Guides
Dividends and investments: are dividends taxed?
Updated: 8 November 2026 Independently fact-checked.
Single-tier tax system — dividends are usually tax-free in your hands
Since year of assessment 2008, Malaysia has used the Single-Tier Tax System. Under this system, dividends paid by companies are not taxed in the hands of individual shareholders — tax has already been paid at the company level. (Sumber: pengumuman rasmi sistem satu tingkat; Akta Kewangan 2007 (Akta 682) — lihat R3; nota semakan di bawah.)
Additional 2% dividend tax (YA 2025 onwards)
From Year of Assessment 2025, individual dividend income exceeding RM100,000 per year is subject to an additional 2% tax on the portion exceeding RM100,000. This applies to resident and non-resident individuals. Dividends at or below RM100,000 are not affected by this additional tax. (Sumber: R1, R2, R4.)
The calculation mechanism is set by the Income Tax Order P.U.(A) 148/2025, gazetted on 7 May 2025 (Schedule 1, Part XXII of Act 53), with the formula A/B × C. (Sumber: R1, R2.)
Interest on savings and other investments
Interest from certain savings and investments (e.g. deposits in licensed financial institutions, government bonds) is generally taxed as chargeable income unless specifically exempted by exemption provisions. (Sumber: R3 (s.4), R4.)
Records you need to keep
As a shareholder, keep dividend vouchers and related statements as records. Business records must be kept for 7 years (s.119A of Act 53); dividend vouchers are mentioned in HASiL's Individual FAQ as an example of records. (Sumber: R2, R3.)
Frequently Asked Questions (FAQ)
Q. Are my dividends taxed? A. Dividends paid by companies under the Single-Tier Tax System are not taxed in your hands — tax has already been paid at the company level. However, from YA 2025, dividends exceeding RM100,000 per year are subject to an additional 2% tax on the portion exceeding RM100,000. (Sumber: R1, R2, R4.)
Q. I received dividends of RM120,000 — how much is subject to the additional tax? A. The portion exceeding RM100,000 (i.e. RM20,000 in this example) is subject to the additional 2% tax. Full calculation examples are not listed until the gazette text is confirmed. (Sumber: R1, R2.)
Q. Is the interest on my savings taxed? A. Generally yes — interest is taxed as chargeable income unless specifically exempted. Verify exemptions with HASiL. (Sumber: R3, R4.)
Official sources
All sources below were reviewed on 8 November 2026. Official HASiL pages and documents: