Do You Pay Tax on Dividends in Malaysia? A Remisier’s Guide

This guide is for retail investors using M+ Online or M+ Global at Malacca Securities. It explains how much of your dividend income you actually keep, and what changed from Year of Assessment 2025. If you are still setting up, start with our guide on how to start investing in Bursa Malaysia first.

How Malaysia’s Single-Tier System Works

Malaysia runs a single-tier dividend system. First, a Malaysian company pays corporate tax on its profits. Then it distributes the dividend. Because the tax was already paid at company level, the shareholder receives it without a second layer of tax.

So for most of the past fifteen years, an investor collecting dividends from Maybank, Tenaga or a REIT simply banked the cash. There was nothing to declare.

Corporate tax rate: 24% for most companies. Qualifying SMEs pay lower tiered rates.

Shareholder tax: Historically nil on Malaysian-sourced dividends, at any amount.

The 2% Dividend Tax From YA2025

From Year of Assessment 2025, this changed for larger portfolios. Individuals receiving more than RM100,000 in Malaysian-sourced dividends now pay 2% tax on the portion above that threshold.

However, the threshold matters more than the rate. This is not a 2% tax on all your dividends once you cross RM100,000. It applies only to the excess.

RM120,000 in dividends: The first RM100,000 is untouched. You pay 2% on RM20,000, so RM400 in total.

RM150,000 in dividends: The excess is RM50,000. Your tax is RM1,000.

RM80,000 in dividends: You are below the threshold. There is no dividend tax at all.

In practice, you need a substantial portfolio before this changes any decision. That said, if you live off dividend income, it now belongs in your planning.

Which Dividends Are Excluded

Several common income sources sit outside this tax entirely.

EPF dividends: Excluded.

ASNB and similar unit trust distributions: Excluded.

Lembaga Tabung Haji: Excluded.

Cooperatives and pioneer status companies: Excluded.

Foreign-sourced dividends: Outside the Malaysian-sourced scope. Separate rules apply on remittance.

This matters more than it first appears. For example, if much of your income comes from ASNB or EPF, your exposure is smaller than your total dividend figure suggests. So separate the two when you tally up your year.

The 30% US Withholding Tax Most Investors Miss

Here is where I see the most surprise among clients who have started trading US stocks through M+ Global.

The United States withholds tax on dividends paid to non-US persons. Malaysia has no tax treaty with the US that lowers this rate. As a result, Malaysian investors face the full 30%. It is deducted at source, so the money never reaches your account.

What this means in practice: A US stock advertising a 4% dividend yield delivers roughly 2.8% to a Malaysian holder.

Capital gains are different: Malaysia does not tax capital gains on listed shares for individuals. The US does not withhold on capital gains for non-resident aliens either.

So if you buy US stocks mainly for income, build the 30% into your model from day one. If you buy them for growth, it matters far less.

What Records to Keep

Good housekeeping makes the year-end exercise straightforward.

Annual dividend statements: Split into Malaysian-sourced and foreign-sourced.

EPF, ASNB and unit trust distributions: Keep these apart from your directly held counters.

US dividend statements: These should show the gross dividend and the amount withheld.

Your CDS statement: This is the definitive record of what you held and when. Our guide on reading your M+ client statement walks through how to read it line by line.

Also worth knowing: how your shares are held affects how dividends reach you. If you are unsure, see direct CDS versus nominee accounts.

Key Takeaways

• Malaysian dividends stay tax-free for the vast majority of retail investors.
• From YA2025, individuals above RM100,000 pay 2% on the excess only, not the whole amount.
• EPF, ASNB, Tabung Haji, cooperatives and pioneer status companies fall outside the scope.
• US dividends face 30% withholding at source. There is no treaty relief for Malaysians.
• A 4% US dividend yield is closer to 2.8% after withholding.
• Keep Malaysian and foreign dividend records separate through the year.

Most investors never need to think about the RM100,000 threshold. However, almost everyone buying US stocks is quietly losing 30% of their dividend income without realising it. If you want to review how much you are actually keeping, or need help pulling a consolidated statement, reach out to me. I’m Dexter Chia, remisier at Malacca Securities Sdn Bhd. You can reach me on WhatsApp at +60169059789 or use my M+ Global invitation code UBZQ.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.

Want to invest in Bursa Malaysia or US markets? Contact Dexter Chia, an AI Driven Remisier who has 2,200+ clients at Malacca Securities Sdn Bhd (M+ Online / M+ Global). M+ Global Invitation Code: UBZQ | WhatsApp: +60169059789 | Why Choose Dexter?