The guidelines outline the CGT treatment for gains from disposing of unlisted shares and relevant company shares.

Malaysia’s Inland Revenue Board (IRB) has published the updated guidelines on capital gains tax for unlisted shares on 21 July 2025, which replaced the previous guidelines of 1 March 2024.

These guidelines explain the treatment of CGT on gains or profits from the disposal of a domestic capital asset, which refers to unlisted shares and shares of a relevant company (capital asset).

The new guidance primarily reflects legislative changes to section 15C of the Income Tax Act 1967 (ITA). These changes, introduced via the Finance Act 2024, take effect from 1 January 2025, among other updates.

Under section 15C of the ITA, Gains or profits from the disposal of shares in a controlled company incorporated outside Malaysia (relevant company) shall be deemed to be derived from Malaysia and subject to CGT if the relevant company owns real property situated in Malaysia or shares in another controlled company or both. The imposition of CGT in accordance with section 15C of the ITA also applies to the disposal of RPC shares, effective from 1 January 2024. Any RPC shareholding before 1 January 2024 will be subject to CGT under the ITA for a company, limited liability partnership, trust body, and co-operative society.

The key changes in the updated guidelines are:

  • Paragraph 3.2: The definition of “capital asset” now includes specific movable property in Malaysia, such as a share of a company incorporated in Malaysia not listed on the stock exchange (including any rights or interests thereof) owned by a company, limited liability partnership, trust body, or co-operative society.
  • Paragraph 10.3: Example 9 is introduced to explain the treatment of unabsorbed losses from unlisted share disposals. Additionally, the 10-year assessment period starts immediately after the year the adjusted losses occur. Any remaining unabsorbed losses after this period will no longer be considered.
  • Paragraph 12.3(b): A definition of “another controlled company” is added, aligning with section 15C(5) of the ITA.
  • Paragraph 12.4(c): New example 11 clarifies “subsequent acquisition” by a controlled company when the shareholding was not in a relevant company.
  • Paragraph 13: Clarification on determining the date and price for acquiring a real property company (RPC) shares before 1 January 2024.