KUALA LUMPUR (Jan 16): The government has agreed to exempt the imposition of capital gains tax (CGT) as well as taxes on foreign-sourced income (FSI) on unit trusts, according to Finance Minister II Datuk Seri Amir Hamzah Azizan.
“Through the various engagements we have had on this matter, it has come to our attention that one unintended area impacted by CGT is unit trusts, given that more than 90% of unit trust holders are individuals,” he told the audience here in his keynote address on launching Bursa Malaysia's new logo.
“I want to assure you that this government values feedback and engagements. I am pleased to announce that the government has agreed to exempt the imposition of CGT as well as taxes on FSI on unit trusts,” he said.
This is to ensure that the rakyat will continue to benefit wholly from the gains of their hard-earned money, and invest for their future, said Amir Hamzah.
The minister said the exemption on FSI takes effect from Jan 1, 2024 until Dec 31, 2026.
NEWS: Govt exempts unit trusts from CGT and FSI
Meanwhile, he said the exemption on CGT is effective from Jan 1, 2024 until Dec 31, 2028.
“The government will continue to make capital market investments in Malaysia rakyat-friendly. In line with international best practices and to expand the tax base, the government introduced the CGT in Budget 2024.
“The scope for CGT focused on gains from the disposal of unlisted shares by companies. Disposals of listed shares and disposals by individuals are not subject to CGT,” he said.
Malaysia introduced the CGT on foreign assets at the start of this year, imposed on all gains or profits on foreign capital assets — ranging from real property overseas to shares on foreign stock exchanges — at the prevailing tax rate.
For the domestic component, it will come into effect from March 1, and only on disposal of unlisted shares in a company incorporated in Malaysia, and disposal of shares in a controlled company incorporated outside Malaysia but owns real property in Malaysia, or shares in another controlled company.
Other than the above, the new law exempts from taxing gains or profits from disposal of other capital assets situated in Malaysia.
However, the CGT’s definition of shares includes loan stocks and debentures. This means disposal of loan stocks, debentures, bonds and sukuk will be subjected to CGT.
Those who are subject to the CGT include companies, limited liability partnerships, trust bodies, and cooperative societies.
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