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Malaysia: Tax developments summary (April 2026)

Accelerated capital allowances for e-invoicing, new income tax exemptions, indirect tax amendments

april 14, 2026

The KPMG member firm in Malaysia has prepared its April 2026 tax developments report, focusing on updates to capital allowances, income tax exemptions, tax filing programs, and indirect tax legislation.

  • Accelerated capital allowance for e-invoicing: New rules provide for an accelerated capital allowance for qualifying expenditures related to e-invoicing for the years of assessment (YA) 2024 to 2027.
  • Tax treatment for REIT and property trust fund unit holders: The Malaysian Inland Revenue Board (MIRB) issued Practice Note No. 2/2026, clarifying that with the expiration of the concessionary 10% withholding tax rate, unit holders receiving distributions from real estate investment trusts (REITs) or property trust funds from the year of assessment 2026 onwards must report this income in their annual tax returns.
  • New income tax exemption orders: The Income Tax (Labuan Company) (Exemption) Order 2026 extends an exemption on payments made to Labuan International Commodity Trading companies from YA 2026 to 2030. Additionally, the Income Tax (Tour Operator Company) (Exemption) Order 2026 provides an income tax exemption for qualifying tour operators for YA 2026 and 2027.
  • Updated tax filing program: An updated filing program for YA 2026 has removed the requirement for insurance companies and takaful operators to submit certain additional documents with their financial statements.
  • Sales tax and service tax guides: The Royal Malaysian Customs Department (RMCD) has issued revised guides for Sales Tax Registration (March 6, 2026), Healthcare Services (March 1, 2026), and Construction Work Services (March 17, 2026).
  • Updates to indirect tax legislation: Various customs and sales tax orders have been published, including amendments to the customs duties order related to the Regional Comprehensive Economic Partnership (RCEP) effective March 31, 2026, and an amendment to the Sales Tax (Persons Exempted from Payment of Tax) Order 2026, which came into operation on April 9, 2026.

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