Exclusion of Foreign Source Income from Cukai Makmur Computation

Pursuant to Finance Act 2021, a special one-off tax termed as Cukai Makmur has been introduced for companies other than small and medium enterprises, where a 33% corporate income tax rate will be levied on chargeable income exceeding RM100 million for the year of assessment 2022.

The Ministry of Finance (“MOF”) had subsequently made an announcement that FSI received in Malaysia in the year of assessment 2022 shall be excluded from the computation of tax for the purpose of Cukai Makmur.

Further to the above, the Income Tax (Exemption) Order 2022 has been gazetted to provide a prescribed formula in excluding the chargeable income in relation to the FSI from Cukai Makmur computation, as follows:

The excess chargeable income will be subject to income tax at the following tax rates:

Chargeable Income

Tax Rate

First RM100 million


Remaining balance



The Exemption Order is applicable on FSI received in Malaysia from 1 July 2022 and only applies for the year of assessment 2022.

FSI received in Malaysia by any resident person in the first 6 months of year 2022 would still be subject to income tax at the rate of 3% on gross amount.

The Exemption Order and KPMG’s earlier Tax Whiz on the MOF announcement can be accessible via the above links.

Should you have any questions or require further clarification, please do not hesitate to email or contact any of our Executive Directors, Directors, Associate Directors or Managers whom you are accustomed to dealing with or who are responsible for the tax affairs of your organization.

Petaling Jaya Office

Soh Lian Seng
Executive Director -
Head of Tax and Head of Tax Dispute Resolution
+ 603 7721 7019

Bob Kee
Executive Director -
Head of Transfer Pricing
+ 603 7721 7029

Tai Lai Kok
Executive Director -
Head of Corporate Tax
+ 603 7721 7020

Long Yen Ping
Executive Director -
Head of Global Mobility Services
+ 603 7721 7018

Ng Sue Lynn
Executive Director -
Head of Indirect Tax
+ 603 7721 7271

Outstation Offices

Penang Office

Evelyn Lee
Executive Director -
Penang Tax
+604 238 2288 (ext. 312)

Ipoh Office

Crystal Chuah Yoke Chin
Tax Manager -
Ipoh Tax
+605 253 1188 (ext. 320)

Kuching & Miri Office

Regina Lau
Executive Director -
Kuching & Miri Tax
+6082 268 308 (ext. 2188)

Kota Kinabalu Office

Titus Tseu
Executive Director -
Kota Kinabalu Tax
+6088 363 020 (ext. 2822)

Johor Bahru Office

Ng Fie Lih
Executive Director -
Johor Bahru Tax
+607 266 2213 (ext. 2514)