The Bill proposes amendments to multiple statutes—including the Income Tax Act 1967 (ITA), the Real Property Gains Tax Act 1976 (RPGT Act), the Stamp Act 1949, the Labuan Business Activity Tax Act 1990 (LBATA), and the Petroleum (Income Tax) Act 1967. 

Malaysia’s Ministry of Finance has presented the Finance Bill 2025 and Measures for the Collection, Administration and Enforcement of Tax Bill 2025 for the first reading in parliament on 18 November 2025.

The Bill proposes amendments to multiple statutes, including the Income Tax Act 1967 (ITA), the Real Property Gains Tax Act 1976 (RPGT Act), the Stamp Act 1949, the Labuan Business Activity Tax Act 1990 (LBATA), and the Petroleum (Income Tax) Act 1967.

The amendments, including updates to stamp duty and new capital gains tax rules, aim to enhance transparency, fairness, and compliance in Malaysia’s tax system. Businesses may be affected in areas such as cash flow, operations, and investment planning, while individuals will need to adjust to changes, such as updated tax reliefs.

Income Tax Act 1967 (ITA) – Imposition Of Income Tax On Individual Partners Receiving Profit Distribution From a Limited Liability Partnership (LLP) 

Starting in Year of Assessment (YA) 2026, partners of LLPs will be subject to a 2% tax on Malaysian-sourced profits exceeding MYR 100,000. Payments will begin in the first month of the basis period from YA 2028, with YA 2027 serving as a transition year.

Restriction On Carry Forward Of Losses For Real Property Gains Tax (RPGT Act)

Effective 1 January 2026, Section 7 of the Real Property Gains Tax Act (RPGTA) will be amended to limit the carry-forward of any unutilised allowable losses from the disposal of an asset to a maximum of ten consecutive Years of Assessment (YAs). Any losses not utilised within these 10 years will be disregarded.

Additionally, the definition of “disposal” under Section 65C of the Malaysian Income Tax Act (MITA) will be broadened to include scenarios such as the extinguishment of rights resulting from a company’s dissolution or winding up, as well as other forms of share restructuring, including redemption and conversion of shares, or the termination of asset ownership. These changes aim to clarify the scope of taxable disposals and standardise the treatment of losses.

The Stamp Act 1949

The authorities have issued strict penalties for stamp duty violations, ranging from MYR 500 to RM50,000 depending on the offence. Failure to register instruments of transfer of debentures or shares executed abroad, or to sign documents that are not duly stamped, can result in fines of between MYR 1,000 and MYR 10,000.

Those who fail to disclose all relevant facts in an instrument to evade duty face significantly higher penalties, from MYR 2,500 up to MYR 50,000.

Additionally, failing to pay remitted compound duty on time can attract a fine of MYR 500 or 20% of the amount payable, whichever is higher, while offences involving stamp certificates, including selling or falsifying them, carry fines ranging from MYR 2,500 to MYR 50,000.

Labuan Business Activity Tax Act 1990 (LBATA)

A new Section 18A of the LBATA will allow the Director General to authorise any officer, in writing, to exercise the Director General’s powers on his behalf. Additionally, Labuan entities may electronically authorise a tax agent, or an employee who is an approved tax agent under Section 153 of the MITA, to file forms on their behalf.