Tax treatment

Tax Incentives
Tax Incentives
Notes
Tax exemption 
of Islamic banks 
and takaful 
c o m p a n i e s 
transacted in 
international 
currencies
• 
Tax exemption of 100% from Year of Assessment (YA) 2007 to YA 2016 
for Islamic banks and Islamic banking units licensed under the Islamic 
Banking Act 1983 on income derived from Islamic banking business 
conducted in international currencies, including transactions with 
Malaysian residents; and
• 
Tax exemption of 100% from YA 2007 to YA 2016 for takaful companies 
and takaful units licensed under the Takaful Act 1984 on income derived 
from takaful business conducted in international currencies including 
transactions with Malaysian residents.
Exemption from 
withholding tax
Interest income (other than such interest accruing to a place of business in 
Malaysia) received by non-residents from financial institutions established 
under the Islamic Banking Act 1983, or any other financial institutions approved 
by the Minister of Finance are exempted from tax. 
Profits paid in respect of Islamic securities/ debentures issued in Ringgit 
Malaysia, other than convertible loan stock which are approved by the 
Securities Commission (SC) to 
non-residents
are exempted from witholding 
tax. This includes non-Ringgit instruments approved by SC or Labuan Financial 
Services Authority (Labuan FSA). Similarly, any profits paid on non-Ringgit 
Islamic securities to 
residents
are also exempted if approved by SC or Labuan 
FSA.
Exemption of 
Real Property 
Gains Tax 
(RPGT)
Chargeable gains accrued on the disposal of any chargeable assets in 
relation to the issuance of private debt securities under Islamic principles are 
exempted from RPGT.
This also applies to the disposal of any chargeable assets in relation to the 
Sukuk Bank Negara Malaysia (BNM) - Ijarah which are issued or to be issued 
by BNM Sukuk Berhad.

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