Dividend Tax in Malaysia

In Budget 2025, the Ministry of Finance introduced a significant reform by implementing a Dividend Tax. This new tax policy marks a pivotal shift in the way dividends, which are a portion of a company's earnings distributed to its shareholders, are taxed.

Effective 1st January 2025, dividend income derived by individual shareholders will be subject to a rate of 2% dividend tax on chargeable dividend income after taking into account allowances and deductions.