Tax in Malaysia: SST, income tax, company tax, capital gains
10%
A Sales and Service Tax: 5–10% sales tax on goods and 8% service tax — not a value-added GST. The rate is verified against Royal Malaysian Customs Department (Jabatan Kastam Diraja Malaysia) / Ministry of Finance on 22 September 2026; the top personal income-tax rate is 30% (2026 tax year, Lembaga Hasil Dalam Negeri Malaysia (LHDN / HASiL)), and the headline company tax rate is 24% (Inland Revenue Board of Malaysia (LHDN / HASiL)).
SST in Malaysia
Single-stage: sales tax at manufacture/import and service tax on prescribed services, with no broad input credit.
- Standard rate
- 10%
- Local name
- SST — Sales and Service Tax
- Type
- SST
- Reduced rates
- 6%
- Authority
- Royal Malaysian Customs Department (Jabatan Kastam Diraja Malaysia) / Ministry of Finance
- Current rate since
- 1 January 2000
Introduced 2018 (SST reinstated 1 September 2018, after the GST introduced in 2015 was scrapped)
Malaysia is the rare country that adopted a modern broad-based GST and then took it back out again. GST started on 1 April 2015 at 6%; scrapping it became a central promise of the Pakatan Harapan campaign, and when the coalition won the May 2018 general election the rate was cut to 0% within weeks, on 1 June 2018. The older Sales and Service Tax returned on 1 September 2018, and it is Malaysia's consumption tax today.
What it replaced: The Goods and Services Tax, which ran at 6% from 1 April 2015 until it was zero-rated on 1 June 2018 and repealed on 1 September 2018 — one of the very few broad-based GSTs anywhere to have been introduced and then abolished.
Income tax in Malaysia
The top personal income-tax band is 30% for the 2026 tax year.
Company tax in Malaysia
The headline corporate income tax rate is 24%. In effect since 1 January 2026.
24% for companies other than qualifying SMEs. LHDN page lists rates only up to YA 2023-2024; OECD 2026 also shows 24%, so no change is indicated, but the YA 2025/2026 rate table was not read on an official page. Malaysia has enacted Pillar Two (IIR and DTT) from 2025 (not read this session). | Cross-check: OECD 2026: central statutory CIT 24%, combined (central+sub-central) 24% Reduced rate 15%, not modelled as a small-company rate: Resident company with paid-up capital not more than RM2.5 million and gross business income not more than RM50 million: 15% on first RM150,000, 17% on RM150,001-RM600,000, 24% on the balance (table shown for YA 2023-2024).
Capital gains tax in Malaysia
- Shares
- Listed shares: not taxed for individuals (no CGT; gains taxable as income only if trading). The CGT on unlisted shares (from 1 Mar 2024) applies only to companies, LLPs, trust bodies and co-operative societies. Exception: shares in a real property company (RPC) are chargeable assets under RPGT at the same rates as real property.
- Property
- Real Property Gains Tax (RPGT), Schedule 5 Part I (individual citizens / permanent residents): 30% if disposed within 3 years of acquisition, 20% in year 4, 15% in year 5, 0% in the 6th year and thereafter
- Holding period
- n/a for listed shares; RPC shares follow the RPGT schedule
Did you know? Malaysia tax facts
Malaysia introduced a 6% GST in 2015 and abolished it three years later — the rate went to 0% on 1 June 2018, weeks after an election fought partly over the tax, and the levy was repealed outright that September.
After Pakatan Harapan won the 2018 general election, the incoming government zero-rated GST and brought back the older Sales and Service Tax from 1 September 2018.
Source: Wikipedia — Goods and Services Tax (Malaysia) ↗The gap between the two taxes gave Malaysians a genuine three-month tax holiday — one consumption tax switched off before the next switched on — putting an estimated RM11 billion back in shoppers' hands.
GST sat at 0% for the whole of June, July and August 2018 while the replacement Sales and Service Tax waited in the wings for 1 September, and big-ticket buying surged in the window.
