This article first appeared in Wealth, The Edge Malaysia Weekly on October 27, 2025 - November 2, 2025
Since October, fund houses and investment platforms — including asset management firms, and robo-advisory and peer-to-peer (P2P) financing platforms — have begun charging consumers the 8% sales and service tax (SST). Two digital asset exchanges (DAX) have, however, absorbed the tax on behalf of their customers.
With the SST in place, a RM1,000 unit trust investment with a 5% sales charge (RM50) now incurs an additional RM4 in tax. The SST also applies to the fund houses’ annual asset management fee, which typically ranges from 0.25% to 2% of the investment’s net asset value (NAV), depending on the service provider and asset class.
Robo-advisory firms typically charge an annual management fee of 0.15% to 1%, with no sales charge, whereas P2P platforms impose a platform fee as low as 0.3% or a percentage of interest earned. An additional 8% SST is now applied on top of these fees.
At least two DAXs in the country — Luno and Hata — have decided to absorb the SST on behalf of consumers, which is not standard industry practice.
An industry player notes that equity crowdfunding (ECF) platforms have already been subject to SST, but the tax is imposed on companies using their services for fundraising — not on investors, because ECF platforms do not charge investors any fee.
Industry response to the SST has been mixed. The CEO of an asset management firm believes the tax makes Malaysia less attractive for both local and foreign investors to channel their savings into unit trust funds, potentially reducing the industry’s regional competitiveness. In contrast, the CEO of a robo-advisory platform downplays the impact, calling it a minor cost to investors.
Fixed income asset managers and investors — including P2P players — appear more concerned about the SST, as their returns are fixed and typically only slightly higher than fixed deposit or Employees Provident Fund (EPF) dividend rates. While it is still early to gauge the full impact, one P2P industry player expects the sector to feel the effects.
Additional tax updates relevant to investors were announced by the government at the tabling of Budget 2026 on Oct 10. Tax exemption on foreign-sourced dividend income received in Malaysia has been extended until Dec 31, 2030, for certain categories of taxpayers, including trust bodies — which is good news for unit trust funds that invest abroad.
In addition, tax exemption on gains from the disposal of foreign capital assets received in Malaysia will be extended to Dec 31, 2030, from Jan 1, 2027, with the exemption applying to trust bodies as well.
According to a tax expert, trust bodies include unit trust funds, private trusts and real estate investment trusts (REITs).
Meanwhile, the individual income tax exemption for foreign-sourced income had already been extended for 10 years, until Dec 31, 2036, as announced in October 2024.
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