KUALA LUMPUR (Dec 2): The Inland Revenue Board of Malaysia (IRB) has set a 10-year limit for tax-exempt status given to non-profit groups — such as charities, welfare bodies, religious institutions, education funds and community service non-government organisations — that can receive tax-deductible donations.

This rule takes effect retroactively on Nov 27, 2025.

The affected institutions, organisations and funds are those that fall under Section 44(6) of the Income Tax Act 1967, IRB said in a statement.

Under the new ruling, IRB will issue updated notification letters to organisations whose approvals end on Dec 31, 2025, detailing the application of the 10-year limit. 

Approvals granted before Nov 27, 2025 will remain valid for the duration previously stated, with the new limit applying only after their current approval expires.

IRB also highlighted that compliance audits will continue throughout the approval period. Organisations that fail to meet the required conditions risk having their tax-exempt status revoked, after which their income may be taxed in accordance with Schedule 6 of the Act.