Source: The Star — Zero GST to free RM11bil for M'sians during 3-month tax holiday before SST ↗
More stories, for every country that has one, on the tax facts page.
Ask your AI assistant about tax in Malaysia
The figures on this page are callable by any MCP-compatible assistant through the free Tax MCP. Add https://taxmcp.ai2fin.com as a custom connector in Claude, ChatGPT, Cursor or your own agent — no login, no API key — then ask:
- “What is the SST rate in Malaysia, and what is the source?”
- “Estimate income tax in Malaysia on MYR 60,000 for 2026.”
- “What is the company tax rate in Malaysia and how is it sourced?”
Connect in three steps, and what a connected answer looks like: Tax MCP.
Malaysia, answered
Questions about tax in Malaysia
- What is the SST rate in Malaysia?
- The standard SST (Sales and Service Tax) rate in Malaysia is 10%, verified against Royal Malaysian Customs Department (Jabatan Kastam Diraja Malaysia) / Ministry of Finance on 22 September 2026. A reduced rate of 6% applies to some categories. Single-stage: sales tax at manufacture/import and service tax on prescribed services, with no broad input credit.
- What is the top income tax rate in Malaysia?
- The top personal income-tax band in Malaysia is 30% for the 2026 tax year, verified against Lembaga Hasil Dalam Negeri Malaysia (LHDN / HASiL) on 6 October 2026. The free income-tax calculator on this site works through the bands below it, and shows the rate table it used.
- What is the company tax rate in Malaysia?
- The headline corporate income tax rate in Malaysia is 24%, verified against Inland Revenue Board of Malaysia (LHDN / HASiL) on 6 October 2026. 24% for companies other than qualifying SMEs. LHDN page lists rates only up to YA 2023-2024; OECD 2026 also shows 24%, so no change is indicated, but the YA 2025/2026 rate table was not read on an official page. Malaysia has enacted Pillar Two (IIR and DTT) from 2025 (not read this session). | Cross-check: OECD 2026: central statutory CIT 24%, combined (central+sub-central) 24% Reduced rate 15%, not modelled as a small-company rate: Resident company with paid-up capital not more than RM2.5 million and gross business income not more than RM50 million: 15% on first RM150,000, 17% on RM150,001-RM600,000, 24% on the balance (table shown for YA 2023-2024).
- How is capital gains tax charged in Malaysia?
- In Malaysia, the regime is mixed, verified against Inland Revenue Board of Malaysia (HASiL) on 6 October 2026. On shares: Listed shares: not taxed for individuals (no CGT; gains taxable as income only if trading). The CGT on unlisted shares (from 1 Mar 2024) applies only to companies, LLPs, trust bodies and co-operative societies. Exception: shares in a real property company (RPC) are chargeable assets under RPGT at the same rates as real property. Holding period: n/a for listed shares; RPC shares follow the RPGT schedule
- Can an AI assistant look up tax rates for Malaysia?
- Yes. The free Tax MCP at https://taxmcp.ai2fin.com gives Claude, ChatGPT, Cursor or any MCP-compatible agent the same sourced figures as this page: the SST rate, an income-tax estimate, the company tax rate, the capital gains rule and a side-by-side comparison with other countries, each answer citing the authority and the date it was checked. Add the endpoint as a custom connector; there is no login or API key.
Sources
- Royal Malaysian Customs Department (Jabatan Kastam Diraja Malaysia) / Ministry of Finance
- Lembaga Hasil Dalam Negeri Malaysia (LHDN / HASiL)
- Inland Revenue Board of Malaysia (LHDN / HASiL)
- Inland Revenue Board of Malaysia (HASiL)
- Wikipedia — Goods and Services Tax (Malaysia)
- The Star — Zero GST to free RM11bil for M'sians during 3-month tax holiday before SST
Last checked 6 October 2026. General information computed from published government rates, not tax advice. Check the linked authority or a registered adviser before relying on a figure.
See every rate side by side in the tax rates table, put Malaysia next to another country in the comparison tool, or read the tax facts.
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