Malaysia’s 2026 budget includes new tax proposals

Instead of introducing new taxes, the Malaysian Government focussed on improving governance and broadening the tax base progressively.

The Ministry of Finance of Malaysia issued the 2026 budget on 10 October 2025, focusing on improving governance and broadening the tax base without introducing new taxes to achieve equitable taxation for high-income earners and foreign entities. Significant tax proposals include: review of tax exemption for foreign-sourced income: extension of tax exemption on foreign-sourced dividend income for Malaysian resident companies and LLPs from 1 January 2027 to 31 December 2030; extension o...

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Authors: Soh Lian Seng

Published Date: 15 October 2025