Guides
2% Dividend Tax: Dividends Above RM100,000 (2026 Status)
Updated: 8 November 2026 Independently fact-checked.
Introduction
Under the single-tier dividend system, dividends from Malaysian companies paid to individual shareholders are generally exempt from tax in the hands of the shareholders. However, HASiL's Notes for the BE Form YA 2025 (eBE2026) contain a new item called Dividend Tax — the imposition of tax at a rate of 2% on dividend income exceeding RM100,000 for individual shareholders, under Part XXII of Schedule 1 ACP 1967.
This article explains what is known from the official text of the BE Notes eBE2026 and the current legislative status. Importantly: the statutory effective status has not been verified — Budget 2027 measures (including the 2% Dividend Tax) remain proposals until the Finance Bill 2026 is enacted. Do not treat these figures as final before official confirmation.
What the BE Notes eBE2026 say (HASiL source)
Based on the text in HASiL's Notes for the BE Form YA 2025 (eBE2026):
- The Dividend Tax is imposed on dividend income exceeding RM100,000 for individual shareholders.
- The scope covers resident and non-resident individuals, as well as individuals holding shares through nominees.
- Rate: 2% of the chargeable income relating to dividend income, under Part XXII of Schedule 1 ACP.
Current legislative status: This item still awaits official confirmation from HASiL — check again with HASiL before deciding.
- The Finance Bill 2026 has not yet been listed on the HASiL Parliament page (D.R. 1–27/2026) — Budget 2027 measures remain proposals.
- Although the 2% Dividend Tax text appears in the BE Notes eBE2026, the official effective date and first year of assessment (Amendment Act) have not been verified.
- The detailed definition of "dividend income" (gross or net dividends) and the calculation mechanism for the relevant chargeable income have not been fully extracted from the text of the Act.
- Interaction with dividends from foreign companies / FSI must not be claimed without the text of the Act.
Why this matters to you
- If you receive dividends exceeding RM100,000 a year, the tax treatment of your dividends may change if the Dividend Tax is enforced.
- Verify the latest status with HASiL or a qualified tax adviser before planning.
- The existing single-tier dividend system remains the basis; the 2% Dividend Tax is a new imposition found in the BE Notes eBE2026.
Frequently Asked Questions (FAQ)
Q. Is the 2% Dividend Tax already in force? A. The legislative status is this item still awaits official confirmation from HASiL — check again with HASiL before deciding. Its text appears in the BE Notes eBE2026, but the Finance Bill 2026 has not yet been listed; Budget 2027 measures remain proposals until enacted.
Q. Who is affected? A. According to the BE Notes eBE2026: individual shareholders — resident and non-resident — and individuals holding shares through nominees, for dividend income exceeding RM100,000.
Q. What is the tax rate? A. 2% of the chargeable income relating to dividend income, under Part XXII of Schedule 1 ACP (R1).
Glossary
- Single-tier dividend — a system in which Malaysian-source dividends are exempt from tax in the hands of shareholders.
- ACP — Income Tax Act 1967 (Act 53).
- YA — Year of Assessment.
- FSI — foreign source income.
Official sources
All sources below were reviewed on 8 November 2026. Official HASiL pages and documents: