The tax will apply to dividend income received by individual shareholders for dividends paid, credited, or distributed from company profits. It will be imposed on individual shareholders, including residents, non-residents, and individuals holding shares through nominees.

“The threshold is set for annual dividend income exceeding RM100,000,” the ministry said.

Exemptions will be granted to dividend income from foreign sources; dividends distributed from the profits of pioneer-status companies and reinvestment allowance; dividends paid, credited, or distributed from the profits of tax-exempted shipping companies and dividends distributed by cooperatives.

The exemptions will also be applicable to dividends declared by closed-end funds; dividends received by residents from Labuan entities; and any pre-existing exemptions on dividends at the shareholder level.

“The dividend tax does not apply to profit distributions made to contributors and depositors of EPF, the Armed Forces Fund Board (LTAT), Amanah Saham Nasional Bumiputera, or any unit trusts,” the ministry said.