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Dividend tax in Malaysia 2026
Malaysian dividends are tax-free in your hands — company tax settles the bill under the single-tier system — until they pass MYR 100,000 a year, where a 2% tax starts on the excess.
Bank deposit interest is exempt too, which makes Malaysian portfolio income unusually clean for individuals.
At a glance
- top rate
- 2% on Malaysian dividends above MYR 100,000 a year
- entry band
- 0% up to MYR 100,000
- tax year basis
- Calendar year (assessment year 2025 onwards)
- filing deadline
- 30 April / 30 June return
- residency basis
- Applies to residents, non-residents and nominee holdings alike
- regime flag
- Foreign dividends exempt to 2036 if taxed at origin
Rates
How dividends are taxed (2026)
| Rate | Base | Applies to |
|---|---|---|
| 0% | — | Malaysian dividends up to MYR 100,000 a year — tax-paid at company level |
| 2% | Chargeable dividend income above MYR 100,000 | Residents, non-residents and shares held through nominees, from assessment year 2025 |
| 2% | Profit share above MYR 100,000 | Partners of a limited liability partnership, on Malaysian profits paid out from assessment year 2026 |
| 0% | — | Foreign dividends brought in through 2036, where underlying or origin-country tax was paid |
Thresholds & allowances
- Tax-free bandMYR 100,000 a year
Expenses tied to the exempt first MYR 100,000 are not deductible against the taxed excess
Residency
Residency trigger
The 2% charge follows the dividend, not the holder — residents and non-residents both pay it above the threshold.
Non-resident treatment
No withholding applies to Malaysian dividends; a non-resident's only exposure is the 2% on amounts above MYR 100,000.
Notes
- The single-tier system has applied since 2008: company profits are taxed once and dividends carry no further bill for most shareholders.
- Interest on bank and finance-company deposits is exempt for individuals, as is interest on many bonds.
- Foreign dividends qualify for the exemption to 2036 if they suffered underlying company tax, or escaped origin-country tax only through losses, capital-gain treatment or genuine incentives.
- Dividends from an infrastructure fund and similar exempt vehicles keep their own exemptions regardless of the MYR 100,000 test.
FAQ
Are dividends taxable in Malaysia?
Mostly no — Malaysian dividends are tax-free up to MYR 100,000 a year, and only the excess above that is taxed, at 2%.
Who pays Malaysia's 2% dividend tax?
Anyone — resident, non-resident or nominee investor — whose Malaysian dividend income tops MYR 100,000 in a year, from assessment year 2025.
Figures: tax year 2026, compiled from public sources. Not tax advice.