under section 134A of the Act. The Order says those conditions must include either foreign taxation of a similar character where the source jurisdiction's highest rate is at least 15%, or an adequate number of employees and adequate operating expenditure in Malaysia. The Order therefore does not make every remitted foreign dividend automatically exempt: groups must satisfy the applicable guideline route and retain supporting evidence.[1]
Eligible residents and excluded businesses
Qualifying residents are individuals receiving the dividend in connection with a Malaysian partnership business, registered limited liability partnerships, Companies Act companies, Labuan companies that have elected into the Income Tax Act, co-operative societies and trust bodies. The exemption does not apply to a person carrying on banking, insurance, sea-transport or air-transport business. These entity and sector boundaries should be checked before treating a group remittance as exempt.[1]
Compliance obligations continue
Deductions relating to exempt income are disregarded when chargeable income is determined. The exemption also does not remove obligations to submit returns, statements of accounts or other information. Multinational groups should identify dividends expected to be remitted from 2027, map the available foreign-tax or Malaysian-substance evidence and monitor the section 134A guidelines before relying on the successor exemption in returns or cash-tax forecasts.[1]
Official sources
- [1] Income Tax (Dividend Income Received in Malaysia from Outside Malaysia) (Exemption) Order 2026, P.U. (A) 367/2026
Attorney General's Chambers of Malaysia · Document date: 2026-10-12
Complete seven-page bilingual Gazette order read. Pages 1 and 4 identify the instrument and 12 October making date; pages 2-3 and 5-7 set out the 1 January 2027 to 31 December 2030 period, qualifying persons, foreign-tax or Malaysian-substance conditions, excluded sectors, disregarded deductions and preserved filing/information obligations. Published in the Gazette on 22 October 2026. Retrieved PDF SHA-256: 9dc97fb3bef0334feb843f949e703fc700dd35237326c807910a93051d4f2a75.
- [2] Tax Treatment in Relation to Income Received from Abroad (Amendment), June 2024
Inland Revenue Board of Malaysia · Document date: 2024-06-20
Current guidance comparator read for the existing foreign-income exemption framework and its 31 December 2026 end date. Used only to establish the predecessor period and guidance context; P.U. (A) 367/2026 supplies the new operative rules.