On 4 March 2024, Malaysia issued the Income Tax (Exemption) (No. 3) Order 2024, which was published in the Official Gazette. This order grants a capital gains tax exemption to companies, limited liability partnerships, trust bodies, and cooperative societies resident in Malaysia on their realized capital gains from the sale of capital assets located outside Malaysia. To qualify for the exemption, the recipient must satisfy specific criteria, such as meeting economic substance requirements by maintaining an adequate workforce and investing sufficiently in operations in Malaysia. This exemption does not extend to gains generated from the disposal of intellectual property rights. Additionally, this exemption is not applicable to individuals engaged in banking, insurance, air or sea transportation. The capital gains tax exemption will be effective from 1 January 2024 until 31 December 2026.
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