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Malaysia: Recent tax developments concerning income tax incentives, SEZ measures, stamp duty, indirect tax, and individual taxation (August 2026)

August report covers CGT exemption extensions, Johor-Singapore SEZ incentives, and service tax updates

august 13, 2026

The KPMG member firm in Malaysia has prepared its August 2026 tax developments report, focusing on newly introduced income tax deductions and exemptions, Johor-Singapore Special Economic Zone (SEZ) incentives, stamp duty guidance, indirect tax developments, and new rules affecting individual partners of limited liability partnerships.

Income tax

  • Further deduction on additional paid leave for the care of a child under two years of age or a sick or disabled immediate family member
  • Extension of income tax exemption for foreign-sourced income received by qualifying unit trusts through December 31, 2030
  • Extension of capital gains tax (CGT) exemption on remittance of gains from foreign capital asset disposals through December 31, 2030
  • Malaysian Inland Revenue Board (MIRB) guideline on the application process for CGT exemption on share disposals related to initial public offerings (IPOs)
  • Malaysian Investment Development Authority (MIDA) guidelines for the supply chain resilience initiative, including tax deductions for strategic anchors and joint venture investments
  • Ministry of Finance guidelines for anti-corruption and corruption prevention education programmes qualifying for tax-deductible donations

Johor-Singapore SEZ

  • Johor-Singapore SEZ stamp duty remission of 40% for qualifying commercial property acquisitions and related financing arrangements

Stamp duty

  • MIRB clarification regarding stamping and endorsement requirements for exempted instruments under the Stamp Act 1949

Indirect tax

  • Public Ruling No. 3/2026 on determination of foreign currency exchange rates for service tax and sales tax invoices
  • Service Tax Policy No. 4/2026 regarding rental or leasing services provided by multiple service providers
  • Amendments to Service Tax Policy No. 2/2025 concerning rental and leasing service tax exemptions for micro, small, and medium enterprises (MSMEs)
  • Indirect tax legislation updates, including anti-dumping duties on certain steel products and amendments to sales tax legislation affecting specified maritime vessels and floating structures

Individual tax

  • Income Tax (Determination of Chargeable Income of an Individual in Respect of Limited Liability Partnership's Profit) Rules 2026, which introduce a concessionary 2% tax rate on qualifying LLP profit distributions exceeding RM100,000

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