Global Minimum Tax: What Does It Mean for You?

What is a "minimum tax" in Malaysia?

From time to time, news about a "minimum tax" appears in Malaysia. At this review, the term "alternative minimum tax" (AMT) was not found in official HASiL or MOF documents — there is no domestic AMT for individuals or ordinary companies this item still awaits official confirmation from HASiL — check again with HASiL before deciding. until an official source is published.

What does exist in Malaysia is the Global Minimum Tax (GMT) — a minimum corporate tax rate under the internationally agreed Pillar Two (GloBE), which aims to ensure large multinational enterprise groups pay tax of at least 15%.

How is GMT implemented?

In Malaysia, GMT is implemented through two mechanisms:

• Domestic Top-up Tax (DTT) — a domestic top-up tax that ensures entities in Malaysia within large MNE groups are subject to a minimum effective tax rate of 15%.
• Multinational Top-up Tax (MTT) — a multinational top-up tax for the same groups.

GMT legislation is contained in Part XI of the Income Tax Act 1967, introduced via the Finance (No. 2) Act 2023 ([R1] §1.3).

Who is affected?

GMT is limited to large MNE groups: those operating in at least two jurisdictions with consolidated annual revenue of at least €750 million in two of the four preceding financial years ([R3]).

Practical impact:

• SMEs and small businesses: out of scope — GMT generally does not apply.
• Individuals: not affected at all — GMT is a corporate tax.
• Top-up formula: 15% − effective tax rate (ETR) of the jurisdiction ([R2] §8.4).

When does it take effect?

DTT and MTT apply to financial years beginning on or after 1 January 2025 and subsequent years ([R1] §1.4).

Reporting

Affected groups must file the GloBE Information Return (GIR) with HASiL no later than 15 months after the end of the reporting year; for the first transitional year, relief up to 18 months. A top-up tax return is filed by each constituent entity in Malaysia ([R1] §6.2, §6.7–6.8).

What does it mean for you?

• If you are a small business/SME owner: GMT does not apply to you.
• If you are an individual: the "minimum tax" news does not change your individual income tax.
• If you are an accountant: verify the MNE group scope before recommending action.

Summary

1. No domestic AMT was found in official sources at this review — do not assert its existence without an official source.
2. GMT (Pillar Two) applies only to large MNEs (≥ €750 million revenue) — minimum effective rate 15%, DTT & MTT, effective FY 2025.
3. SMEs/individuals are out of scope; do not hype it as a new tax for everyone.